US Importers Challenge Commerce's Scope Ruling on Thai Steel Wheel

Trailer wheels manufactured by Asia Wheel in Thailand were incorrectly ruled to be within the scope of antidumping and countervailing duty orders on certain steel wheels from China, U.S. importers Trailstar and TexTrail said in a pair of June 9 complaints at the Court of International Trade. Both complaints asked the court to find Commerce's final scope ruling illegal and to remand the ruling to the department (Trailstar v. U.S., CIT # 23-00097, and Textrail v. U.S., CIT # 23-00099).

The complaint follows Asia Wheel's own complaint on June 8, arguing that the scope language explicitly exempted trailer wheels made in a third country with only one part originating from China, and that Commerce's substantial transformation analysis was "fundamentally flawed" (see 2306080059).

In an April scope ruling, Commerce found that trailer wheels made in Thailand with parts originating in China were within the scope of AD/CVD orders on Chinese steel wheels (see 2305230005). Commerce said that the plain scope language was ambiguous regarding the status of finished wheels processed in a third country from a mix of components sourced from China and elsewhere.

Both Trailstar and TexTrail argue that the plain language of the scope is clear that wheels made in a third country from rims or discs from China are outside the scope of the AD/CVD Orders. Commerce's final ruling "unlawfully expanded" the scope and contradicted both the plain meaning of the scope and the department's own previous scope determination, the importers said.

In addition, the importers said that Asia Wheel "did not have a fair warning" that its steel wheels imported from Thailand were covered by the scope of the AD/CVD orders until Commerce issued its preliminary scope determination. The U.S. Court of Appeals for the Federal Circuit has found that suspension of liquidation is "impermissible" before the parties are given reasonable notice that the merchandise could be subject to AD/CVD liabilities. CAFC has held that retroactively assessing duties where importers received inadequate notice of their products’ inclusion in the scope of an AD/CVD investigation would be unfair, the importers said.

Finally, the importers argued that Commerce should have limited AD/CVD liabilities to the value of the Chinese component within the finished wheel rather than the entire wheel assembled in Thailand. The scope "clearly stated" that AD/CVD liabilities do not apply to components not otherwise subject to the orders, Textrail said in its complaint.