CBP Finds Importer Evaded Steel Wheel Duties

Vanguard National Trailer Corporation imported steel wheels from China covered by antidumping and countervailing duty orders through evasion, according to the results of a recently released Enforce and Protect Act (EAPA) investigation. CBP said that Vanguard had entered steel wheels "using false statements that they didn't contain covered merchandise," despite the company's protests that it believed the wheels were out of scope.

Vanguard attempted to argue that it didn't intend to misrepresent its entries, but CBP found that under the EAPA, intent by an importer isn't required for an evasion finding. Vanguard's incorrect typing of the wheels as 01 instead of 03 AD/CVD was a "materially false statement" as required by the statute.

The case followed a 2020 allegation by Accuride and Maxion Wheels. CBP investigated and found that there was reasonable suspicion that Vanguard imported steel wheels into the U.S. that had been transshipped from China through Asia Wheel in Thailand, specifically citing trade data that showed a shift in shipping patterns of steel wheels to U.S. customers from Jingu, Asia Wheel’s affiliate in China, to Asia Wheel at the time of the AD/CVD investigations. The agency then imposed interim measures.

CBP then sent information requests to both Vanguard and Asia Wheel. In both companies' responses, they asserted that the steel wheels at issue weren't covered by the scope of the orders because Asia Wheel manufactured the steel wheels in Thailand using rims that didn't originate in China combined with Chinese-origin discs. Both companies argued that in-scope wheels required the combination of Chinese-origin rims and discs processed in a third country.

In 2021, CBP made a covered merchandise referral to Commerce. The agency already was considering a scope ruling request from Asia Wheel, and it combined the inquiries. In June 2023, Commerce finally concluded that referral as well as Asia Wheel's earlier scope request, finding that the wheels manufactured in Thailand using discs and rims produced in Thailand from steel plates from China or a third country weren't subject to the orders but that wheels made using both discs from China and rims made in Thailand were within the scope of the orders along with dual wheels made with both discs produced in Thailand from Chinese disc blanks and rims from China.

CBP noted that Vanguard told the agency that Vanguard previously had worked with Jingu for over 10 years prior to the AD/CVD investigations and that it was Jingu that suggested Vanguard use Asia Wheel as an alternative source for steel wheels.

Vanguard made additional arguments that Asia Wheel had the production capacity to produce the wheels in question. Although CBP contested that argument, it ultimately found it to be irrelevant because Commerce's scope analysis found that processing performed in Thailand didn't change the country of origin of the products and the steel wheels remained Chinese-origin and subject to the orders, CBP said.

Neither party responded to our requests for comment.