Freight Rail Coupler Importer Shouldn’t Be Excluded From Domestic Industry, ITC Finds
Amsted Rail shouldn’t be excluded from the domestic industry, and the U.S. industry is “materially injured” by freight rail couplers imported from China that are sold in the United States at less than fair value and “are subsidized by the government of China,” Commissioner Jason Kearns said in his views on remand filed with the Court of International Trade on Feb. 11 (Wabtec Corp. v. United States, CIT # 23-00157).
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The ITC initially determined that Chinese freight rail couplers weren’t injuring the domestic industry, but, after new petitions were filed, the commission determined that the imports were causing injury (see 2510080039).
In October, CIT Judge Gary Katzmann remanded the commission’s decision to include Amsted Rail in the injury investigation but rejected the rest of the importers’ claims, including claims that the second case was a relitigation, that ITC couldn’t cumulate imports from China and Mexico, and that the commission lacked the authority to refuse to initiate an investigation (see 2510200045).
Kearns said “because Amsted’s subject imports from Mexico substantially harmed its domestic [freight rail coupler] workers and [freight rail coupler] operations in Granite City, its exclusion would inappropriately mask injury to the domestic industry,” according to his views on remand. Furthermore, the commissioner said “jobs were lost at Amsted’s Granite City facility as Amsted’s imports from Mexico gained market share at the expense of its domestic [freight rail couplers] operation” between 2020 and 2021.
The commissioner analyzed the decision on remand using five factors: “the percentage of domestic production attributable to the importing producer”; “the ratio of import shipments to U.S. production for the importing producer”; “the reason the U.S. producer has decided to import the product subject to investigation”; “whether inclusion or exclusion of the importing producer will skew the data for the rest of the industry”; and “whether the primary interest of the importing producer lies in domestic production or importation.”
Additionally, Kearns said the “survivor bias scenario” is relevant to his remand views and refers to a scenario in which “the multinational as a whole is benefiting from subject imports,” but “the domestic arm of the operation is of course far worse off, as it has shuttered its production and laid off its employees.” In that scenario, the commissioner said, “exclusion would mask injury.”
First, regarding the percentage of domestic production attributable to the importing producer, Kearns found “Amsted’s percentage of domestic production is large enough that its inclusion or exclusion would be consequential.” Second, regarding the ratio of subject imports to domestic production, the commissioner found that “further analysis of whether its domestic operations benefited from the imports, or are somehow shielded from them, is warranted.”
Third, regarding whether the domestic producer benefited from imports, the commissioner found that Amsted’s domestic operations lost market share to the company’s freight rail coupler imports from Mexico, lost jobs and experienced declining operating margins, declining production and capacity utilization, and declining U.S. assets. Additionally, according to the views on remand, “Amsted has admitted that it uses its Mexican operations to ‘lower costs’ compared to its Granite City operation” and “the Commission did not adequately account for Amsted’s self-serving statements to the contrary.”
Fourth, regarding skewing industry data, the commissioner found that “excluding Amsted from the domestic industry would actually result in the masking of injury.” Fifth, regarding primary interest, Kearns found “Amsted in recent years decided the best way to compete against cheap imports from China was to import even cheaper imports from Mexico itself,” citing United Steelworkers testimony.
“I find that appropriate circumstances do not exist to exclude Amsted from the domestic industry in these investigations,” Kearns concluded.