Commerce Wrongly Removed Separate Rate Status of Four Tire Exporters, Plaintiffs Say

The Commerce Department unfairly assumed four Chinese tire exporters were under government control because they couldn't participate as separate rate respondents in a 6-year-old administrative review, importers and exporters said Feb. 2 in comments on the department’s remand determination in an antidumping duty review of passenger vehicle and light truck tires from China (YC Rubber Co. (North America) v. U.S., CIT # 19-00069).

Their case was brought in 2019 to challenge the initial 64.57% separate rate Commerce calculated for the review’s sole individual respondent, Junhong, and applied to all the other separate rate respondents. The case was remanded after the U.S. Court of Appeals for the Federal Circuit reversed Commerce’s decision to seek only one respondent, saying that the “reasonable number” of reviewed respondents required by statute is “generally more than one.”

On remand, Commerce sought another individual respondent for review, reaching out to four of the separate rate respondents from the underlying review, which was completed in 2019: Wanda Boto, Hengyu, Mayrun and Winrun. All said they wouldn't participate. Commerce then selected Kenda. In its remand results, Commerce assumed government control of the four companies that declined to participate and applied to them the China-wide rate of 87.99%, while Kenda received an 18.15% AD rate.

In comments on the remand, importers and exporters argued that the four potential respondents hadn't been able to comply with Commerce’s requests because the period of investigation for the review, 2016-2017, was so many years ago that their records were long gone.

“The agency has the gall to blame separate rate respondents for not rapidly being able to produce detailed business records dating back to 2016,” ITG Voma said. “This problem -- the unavailability of years-old data and since-departed company personnel -- was one of Commerce’s own creation.”

For example, Commerce gave Boto only a single week to decide if it could participate, and granted it just a single-day extension, importers led by YC Rubber said. Boto had not been a party to the litigation and “lacked key information,” they said.

Hengyu, meanwhile, had been in the middle of bankruptcy when contacted by Commerce, and Mayrun and Winrun by policy each didn't keep records for more than three years, they said.

The importers and exporters argued Commerce was not judicially required by the remand to select another respondent. Commerce should have instead assigned a “pull-forward” AD rate, “a practice the agency has undertaken in similar circumstances,” they said.

“Belated selection” by Commerce has been rejected by CIT in the past, importers said. They cited the 2015 case Changzhou Hawd Flooring Co. v. U.S., in which the department, on remand, selected a new respondent only three-and-a-half years after an initial investigation and was overruled by the court because review “at such a late date is arbitrary and capricious,” they said.

They also said they shouldn't be subject to the “aberrational” 64.57% AD rate assigned to the review’s initial reviewed respondent, Junhong. The rate assigned to separate rate respondents in the previous review was only 2.96%, and was reduced to 1.45% on appeal, they said. They argued Commerce should have carried forward the 1.45% separate rate “based on its ‘usual practice.’”

Mayrun, a consolidated plaintiff, also contested Commerce’s refusal to consider its request to withdraw from the review after the remand, citing the “extraordinary circumstances” of the lengthy proceeding.

This was the exporter’s second request; the first one, submitted in the early stages of the review, had been tardy.

“Commerce’s Remand Redetermination says the agency considered it inappropriate to rule on tardy withdrawal requests made during the initial review, but said nothing about Mayrun’s second withdrawal request, submitted on remand,” it said.