Importers Say Thai Trailer Wheels Not of Chinese Origin, Not Subject to China AD/CVD
Thai trailer wheel exporters and importers sought relief Nov. 20 from a Commerce Department final scope ruling that their products, whose components were made from Chinese-sourced materials, were subject to antidumping and countervailing duties on Chinese trailer wheels (Asia Wheel v. U.S., CIT Consol. # 23-00096).
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Thailand-based Asia Wheel, along with U.S. importers Trailstar L.L.C., Lionshead Specialty Tire and Wheel L.L.C., and Textrail, Inc., submitted a motion for judgment at the Court of International Trade to reverse the ruling, which Commerce announced in April.
Under the scope of the order on trailer wheels from China, trailer wheels are considered to have two components: rims, or a wheel’s outside edge, and discs, their internal structure. In the past, Commerce has applied AD/CVD to trailer wheels whose rims and disc both came from China, even if the wheels were then assembled in another country, the companies said. It hasn't, however, applied the duty to trailer wheels with only one Chinese-origin component out of two.
Asia Wheel and the importers bringing suit said they sometimes import discs from China, but mostly manufacture rims and discs in Thailand using steel plates sourced from China.
Commerce ruled most of their products would be subject to the AD/CVD orders on Chinese trailer wheels. It said the Chinese-origin components were not “substantially transformed” in Thailand enough that Thailand, not China, could be considered the wheels’ country of origin. Only wheels made under a particular manufacturing method, which sometimes sourced rims’ steel plates from other countries, were exempt, it said.
The importers argue Commerce is backtracking on its former rulings that both trailer wheel components must be Chinese-origin for a wheel to be subject to AD/CVD. The original duty’s language doesn't apply to rims and discs assembled in other countries using Chinese-sourced materials, they said in the motion.
Commerce also conducted its “substantial transformation” analysis incorrectly, they said. The U.S. Court of Appeals for the Federal Circuit has ruled substantial transformation occurs when a product “loses its identity and is transformed into a new product having a new name, character and use,” they said. However, the processing of Chinese materials in Thailand resulted in component parts with a “new name, character, and use,” they said, so that the materials were substantially transformed enough to be considered of Thai origin.