US Defends China-Wide Rate for Exporters Who Couldn’t Participate in 5-Year-Old Review

In choosing a second mandatory respondent for a nearly 5-year-old Chinese passenger vehicle and light truck tires antidumping review and removing separate status from four other exporters that refused to participate, the Commerce Department fully complied with a 2023 Court of International Trade remand order (see 2302020032), the government said April 2 (YC Rubber Co. (North America) v. U.S., CIT # 19-00069).

It wasn't unreasonable for Commerce to expect “selected companies to maintain their records beyond their jurisdictional requirements,” it said, nor was the department’s adverse inference of government control for those companies that “could not provide the requested data or participate" as a mandatory respondent unlawful.

CIT remanded the department’s final results -- issued in April 2019 -- after the U.S.Court of Appeals for the Federal Circuit held that Commerce had been wrong to rely on only one respondent to reach a 64.57% rate for a 2016-2017 review requested by multiple separate rate exporters. On appeal by the exporters and associated importers, CAFC found that statute requires Commerce to calculate its rate using a reasonable number of respondents, which is “generally more than one.”

While seeking a second respondent after the remand, Commerce was rebuffed by companies Wanda Boto, Hengyu, Mayrun and Winrun, all of which said that they no longer had their records from the period of review (see 2402060054). The department determined that the four exporters were under Chinese government control and assigned them the China-wide AD rate of 87.99%. The fifth exporter it approached, Kenda, could participate and earned an 18.15% AD rate.

The plaintiffs cited several cases, including Hubbell Power Sys. v. U.S., that they said showed Commerce can’t deny separate rates to respondents who aren’t able to be mandatory respondents in a review if they have submitted valid separate rate certifications.

But Hubbell Power is not binding, the government said. It also said the facts of Hubbell Power were “materially different from those presented here,” as, in that case, Commerce had denied a separate rate to a mandatory respondent whose records the department found to be inadequate.

“Here, Commerce relied on its longstanding practice when it declined to grant separate rate status to companies who refused to participate as a mandatory respondent or respond to any questionnaires after being selected,” it said.

Plaintiffs also argued that the courts have reversed Commerce when it sought mandatory respondents too long after initiation of an original review. They asked CIT to do so again and to tell Commerce to assign them a 1.45% AD rate “pulled forward” from the previous review -- but this argument was “specious,” the government said, as the department was not required to do anything other than follow the instructions of the remand order.

CAFC’s opinion “certainly permits the selection of a second mandatory respondent,” it said.

No authority actually indicates that Commerce cannot choose an additional mandatory respondent after a certain period of time, the government said. The cases the plaintiffs cited in support of their argument, it said, weren't binding and had been misconstrued. Specifically, it said that the case they most relied on, Changzhou Hawd Flooring v. U.S., actually turned on a court holding that one respondent had been treated differently than others, not that too much time had passed to select another respondent at all.

It also said that it is “curious” that the plaintiffs were now arguing against selection of a mandatory respondent “when that is the precise outcome that these parties have long argued that the statute mandates.”

And just because CAFC hadn’t specifically directed Commerce to make any further rulings on the separate rate status of the review’s respondents didn’t mean the department couldn’t on its own, the government said. It said that “Commerce’s discretion on remand is not so limited,” and it was only required to “issue a determination consistent with” CAFC’s holding.

One exporter, Mayrun, argued that its separate rate was a settled issue and couldn’t be revisited by lower courts; but the company was incorrect because its status “became an issue implicated in litigation during Commerce’s calculation of the all-others rate,” the government said.

“If accepted, this argument would impermissibly constrain Commerce from conducting its remand proceedings in accordance with its normal practices,” it said.