CIT Remands Commerce's Determination of Government Control in AD Case on Off-The-Road Tires

The Court of International Trade remanded an antidumping case on off-the-road tires from China for a second time, ruling that the Commerce Department failed to provide substantial evidence in determining that two respondents were under de facto government control and not warranting of an individual AD rate. Commerce had determined the Chinese government controlled export functions for Aeolus Tyre and Guizho Tyre Co. (GTC). Judge Timothy Stanceu disagreed in a May 14 opinion. The first remand was in 2019.

Aeolus and GTC, along with other Chinese exporters subject to the AD review, had challenged the final results of the seventh administrative review. In that review, Commerce determined that Aeolus and GTC were under de facto government control and the Chinese government had set their export prices, assigning them to the China-wide entity. The agency typically weighs four factors in reaching such a conclusion: (1) whether the government set the export prices, (2) whether the respondent has the authority to negotiate contracts, (3) whether the respondent has autonomy in making decisions on management and (4) whether the respondent retains proceeds of its export sales and makes independent decisions in the profits from those sales.

Stanceu said, “the court cannot agree that Commerce examined the four criteria.” Instead, the agency made the decision of de facto government control without evidentiary support, determining that a “lack of autonomy in the selection of management was the factual equivalent of finding that the Chinese government controlled what commerce termed a company's 'export activities.'” Stanceu found that Commerce did not include any specific discussion of government control over the setting of prices of off-the-road tires for export.

In making their case, GTC and Aeolus cited a recent CIT decision from Judge Richard Eaton that also remanded an antidumping case for its lack of evidence of government control (see 2105030068). Eaton found there was little discussion of how “majority equity ownership” translates into control of export functions and instructed the agency to explain its use of the phrase “export functions” and whether they are synonymous with “export activities” or “company's operations.”

(Guizhou Tyre Co., Ltd. et al. v. United States, Slip Op. 21-60, CIT Consol. # 17-00100, dated 05/14/21, Judge Stanceu. Attorneys: Ned Marshak of Grunfeld Desiderio for plaintiff Guizhou Tyre Co., Ltd.; John Todor, Department of Justice, for defendant U.S. government)