Thai Steel Wheels Made With Chinese Parts Fall Within AD/CVD Orders, Commerce Preliminarily Finds
The Department of Commerce preliminarily determined that certain types of truck wheels that Asia Wheel manufactures in its facilities in Thailand and exports to the U.S. are subject to the antidumping and countervailing duty orders on certain steel wheels 22.5 to 24.5 inches in diameter from China, according to a Dec. 13 preliminary scope ruling.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Commerce considered the issue after a covered merchandise referral from CBP in an Enforce and Protect Act investigation concerning steel wheels imported from Thailand by Vanguard National Trailer Corporation. The agency had already begun a scope inquiry at the request of Asia Wheel for the same merchandise, so Commerce decided to address CBP's covered merchandise referral and Asia Wheel’s scope ruling request together.
At issue are truck wheels that Asia Wheel processes in Thailand using discs from China and rims produced in Thailand from rectangular steel plates sourced from China or a third country. Asia Wheel said that because the steel truck wheels differ in design based on customer-specific requirements, it could not provide specifications. However, Commerce noted that Asia Wheel's product list shows that its truck wheels all possess diameters in the range of 22.5 to 24.5 inches and therefore would be covered by the scope of the orders if manufactured in China.
Asia Wheel argued that in the final determinations, "Commerce effectively determined that steel wheels made in a third country from rims or discs from China, but not both, are outside the scope of the truck wheels orders," and that "Commerce did not intend to include steel wheels in the scope when either the rim or the disc were manufactured in China." Therefore, Asia Wheel argued, a substantial transformation analysis is unnecessary and even if performed, a transformation analysis would find that "most steps in the assembly are performed in the third country."
The petitioners Accurite Corporation and Maxion Wheel Akron argued that the plain language of the scope covers Chinese-origin steel wheel parts and that the "disc and rim" language in the scope is not exclusive. as Asia Wheel asserted. Commerce disagreed with Asia Wheel that wheels made in a third country from rims or discs from China, but not both, are outside the scope of the orders, noting that the scope language includes “rims and discs that have been further processed in a third country." A plain reading of the scope language shows that rims, discs and wheels further processed in a third country are covered by the scope if that processing would not exclude these items had it occurred in China, Commerce said.
During the underlying investigation, Commerce declined to perform a substantial transformation analysis, finding it unnecessary at the time. It said that declining to perform such an analysis during the underlying investigation did not prevent it from doing so during the scope ruling. Commerce found that Asia Wheel's price calculations that supported its transformation argument were unreliable, as they were based on statements from its own Chinese parent company. Therefore, Commerce found that the wheels described in the company's responses were not substantially transformed in Thailand such that processing confers country of origin and fell within the scope of the orders.