Commerce issues preliminary trailer duty determinations, ends Canada subsidy case

Earlier this year, the US International Trade Commission determined there was a reasonable indication that the domestic industry was materially injured or threatened with material injury by subject imports from Canada, Mexico and Canada, allowing the Commerce Department’s investigations to proceed.

Commerce issued preliminary countervailing duty determinations involving China and Mexico on June 5, and a preliminary antidumping determination involving China, requiring importers of subject merchandise to post cash deposits based on the preliminary rates.

Aside from certain steel- or iron-intensive subassemblies, the investigations covered finished and unfinished van-type trailers as well as specified trailer components. Commerce identified Harmonized Tariff Schedule (HTS) subheadings 8716.39.0040 and 8716.90.5060 as the classifications under which covered merchandise is typically entered, although the agency stated the written scope description controls coverage rather than tariff classification alone.

China’s subsidy and dumping determinations

Commerce issued an affirmative preliminary countervailing duty determination involved China on July 3.

The agency calculated preliminary subsidy rates of 82.37% for CIMC Vehicles Group Co. Ltd. and companies not individually examined. The agency assigned a rate of 128.78% to certain non-cooperative respondents based on adverse facts available.

Commerce subsequently issued an affirmative preliminary antidumping determination involving Chinese van-type trailers and subassemblies. The agency found a dumping margin of 130.86% for the China-wide entity. After accounting for export subsidy offsets, Commerce established a preliminary cash deposit rate of 130.76%.

Commerce stated Chinese-origin trailers and subassemblies remain subject to the investigation even when certain processing operations occur in a third country. The agency also indicated Chinese-origin merchandise shipped through Canada may remain subject to the Chinese investigations under specified circumstances.

Mexico’s subsidy determination

Commerce also issued an affirmative preliminary countervailing determination involving Mexico.

The agency calculated preliminary subsidy rates of 1.90% for Hyundai de Mexico S.A. de C.V. and 1.95% for Utility Trailer Manufacturing de Mexico S.A.P.I. de C.V.

Commerce assigned a rate of 1.91% to other producers and exporters not individually examined.

Several non-cooperative respondents received a countervailing duty rate of 62.67% based on adverse facts available.

The Mexican antidumping investigation remains ongoing. Commerce is expected to issue its preliminary antidumping determination later this summer.

Canada subsidy investigation terminated

Commerce terminated the Canadian countervailing duty investigation after the petitioners withdrew the subsidy allegations. The agency did not issue a preliminary subsidy rate for Canadian producers.

Although the Canadian subsidy investigation has ended, Commerce stated Chinese-origin trailers and subassemblies shipped through Canada may still be subject to duties arising from the Chinese investigations if they fall within the scope of those investigations.

Trade flows demonstrate Mexico and China’s separate roles

Trade data covering the 8716.39.0040 and 8716.90.5060, which Commerce identified as typical classifications for covered merchandise, indicate Mexico and China occupy different positions within the US trailer import market.

Imports under HTS subheading 8716.39.0040, van-type trailers and semi-trailers for the transport of goods, originated predominately from Mexico during the five-year period ending with the most recent Census Bureau trade data available (April). Mexican shipments accounted for more than 98% of imports entered under the classification during that period, according to Census data compiled by Global Trade Tracker.

Tangentially, imports under HTS subheading 8716.90.5060, parts for trailers, semi-trailers or other vehicles not mechanically propelled, were more diversified. China accounted for around 48% of imports under the classification over the same period, followed by Mexico at roughly 20% and Canada at about 16%.

Trade flows indicate Mexico has served as a significant source of finished trailer imports while China has maintained a larger presence in certain trailer parts and subassembly categories covered by the investigations.

Scope of investigations

The investigations cover finished and unfinished van-type trailers used in the transportations of goods as well as several categories of subassemblies.

Covered merchandise includes trailers subframes, nose wall assemblies, side wall assemblies, roof assemblies, rear impact guard assemblies, coupler assemblies, running gear assemblies, axle assemblies, and landing gear assemblies.

The scope also covers certain components imported with trailers or subassemblies, including brake assemblies, suspensions, wheel-end components, lighting systems, refrigeration units and related equipment when entered as part of unfinished or unassembled van-type trailers and covered subassemblies.

Commerce stated assembly, finishing or other processing operations conducted either in the country of manufacture or in a third country do not automatically remove merchandise from the scope of investigations.

Final determinations pending

The preliminary determinations do not conclude the proceedings.

Commerce has issued preliminary countervailing duty determinations involving China and Mexico and a preliminary antidumping duty determination involving China, while removing the countervailing duty investigation on Canada.

Although Commerce terminated the Canadian countervailing duty investigation, the separate antidumping duty investigation involving Canada remains ongoing. The antidumping duty investigation involving Mexico also remains ongoing.

After completing those proceedings, the agency will issue final antidumping and countervailing duty determinations, which may differ from the preliminary margins announced to date.

When Commerce completes its final determinations, the US International Trade Commission will issue final injury determinations addressing whether the domestic industry is materially injured or threatened with material injury by the subject imports.

If both agencies reach affirmative final determinations, Commerce will publish antidumping and countervailing duty orders and continue collecting duties on covered imports.

If either agency reached a negative final determination for a particular country or proceeding, that portion of the investigation will terminate and any associated cash deposits would generally be refunded.