Trade Court Says Commerce Properly Included Tires in AD Scope Despite History of Scope

Cheng Shin requested the exclusion for the light-truck spare tire models it made for a U.S. customer during the antidumping duty investigation on passenger vehicle and light truck tires from Taiwan. The petitioner agreed the spare tires should be excluded and negotiated with Cheng Shin to come up with exclusion language, which said that the tires need to be designed and marketed exclusively as temporary-use light truck tires.

But Commerce's questionnaires asked for the Tire and Rim Association tire classification, and per the TRA's scheme, which includes no category for light truck spares, Cheng Shin's tires were considered passenger car tires. The exporter had requested that Commerce add a fourth category for light truck spares as an option, but Commerce denied the request, finding the only difference between tires categorized in the proposed category for "light truck full size spare" and passenger car tires was tread depth.

As Cheng Shin listed its tires under the TRA classification for passenger vehicle tires, Commerce found the exporter didn't qualify for its own exclusion. The exporter took to CIT, where it argued that the scope language was drafted specifically to exclude the light-truck spare tire models made by Cheng Shin (see 2109090056).

Ruling in favor of the government, Vaden cited Vladimir Lenin to say that the exporter sold Commerce the rope which the agency hung it with. The negotiated scope exclusion language said that the tires must be "designed and marketed exclusively" as temporary-use light truck tires, but Cheng Shin "twice affirmed to Commerce that its tires met the standards of passenger tires, including during the verification process," he said.

Cheng Shin claimed that its selection of the passenger car service type in its submissions to Commerce was not meant to show that its tires were designed and marketed as passenger tires. But the government noted that the exporter's tires qualify as passenger tires under not only the TRA scheme, but also under European Tyre and Rim Technical Organisation standards, meaning they had a potential dual-use as passenger and temporary-use light truck tires.

Cheng Shin claimed that Commerce illegally modified the scope of the order since the petitioner agreed that the respondent's tires met the exclusion's requirements and since the exclusion was specifically drawn up to exclude the exporter's tires. Cheng Shin cited Fedmet Resources v. U.S. in its argument -- a case in which Commerce said that certain magnesia alumina carbon bricks were within the scope of an AD order even though the petitioner disclaimed that view in the initial investigation (see 2201060035).

Vaden distinguished that case from Cheng Shin's because the passenger vehicle and light truck tire investigation negotiated "multiple, specific requirements for the exclusion" and "never agreed to exclude Cheng Shin's specific tires; only those tires that could meet each of the negotiated criteria would be excluded." In Fedmet, on the other hand, the petitioner said it was excluding all magnesia alumina carbon bricks in general.

The exporter negotiated an exclusion with specific terms, then proceeded to tell Commerce how its tires violated those terms, the judge said. "Having given Commerce and the Union the rope with which to hang it, Cheng Shin may not now complain about the sentence."

(Cheng Shin Rubber Ind. Co. v. United States, Slip Op. 23-16, CIT # 21-00398, dated 02/13/23, Judge Stephen Vaden. Attorneys: Amrietha Nellan of Winton & Chapman for plaintiff Cheng Shin Rubber Ind. Co.; Elizabeth Speck for defendant U.S. government; Elizabeth Drake of Schagrin Associates for defendant-intervenor United Steel, Paper and Forestry, Rubber, Manufacuring, Energy, Allied Industrial and Service Workers International Union, AFL-CIO)