Guizhou Tyre Co., Ltd. v. United States

Slip Op. No. 23-80
UNITED STATES COURT OF INTERNATIONAL TRADE
GUIZHOU TYRE CO., LTD. AND
GUIZHOU TYRE IMPORT AND
EXPORT CO., LTD., et al.,
Plaintiffs, Before: Timothy C. Stanceu, Judge
v. Consol. Court No. 18-00099
UNITED STATES,
Defendant.
OPINION
[Sustaining an agency decision responding to court order in an action contesting
the results of an administrative review of an antidumping duty order on off-the-road
tires from the People’s Republic of China]
Dated: May 22, 2023
Daniel L. Porter, Curtis, Mallet-Prevost, Colt & Mosle LLP, of Washington, D.C.,
for plaintiffs Guizhou Tyre Co., Ltd., Guizhou Tyre Import and Export Co., Ltd., and
GTC North America, Inc. With him on the briefs were James C. Beaty and James P.
Durling.
Richard P. Ferrin, Faegre Drinker Biddle & Reath LLP, of Washington, D.C., for
plaintiff Valmont Industries, Inc. With him on the brief was Douglas J. Heffner.
John J. Todor, Senior Trial Counsel, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, D.C., for defendant. With him on the briefs
were Brian M. Boynton, Principal Deputy Assistant Attorney General, Jeanne D.
Davidson, Director, and Franklin E. White, Jr., Assistant Director. Of counsel on the briefs
was Paul K. Keith, Attorney, Office of the Chief Counsel for Trade Enforcement &
Compliance, U.S. Department of Commerce, of Washington, D.C.
Consol. Court No. 18-00099 Page 2
Stanceu, Judge: In this litigation, plaintiffs contested an administrative
determination (the “Final Results”) that the International Trade Administration, U.S.
Department of Commerce (“Commerce” or the “Department”) issued in an
antidumping duty proceeding. Before the court is the decision (the “Remand
Redetermination”) Commerce submitted to the court in response to the court’s opinion
and order in Guizhou Tyre Co. v. United States, 44 CIT __, 469 F. Supp. 3d 1338 (2020)
(“Guizhou I”). Redetermination Pursuant to Ct. Remand Order in Guizhou Tyre Co., Ltd. v.
United States, Consol. Ct. No. 18-00099 (Jan. 6, 2021), ECF Nos. 56 (Conf.), 57 (Public)
(“Remand Redetermination”). The court sustains the Remand Redetermination.
I. BACKGROUND
Background on this case is presented in the court’s prior opinion and is
summarized and supplemented herein. See Guizhou I, 44 CIT at __, 469 F. Supp. 3d at
1340–43.
The determination contested in this action concluded the eighth periodic
administrative review (“eighth review”) of an antidumping duty (“AD”) order (the
“Order”) on certain off-the-road (“OTR”) tires from the People’s Republic of China
(“China” or the “PRC”). See Certain New Pneumatic Off-the-Road Tires From the People’s
Republic of China: Final Results of Antidumping Duty Administrative Review and New
Shipper Review; 2015-2016, 83 Fed. Reg. 16,829 (Int’l Trade Admin. Apr. 17, 2018) (“Final
Results”). Commerce incorporated by reference into the Final Results an “Issues and
Consol. Court No. 18-00099 Page 3
Decision Memorandum” as an explanatory document. Issues and Decision Memorandum
for the Antidumping Duty Administrative Review and New Shipper Review: Certain New
Pneumatic Off-the-Road Tires from the People’s Republic of China; 2015-2016 (Int’l Trade
Admin. Apr. 11, 2018) (P.R. Doc. 300) (“Final I&D Mem.”).1
Guizhou Tyre Co., Ltd., a Chinese producer of OTR tires, and its wholly-owned
subsidiary, Guizhou Tyre Import and Export Co., Ltd., are plaintiffs in this consolidated
action. In this Opinion, the court refers to Guizhou Tyre Co., Ltd. and Guizhou Tyre
Import and Export Co., Ltd. collectively as “GTC.” For the eighth review, Commerce
decided to treat these two companies as a single entity (an “exporter-producer”), a
decision not contested here. GTC North America, Inc., an importer of OTR tires
exported by GTC and a wholly-owned affiliate of Guizhou Tyre Import and Export Co.,
Ltd., is also a plaintiff, as is Valmont Industries, Inc. (“Valmont”), an unaffiliated
importer of tires produced by Guizhou Tyre Co., Ltd.
Commerce issued the Order in 2008. Certain New Pneumatic Off-the-Road Tires
From the People’s Republic of China: Notice of Amended Final Affirmative Determination of
Sales at Less Than Fair Value and Antidumping Duty Order, 73 Fed. Reg. 51,624 (Int’l Trade
Admin. Sept. 4, 2008). Commerce initiated the eighth review in November 2016,
covering entries of Chinese OTR tires made during the period of review (“POR”) of
1
Citations to the Joint Appendix (Jan. 28, 2019), ECF Nos. 31 (Public), 32 (Conf.),
are cited as “P.R. Doc. __” for references to the public version and “C.R. Doc. __” for
references to the confidential version.
Consol. Court No. 18-00099 Page 4
September 1, 2015 through August 31, 2016. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 81 Fed. Reg. 78,778, 78,783 (Int’l Trade
Admin. Nov. 9, 2016). Commerce designated GTC as a “mandatory respondent,” i.e., a
respondent Commerce selected for individual examination in the eighth review. Id.
Also selected as a mandatory respondent was Weihai Zhongwei Rubber Co., Ltd.
(“Zhongwei”). Id.
In the Final Results, Commerce concluded that GTC and two other exporter-
producers failed to demonstrate independence from the PRC government and, for that
reason, assigned GTC and these other two companies an AD rate of 105.31%. Final
Results, 83 Fed. Reg. at 16,831. This was the rate Commerce assigned to the “PRC-wide
entity” (or “China-wide entity”), which Commerce designated as a single entity
comprised of those Chinese exporters of OTR tires that failed to rebut the Department’s
presumption of control by the PRC government. Under the Department’s practice, such
companies are ineligible to receive a “separate rate,” i.e., a rate separate from the rate
Commerce assigns to the PRC-wide entity. Id. at 16,830–31.
Concluding that Zhongwei had rebutted its presumption of government control,
Commerce assigned Zhongwei an individually determined weighted average dumping
margin of 11.87%. Id. at 16,830. Based on the margin it assigned to Zhongwei,
Commerce assigned a rate of 11.87% to two respondents it also found to have rebutted
Consol. Court No. 18-00099 Page 5
the presumption of government control but did not select for individual examination in
the review, Qingdao Qihang Tyre Co., Ltd. and Shandong Zhentai Group Co., Ltd. Id.
In contesting the Final Results, plaintiffs moved for judgment on the agency
record. Mot. for J. on the Agency R. & Br. of Pls. Guizhou Tyre Co. Ltd., Guizhou Tyre
Import and Export Co., Ltd. and GTC North America, Inc. in Supp. of Mot. for J. on the
Agency R. (Sept. 17, 2018), ECF Nos. 22 (Conf.), 23 (Public) (“GTC’s Br.”); Mot. of
Consol. Pl. Valmont Indus., Inc. for J. on the Agency R. under Rule 56.2 (Sept. 17, 2018),
ECF No. 24 (adopting in full the arguments in GTC’s Br.).
Following two requests by defendant for remands to allow Commerce to address
certain issues raised by plaintiffs’ claims, and after oral argument, the court issued
Guizhou I, remanding the Final Results to Commerce for reconsideration. 44 CIT at __,
469 F. Supp. 3d at 1358–59. In response, Commerce, on January 6, 2021, filed the
Remand Redetermination, in which it made no change to the 105.31% rate it assigned to
GTC in the Final Results but changed the rationale for its decision. Remand
Redetermination at 31. GTC and its affiliated importer filed a comment submission in
opposition. Comments on Final Remand Redetermination Results Pursuant to Ct.
Remand (Feb. 5, 2021), ECF Nos. 62 (Conf.), 63 (Public) (“GTC’s Comments”). Valmont
did not comment on the Remand Redetermination. Defendant responded to the
comments, arguing that the Remand Redetermination should be sustained. Def.’s Resp.
to Comments on Remand Results (Mar. 4, 2021), ECF Nos. 66 (Conf.), 67 (Public).
Consol. Court No. 18-00099 Page 6
II. DISCUSSION
A. Jurisdiction and Standard of Review
The court exercises jurisdiction under section 201 of the Customs Courts Act of
1980, 28 U.S.C. § 1581(c), pursuant to which the court reviews actions commenced
under section 516A of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a (the “Tariff
Act”), including an action contesting a final determination that Commerce issues to
conclude an administrative review of an antidumping duty order.2
In reviewing a final determination, the court “shall hold unlawful any
determination, finding, or conclusion found . . . to be unsupported by substantial
evidence on the record, or otherwise not in accordance with law.” 19 U.S.C.
§ 1516a(b)(1)(B)(i). Substantial evidence refers to “such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.” SKF USA, Inc. v.
United States, 537 F.3d 1373, 1378 (Fed. Cir. 2008) (quoting Consol. Edison Co. v. NLRB,
305 U.S. 197, 229 (1938)).
B. Plaintiffs’ Claims Contesting the Final Results
Plaintiffs’ challenge to the Final Results involved four claims, which are
summarized below.
2
All citations to the United States Code herein and all citations to the Code of
Federal Regulations herein are to the 2018 editions.
Consol. Court No. 18-00099 Page 7
1. Plaintiffs’ Challenge to the Legal Basis for Assigning a Rate to the
PRC-Wide Entity
Plaintiffs challenged the practice Commerce applies when the subject
merchandise is exported from a non-market economy (“NME”) country, such as China.
As the court in Guizhou I described the first claim, “[p]laintiffs, in effect, challenge the
legal basis for the Department’s practice of determining and assigning a rate for the
PRC-wide entity as applied in the eighth review.” 44 CIT at __, 469 F. Supp. 3d at 1344.
Plaintiffs relied on Section 735(c)(1)(B)(i) of the Tariff Act, 19 U.S.C. § 1673d(c)(1)(B)(i),
in arguing that the Tariff Act “does not empower Commerce to write a whole new type
of AD margin from scratch for non-market economies.” Id. (citation omitted). Plaintiffs
maintain that “in an antidumping duty proceeding (as opposed, specifically, to a
countervailing duty proceeding), the statute confines Commerce to assigning
respondents either an individually determined margin or an ‘all-others’ rate, and that
the rate Commerce determined for the PRC-wide entity and assigned to GTC falls into
neither of these categories.” Id. (citation omitted).
Defendant asked for a remand “for Commerce to reconsider its explanation of its
statutory authority to apply NME-wide rates in light of this Court’s findings in Thuan
An.” Id., 44 CIT at __, 469 F. Supp. 3d at 1347 (citing Thuan An Production Trading &
Service Co. v. United States, 42 CIT __, 348 F. Supp. 3d 1340 (2018) (“Thuan An I”)). In
Thuan An I, this Court remanded to Commerce the final results of an administrative
review of an antidumping duty order on certain frozen fish fillets from Vietnam, an
Consol. Court No. 18-00099 Page 8
NME country. The court in Guizhou I noted that this Court, in Thuan An Production
Trading & Service Co. v. United States, 43 CIT __, 396 F. Supp. 3d 1310 (2019) (“Thuan
An II”)), “sustained the Department’s remand redetermination, which offered a new
explanation for the Department’s decision.” Guizhou I, 44 CIT at __, 469 F. Supp. 3d
at 1348 (citing Thuan An II, 43 CIT at __, 396 F. Supp. 3d at 1319).
2. Plaintiffs’ Claim that GTC Was Entitled to a Rate Based on Its Own Sales
Plaintiffs’ second claim was that even were Commerce presumed to have
authority to invent a new type of rate for the PRC-wide entity, it still would be unlawful
for Commerce to carry over the 105.31% rate from prior reviews (which was derived in
part from “facts otherwise available” and an “adverse inference” (collectively, “adverse
facts available” or “AFA”), determined under Section 776 of the Tariff Act, 19 U.S.C.
§ 1677e), and apply it to GTC, a fully cooperative respondent. “They argue that
Commerce, even under such a presumption, would have been required to calculate a
new rate for the PRC-wide entity in the eighth review and was required to do so using
GTC-specific data.” Guizhou I, 44 CIT at __, 469 F. Supp. 3d at 1344 (citation omitted).
In support of their second claim, plaintiffs “take issue with the Department’s
rationale for not reviewing the PRC-wide entity, which was that no review of the
PRC-wide entity was requested.” Id. (citation omitted). For the Final Results,
Commerce based its justification for assigning GTC the PRC-wide rate partly on a
conclusion that no party requested that Commerce review the PRC-wide entity when
Consol. Court No. 18-00099 Page 9
conducting the eighth review of the Order. Id., 44 CIT at __, 469 F. Supp. 3d at 1355
(citing Final I&D Mem. at 22).
3. Plaintiffs’ Challenge to the Determination that GTC Was Subject to Government
Control
Plaintiffs’ third claim is that “Commerce erred in concluding that GTC had not
put forth information establishing independence from the Chinese government and,
specifically, in determining that the government of the PRC controls GTC’s export
activities.” Id., 44 CIT at __, 469 F. Supp. 3d at 1344 (citation omitted). “They argue that
in making these determinations, Commerce did not follow the correct criteria . . . and
reached a determination unsupported by substantial evidence on the record of the
review.” Id. (citations omitted).
4. Plaintiffs’ Challenge to the Calculation of the 105.31% Margin Assigned to GTC
Plaintiffs’ final claim is that in assigning GTC the rate of 105.31%, Commerce
“unlawfully refused to make adjustments” for domestic and export subsidies found in
the parallel administrative review of a countervailing duty order on off-the-road tires
from the PRC. Id., 44 CIT at __, 469 F. Supp. 3d at 1344–45 (citation omitted).
C. The Court’s Opinion and Order in Guizhou I
The court in Guizhou I addressed the first three of plaintiffs’ claims, remanding
the Final Results to Commerce with respect to them and deferred any ruling on the
remaining claim. Id., 44 CIT at __, 469 F. Supp. 3d at 1358 (“The court considers it
Consol. Court No. 18-00099 Page 10
premature to address this claim at this time because the issue raised by this claim may
be mooted by the remand redetermination the court is ordering.”).
Addressing plaintiffs’ first two claims, and the government’s request for a
remand as to those claims, the court in Guizhou I directed Commerce to reconsider its
decision not to review, and therefore not individually examine, GTC and on that basis
decline to assign GTC a margin based on its own sales. Id. The court cited the “general
rule” in Section 777A(c)(1) of the Tariff Act, 19 U.S.C. § 1677f-1(c)(1), that Commerce
must determine an individual weighted average dumping margin for each known
exporter and producer of the subject merchandise. Id., 44 CIT at __, 469 F. Supp. 3d at
1349–50. The court also mentioned that the statutory exception to that rule, 19 U.S.C.
§ 1677f-1(c)(2), which allows Commerce to determine individual margins for fewer than
all known exporters and producers due to the “large number” of such exporters and
producers, did not apply here, Commerce itself having selected GTC as one of the two
mandatory respondents in the review. Id. The court noted that in the eighth review
Commerce concluded that GTC was not under review, reasoning that it was part of the
PRC-wide entity, for which, Commerce concluded, no review had been requested. Id.
The court in Guizhou I stated that 19 U.S.C. § 1677f-1(c) does not authorize Commerce
“to decline to review, as opposed to examine individually, a known exporter or
producer” for which a review had been requested in a related section of the Tariff Act,
19 U.S.C. § 1675(a)(1). Id.
Consol. Court No. 18-00099 Page 11
The court in Guizhou I distinguished plaintiffs’ claim from the claim adjudicated
in the Thuan An cases, explaining that the opinions in those cases “do not indicate that
the plaintiff in that litigation contested the Department’s conclusion that the plaintiff
could have requested a review of the Vietnam-wide entity” and that “plaintiffs in this
case argue that the Department’s regulations did not permit them to request a review of
the PRC-wide entity.” Id., 44 CIT at __, 469 F. Supp. 3d at 1348 (citation omitted). Upon
analyzing the applicable regulation, 19 C.F.R. § 351.213(b), the court in Guizhou I agreed
with plaintiffs, concluding that the regulation did not include parties in GTC’s position
among those who could request a review of a party other than itself. Id., 44 CIT at __,
469 F. Supp. 3d at 1355. Pointing to § 351.213(b)(2) in particular, the court concluded
that GTC “could not invoke this provision to request a review of unidentified members
of the China-wide entity and GTC, not being the China-wide entity itself, could not
invoke this provision for the entire entity.” Id., 44 CIT at __, 469 F. Supp. 3d at 1356
(footnote omitted).
Based on the plain meaning of 19 C.F.R. § 351.213(b), the court in Guizhou I ruled
that “in the eighth review it was impermissible for Commerce to assign the PRC-wide
rate to GTC on the proffered justification that parties (including these plaintiffs) had a
right to submit a request for a review of the China-wide entity but failed to do so.” Id.,
44 CIT at __, 469 F. Supp. 3d at 1358 (citations omitted). The court directed Commerce
to address the question of “whether, in the circumstances of the eighth review,
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Commerce was (as plaintiffs argue) required to review GTC and assign GTC, as a
mandatory respondent, GTC’s own individual dumping margin, regardless of any
treatment Commerce accorded to what it regarded as the PRC-wide entity.” Id., 44 CIT
at __, 469 F. Supp. 3d at 1348–49. The court in Guizhou I concluded that “[d]efendant
has not responded to plaintiffs’ claims in a way that demonstrates that Commerce
lawfully could refuse to review GTC in the particular circumstances of the eighth
review.” Id., 44 CIT at __, 469 F. Supp. 3d at 1358–59. The court added that “but
because defendant has asked for a remand related to this issue, the court will reserve
any decision on this issue until it is presented with the Department’s position and its
reasoning therefor.” Id., 44 CIT at __, 469 F. Supp. 3d at 1359.
In Guizhou I, the court remanded the agency decision contested in plaintiffs’ third
claim—i.e., that GTC failed to rebut the presumption of government control—in
response to defendants’ request. Commerce supported that decision, in part, with a
finding that GTC elected members of its board of directors through a shareholder’s
meeting that was not available to all shareholders, a finding GTC disputed and for
which defendant requested that Commerce be given an opportunity to reconsider. Id.,
44 CIT at __, 469 F. Supp. 3d at 1346. The court directed Commerce to reconsider in the
entirety the determination that GTC had failed to rebut the presumption of government
control, directing that “[i]f Commerce determines that GTC has rebutted its
presumption of government control, it must assign GTC, which Commerce selected as a
Consol. Court No. 18-00099 Page 13
mandatory respondent, an individual weighted average dumping margin.” Id., 44 CIT
at __, 469 F. Supp. 3d at 1347.
D. The Department’s Remand Redetermination in Response to Guizhou I
In the Remand Redetermination, Commerce made no change to the 105.31% rate
to be applied to GTC’s subject merchandise but put forth a different rationale for its
decision not to assign to GTC an individual weighted average dumping margin.
Reversing its previous position that GTC did not qualify for a review, Commerce now
asserted that in fact it had conducted a review of GTC, describing as a “review” its
determining that GTC had failed to rebut the presumption of government control, but
maintained its earlier position that the PRC-wide entity was not under review. Remand
Redetermination at 15–16. Also, as discussed below, Commerce now agreed with
plaintiffs, and with the court’s holding in Guizhou I, that individual respondents such as
GTC were precluded by the Department’s regulation from requesting a review of the
PRC-wide entity. Id. at 22.
1. The Finding of Government Control of GTC’s Export Functions
The Remand Redetermination stated that in determining whether a respondent
has rebutted its presumption of government control over its export functions,
“Commerce typically considers four factors,” as follows:
1. Whether the export prices are set by or are subject to the approval of a
government agency;
Consol. Court No. 18-00099 Page 14
2. Whether the respondent has authority to negotiate and sign contracts
and other agreements;
3. Whether the respondent has autonomy from the government in
making decisions regarding the selection of management; and
4. Whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses.
Id. at 4–5 n.17 (citations omitted). Commerce took the position that all four factors must
be met in order for a respondent to rebut the Department’s presumption. Id. at 5 n.18
(citation omitted). As discussed below, Commerce concluded that the third factor was
not satisfied and, with respect to the fourth factor, also found that GTC did not have
independent control of the distribution of profits.
Commerce found “that GTC is not free from government control in making
decisions regarding the selection of its management and thus is subject to de facto
government control of its export functions.” Id. at 4–5 (footnotes omitted). Commerce
cited record evidence that the Guiyang State-owned Assets Supervision and
Administration Commission (“Guiyang SASAC”), through its 100-percent-owned
affiliate, Guiyang Industry Investment Group Co., Ltd. (“GIIG”), held 25.33% of GTC’s
shares during the POR. Id. at 3–5 (citing GTC’s First Supplemental Section A Response at
Ex. SA-3 (June 16, 2017) (C.R. Docs. 240–248) (“SAQR”)). Commerce found that “GIIG
is 100 percent owned and supervised by Guiyang SASAC” and inferred that “through
its large ownership stake, GIIG can control, and has an interest in controlling, the
Consol. Court No. 18-00099 Page 15
operations of GTC, including the selection of management and the profitability of the
company.” Id. at 5 (citing Section A Questionnaire Response at 3–4 & Ex. A-1 (Feb. 7, 2017)
(P.R. Docs. 57, 59–61, 63–66) (C.R. Docs. 11, 21, 22–33, 37–38) (“AQR”)). Commerce
found, further, that the next nine shareholders held only a combined 4.7% share, id. at 3
(citing SAQR at Ex. SA-3), and that no individual shareholder other than GIIG held
even a one percent ownership share, id. at 6 (citing AQR at Ex. A-1).
Commerce considered the position of GIIG within GTC’s ownership structure to
be significant in light of GTC’s Articles of Association (“AoAs”), according to which,
Commerce found, “GIIG is able to exert control through shareholders’ meetings, the
selection of directors, and in turn, the selection of the chairperson.” Id. Commerce
further found that “because GIIG is the only shareholder with more than three percent
of shares, GIIG is the only shareholder with the requisite shares to individually put
forward proposals for consideration at shareholders’ meetings, pursuant to Article 54 of
GTC’s AoA’s.” Id. (citing AQR at Ex. A-2). Commerce noted that Article 83 of the AoAs
“states that the list of candidates for directors and supervisors shall be based upon
proposal/motion at the shareholders’ general meeting.” Id. (citing AQR at Ex. A-2).
Commerce also found that the AoAs provide that “the board of directors shall appoint
or remove GTC’s general manager and four deputy general managers.” Id. at 7–8
(citing AQR at Ex. A-2). Therefore, GTC, according to Commerce, did not have
autonomy in the selection of management due to the control of the board of directors
Consol. Court No. 18-00099 Page 16
over senior management selection. Id. at 8–9. Commerce also found that the AoAs, in
Article 161 (IV), allowed GIIG to affect the company’s distribution of profits. Id. at 8
(citing AQR at Ex. A-2). In summary, the Department’s principal findings supporting
the conclusion that the presumption was unrebutted were that GIIG effectively had
control over the composition of GTC’s board of directors and the selection of its
chairperson and that the board, having the authority to appoint or remove GTC’s
general manager and four deputy general managers, also could control the selection of
management. Id. at 9 (“GTC’s board is responsible for the selection of senior
management, which controls the operations of the company including the company’s
export activity.”).
As they did in contesting the Final Results, GTC and its affiliated importer raise a
general objection to the methodology Commerce used in the Remand Redetermination,
which did not ground the determination in all four of the factors Commerce identified
for deciding whether a respondent rebutted the presumption of de facto government
control of its export functions. See GTC’s Comments 6–8. These plaintiffs do not
convince the court that Commerce acted impermissibly in requiring a respondent to
demonstrate independence as to all four of its factors and, in this instance, in basing its
decision on only two of them.
The Department’s use of its rebuttable presumption of de facto government
control by the Chinese government does not effectuate any specific provision of the
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Tariff Act or the Department’s regulations. See, e.g., Jilin Forest Indus. Jinqiao Flooring
Grp. Co. v. United States, 47 CIT __, __, 617 F. Supp. 3d 1343, 1356 (2023). As a result,
there is no statutory language, legislative history, or regulatory language or preamble to
serve as guidance under which the court may disallow the Department’s methodology
as ultra vires or unreasonable per se. At the same time, the court is guided by binding
precedent of the Court of Appeals for the Federal Circuit (“Court of Appeals”), which
repeatedly has affirmed the Department’s authority to apply a rebuttable presumption
of government control, even to a cooperative mandatory respondent such as GTC.
China Mfrs. Alliance, LLC v. United States, 1 F.4th 1028, 1039 (Fed. Cir. 2021) (“CMA”);
Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304, 1313 (Fed. Cir. 2017)
(“Diamond Sawblades”). Commerce, therefore, must be allowed broad discretion in
selecting the methodology by which it interprets and effectuates its presumption of
government control over export functions. The breadth of this discretion requires the
court to reject these plaintiffs’ general objection to the methodology Commerce applied
in the Remand Redetermination, which placed substantial weight on the ability of a
single, government-owned shareholder to control the selection of board members and
company management.
GTC and its importer also argue that Chinese domestic law limits “the rights of
shareholders with a majority or controlling interest” and “grant[s] certain rights of
supervision and control to minority shareholders.” GTC’s Comments 4–5 (citation
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omitted). Responding to findings by Commerce that GIIG was able to dominate GTC’s
decision-making process and appoint its preferred members to GTC’s board, they
submit that “Commerce fails . . . to confront important contrary record evidence or
show how the events it identifies lead to the conclusion that GIIG is acting in a manner
that would cause GTC to export subject merchandise to the United States at distorted
prices.” Id. at 5.
They argue, further, that Commerce ignored evidence that GIIG’s level of control
over the selection of board members “did not result in control of management.” Id. at 7.
They point to evidence of management autonomy from the board of directors in making
certain types of ordinary business decisions (for which they claim confidentiality as to
the specific content).3 Id. (citing AQR at Ex. A-9). In so doing, GTC and its importer
direct their argument to the question of control over ordinary business decisions of a
type that would be expected to be the province of management, not the board of
directors. GTC and its importer validly may object that Commerce did not cite record
evidence that GIIG or the board exerted effective control over such day-to-day
decisions, but that objection is insufficient for the court to disallow the Department’s
ultimate conclusion that GTC did not rebut the presumption of government control of
The court has not included in this Opinion the specific record information
3
concerning those types of decisions but notes that the claim of confidentiality appears to
be unsubstantiated; i.e., it does not appear that public disclosure could result in harm to
any party’s competitive position or otherwise be injurious to its business interests.
Consol. Court No. 18-00099 Page 19
the company’s export functions. An agency may draw reasonable inferences from the
record evidence considered as a whole. SeAH Steel VINA Corp. v. United States, 950 F.3d
833, 845 (Fed. Cir. 2020) (quoting Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927,
933 (Fed. Cir. 1984) for the principle that “substantial evidence includes ‘reasonable
inferences from the record’”). In this case, the record evidence pertaining to the
ownership structure, where no shareholder other than GIIG held even a one percent
share, and to the Articles of Association, supported a finding that a governmental
entity, alone among all shareholders, had the power to control the selection of the board
and the selection of senior management.4
From the record evidence and the findings of fact it supported, Commerce
reasonably could infer that GTC’s management would be influenced by the
governmental entity in their day-to-day business decisions, having owed their
appointment to, and being subject to removal by, the board of directors. In short,
Commerce was permitted to draw the inference from ownership structure and the
AoAs that GTC’s management, while having some autonomy over the day-to-day
operations, had not been demonstrated to be independent of the overall influence of the
company’s largest, government-owned, shareholder. Based on its methodology,
according to which GTC was required to satisfy all four factors of the Department’s test,
The court does not hold or imply that a 25.33% ownership share by a
4
government-owned shareholder that is the largest shareholder is by itself sufficient to
support a finding of government control over selection of management.
Consol. Court No. 18-00099 Page 20
and on the record evidence, Commerce permissibly determined that GTC failed to
demonstrate independence from “de facto government control of its export functions.”
Remand Redetermination at 4–5 (citation omitted).
2. Authority to Assign the PRC-Wide Rate to GTC
The Remand Redetermination responded to the directive in Guizhou I that
Commerce, even if concluding that GTC failed to establish independence from
government control, decide whether the Tariff Act required the assigning of an
individual weighted average dumping margin to GTC in the circumstances of the
eighth review. Commerce decided, once again, to assign GTC the PRC-wide rate of
105.31% instead of a rate based on an examination of GTC’s own sales. In doing so,
Commerce employed different reasoning than it put forth in support of the Final
Results. As discussed above, the court in Guizhou I rejected one of the reasons
Commerce offered for why it was permissible to assign GTC the China-wide rate of
105.31%, which was that no party requested a review of the China-wide entity.
Guizhou I, 44 CIT at __, 469 F. Supp. 3d at 1355. The court concluded in Guizhou I that
the Department’s regulation, 19 C.F.R. § 351.213(b), did not allow GTC to do so. Id.,
44 CIT at __, 469 F. Supp. 3d at 1356.
In the Remand Redetermination, Commerce agreed with the court’s conclusion
in Guizhou I that, according to 19 C.F.R. § 351.213(b), only a domestic interested party or
the government of China, but not a foreign exporter/producer such as GTC, was eligible
Consol. Court No. 18-00099 Page 21
to request a review of the PRC-wide entity. Remand Redetermination at 22. The Remand
Redetermination also states: “That Commerce’s regulations do not provide exporters or
producers with the ability to request a review of the NME-entity as a whole does not
result in prejudice to the exporters or producers.” Id. Commerce reasoned that GTC
was not prejudiced because it was, in fact, “reviewed.” Id. (“[W]e conducted a review
of GTC, and as part of that review we determined GTC to be a part of the China-wide
entity, which resulted in our assigning GTC the China-wide entity rate.”).
The court disagrees with the Department’s conclusion that GTC was not
prejudiced by its inability to request a review of the PRC-wide entity. Under the
Department’s methodology, a review of the PRC-wide entity potentially would have
allowed GTC to obtain a rate different than the 105.31% rate it was assigned, based on
record data in the eighth review, including its own data.
The court also is unconvinced by the Department’s reasoning that GTC was not
prejudiced because it was, in fact, reviewed. A “review” conducted under Section 751
of the Tariff Act, 19 U.S.C. § 1675(a), is not the statutory equivalent of an individual
examination conducted according to Section 777A(c)(1) of the Tariff Act, 19 U.S.C.
§ 1677f-1(c)(1). Thus, under the Tariff Act, a “reviewed” respondent is not necessarily
an individually examined respondent. Commerce neither allowed GTC to obtain a
review based on an individual examination of its own sales nor allowed GTC to request
a review based on an examination of all the sales made by the PRC-wide entity, which
Consol. Court No. 18-00099 Page 22
Commerce treated as a single exporter, yet one that was beyond the scope of any review
request that GTC could submit under § 1675(a).5
Even though GTC was prejudiced by its inability to request a review of the PRC-
wide entity, the Department’s statement to the contrary does not suffice to require the
court to issue a second remand order to Commerce. Guizhou and its importer make
several arguments in objecting to the assignment of the PRC-wide rate to GTC, but they
present all of these arguments as grounds in support of the same claim: that Commerce
was required by statute to treat GTC as a separate rate respondent, i.e., one that must be
assigned either an individual dumping margin or an all-others rate. See GTC’s
Comments 15 (arguing that GTC was “under review and thus eligible for either an
individually examined rate or an all-others rate”). They do not claim, in the alternative,
that the court should issue a second remand order directing Commerce to review the
5
In Jilin Forest Indus. Jinqiao Flooring Grp. Co. v. United States, 47 CIT __, 617
F. Supp. 3d 1343 (2023) (“Jilin”), the Court of International Trade recently rejected a
rationale by Commerce that was similar in certain respects to the one Commerce offered
in decision at issue, Redetermination Pursuant to Ct. Remand Order in Guizhou Tyre Co.,
Ltd. v. United States, Consol. Ct. No. 18-00099 at 17 (Jan. 6, 2021), ECF Nos. 56 (Conf.), 57
(Public). As stated in Jilin:
While Commerce may apply facts available or adverse facts available
to a mandatory respondent when certain conditions are met (e.g., to fill gaps
in the record of necessary information), the statute does not indicate that
Commerce can simply assign a rate to a mandatory respondent based on its
relationship to an NME government.
Id., 47 CIT at __, 617 F. Supp. 3d at 1353 (citing 19 U.S.C. § 1677e).
Consol. Court No. 18-00099 Page 23
PRC-wide entity. Nor do they claim that the Department’s regulation, 19 C.F.R.
§ 351.213(b), should be declared invalid as contrary to the Tariff Act, with the result that
the court now must order Commerce to place the PRC-wide entity under review. As
the court discusses below, binding precedent of the Court of Appeals forecloses relief
on these plaintiffs’ claim that GTC, even if failing to rebut the presumption of
government control, is entitled to a separate rate.
In its comments opposing the Remand Redetermination, GTC and its importer
assert the “absence of a statutory basis for applying a PRC-Wide rate to a cooperating
company under review.” Id. at 9. They present two arguments in support of this
position.
Plaintiffs argue, first, that the PRC-wide rate could not be applied lawfully to
GTC because it is neither an “all-others” rate as provided for in 19 U.S.C.
§ 1673d(c)(1)(B)(i)(II), id. at 11, nor an “individually investigated” rate as provided for in
19 U.S.C. § 1673d(c)(1)(B)(i)(I), Commerce not having individually examined the PRC-
wide entity in the eighth review, id. at 10. They maintain that Commerce impermissibly
confined its procedure to “carrying over a rate from a prior period with different
respondents, different market conditions, and different volumes and prices of sales of
subject merchandise.” Id.
The court is not persuaded by this first argument because the Court of Appeals
rejected essentially the same argument in CMA, 1 F.4th at 1037, a decision issued after
Consol. Court No. 18-00099 Page 24
Commerce filed the Remand Redetermination in this proceeding and after the
submission of comments thereon. CMA arose from the fifth review of the same
antidumping duty order that was at issue in this proceeding; in fact, it was in the fifth
review that Commerce originally determined the 105.31% rate for the PRC-wide entity,
which Commerce continued to carry forward and assigned to GTC in the eighth review.
The Court of Appeals noted that Commerce based its initial PRC-wide rate in the
original investigation on facts otherwise available and an adverse inference, on the
ground that only thirty of ninety-four identified Chinese exporters of the subject
merchandise responded to the Department’s quantity and value questionnaire. CMA,
1 F.4th at 1037 (“The PRC-wide entity rate resulting from Commerce’s initial
investigation constitutes an ‘individually investigated’ weighted average dumping
margin within the meaning of § 1673d(c)(1)(B)(i)(I) because ‘Commerce treats the
companies comprising the China-wide entity as a single entity and investigated them as
such in the original investigation.’” (quoting Appellant’s Reply Br.)). Reasoning that no
“additional investigation” by Commerce “into the country-wide entity is required in
order to comport with the statute in carrying this investigated rate forward into later
administrative review proceedings,” id., the Court of Appeals concluded in CMA that
“[w]e now confirm that the resulting country-wide NME entity rate may be an
‘individually investigated’ rate within the meaning of 19 U.S.C. § 1673d(c)(1)(B)(i)(I),
Consol. Court No. 18-00099 Page 25
which Commerce may determine using its ordinary techniques of investigation,” id.,
1 F.4th at 1039.
Two facts underlying the Department’s assigning the PRC-wide rate to GTC in
the eighth review and the Remand Redetermination parallel those of CMA. Like GTC,
the exporter in the antidumping review at issue in CMA, Double Coin Holdings Ltd.
(“Double Coin”), fully cooperated in the administrative review; also, like GTC, Double
Coin was selected by Commerce as a mandatory respondent. The Court of Appeals
considered those two facts to be insufficient to qualify Double Coin for an individual
weighted average dumping margin under 19 U.S.C. § 1677f-1(c)(2).
GTC and its importer base their second argument on the court’s holding in
Guizhou I that “it was impermissible for Commerce to assign the PRC-wide rate to GTC
on the proffered justification that parties (including these plaintiffs) had a right to
submit a request for a review of the China-wide entity but failed to do so.” GTC’s
Comments 14 (quoting Guizhou I, 469 F. Supp. 3d at 1358). According to their
argument, “[t]hat is, however, exactly what Commerce has offered this Court as its
justification” in the Remand Redetermination. Id. at 15. In their view, “Commerce has
failed to grapple with the essential question posed by it to this Court” and “[i]f GTC
was under review and thus eligible for either an individually examined rate or an all-
others rate it could not be assigned a rate that reflects a notional entity of which it was
not a part and was not eligible to request a review of.” Id. They maintain that
Consol. Court No. 18-00099 Page 26
“Commerce[’s] remand results do nothing to resolve this discrepancy between the
strictures of the statute and Commerce’s practices regarding its implementation of the
regulations.” Id. In other words, they rely on their inability to request a review of the
PRC-wide entity as one of the reasons why, in their view, the court now must order
Commerce to treat GTC as a separate rate respondent, i.e., an exporter or producer that
is “eligible for either an individually examined rate or an all-others rate.” Id. The court
must reject this argument.
The binding precedents of CMA and Diamond Sawblades preclude the court from
ordering any remedy on these plaintiffs’ claim that GTC, even if found not to have
rebutted the presumption of government control, must be treated as a separate rate
respondent. In CMA, the Court of Appeals stated that its prior precedents “uniformly
sustained Commerce’s recognition of an NME-wide entity as a single exporter for
purposes of assigning an antidumping rate to the individual members of the entity.”
CMA, 1 F.4th at 1036–37 (citing Michaels Stores, Inc. v. United States, 766 F.3d 1388, 1390–
91 (Fed. Cir. 2014)) (emphasis added). The necessary implication of the principle
applied by the Court of Appeals is that an individual respondent such as GTC, even if a
mandatory respondent, is not itself a “known exporter or producer” within the
meaning of 19 U.S.C. § 1677f-1(c) unless it rebuts the presumption of government
control. Under the holdings in CMA and Diamond Sawblades, that is so even though the
respondent is a “reviewed” exporter or producer for purposes of an administrative
Consol. Court No. 18-00099 Page 27
review of an antidumping duty order conducted under 19 U.S.C. § 1675(a) and 19 C.F.R.
§ 351.213(b)(2) (“. . . an exporter or producer covered by an [antidumping duty] order
. . . may request in writing that the Secretary [of Commerce] conduct an administrative
review of only that person.”). Thus, under the Department’s methodology, the PRC-
wide entity, and not GTC, is the actual “known exporter or producer,” within the
meaning of that term as used in 19 U.S.C. § 1677f-1(c), of the merchandise GTC exported
to the United States during the POR. But in commenting on the Remand
Redetermination, these plaintiffs, who claim that GTC must be treated as a separate rate
respondent, do not seek a review of the PRC-wide entity. See GTC’s Comments 15.
The court next considers whether Commerce is required by the circumstances of
this case to assign a new rate for the PRC-wide entity that is based partly on the
individual sales data of GTC. If so, the court would issue a second remand order
directing Commerce to consider that question.
CMA and Diamond Sawblades held that Commerce acts within its broad discretion
when it decides that a redetermined rate for a PRC-wide entity may be based in part on
a pre-existing, AFA-based rate. CMA, 1 F.4th at 1038 (citing Dongtai Peak Honey Industry
Co. v. United States, 777 F.3d 1343, 1356); Diamond Sawblades, 866 F.3d at 1314–15.
Referring to its previous decision in Diamond Sawblades, the Court of Appeals stated in
CMA that “[i]n that case, as in this case, Commerce did not review the composition of
the PRC-wide entity, or data particular to the exports of members of the PRC-wide
Consol. Court No. 18-00099 Page 28
entity, but did review the PRC-wide rate.” CMA, 1 F.4th at 1038 (citing Diamond
Sawblades, 866 F.3d at 1309). Commerce reached an analogous result in the fifth review
of the Order, which CMA affirmed.
Both CMA and Diamond Sawblades arose from the Department’s assigning the
mandatory respondent a new rate calculated for the PRC-wide entity by averaging the
respondent’s rate, determined in the review from the respondent’s own data, with a
rate for the PRC-wide entity that was carried forward from the prior review. See CMA,
1 F.4th at 1038 (“Commerce determined that the proper PRC-wide entity rate for the
fifth annual review is a simple average of the carried-forward AFA-based PRC-wide
rate of 210.48% and Double Coin’s 0.14% investigated rate, for a PRC-wide rate
105.31%); Diamond Sawblades, 866 F.3d at 1309 (explaining that Commerce determined a
new PRC-wide rate by averaging the carried-forward PRC-wide rate of 164.09% with
the calculated final margin for the respondent, 0.15%, to yield a new PRC-wide entity
rate of 82.12%). In Diamond Sawblades, the Court of Appeals opined that “the fact of
cooperation may help an entity in a NME country seek a reduction of the country-wide
rate, as it did here, but it does not, without more, save it from that rate.” Diamond
Sawblades, 866 F.3d at 1315. Nevertheless, the court concludes that a second remand to
direct Commerce to consider a redetermined rate for the PRC-wide entity is not
warranted in this case, for two reasons.
Consol. Court No. 18-00099 Page 29
First, plaintiffs waived the opportunity to challenge the Remand
Redetermination on a claim that Commerce should have averaged an individually
determined rate with the PRC-wide rate and applied the result to GTC. GTC and its
importer filed comments on the Remand Redetermination on February 5, 2021, which,
although occurring before the Court of Appeals decided CMA later that year, was after
the August 7, 2017 date the Court of Appeals decided Diamond Sawblades. The Diamond
Sawblades opinion placed them on notice that, while claiming that GTC must have its
own individual margin, they also could have claimed in the alternative that any PRC-
wide rate applied to GTC should have been derived through a methodology that
reflected, in part, GTC’s own data. As the Diamond Sawblades opinion explained, a
cooperating respondent that is part of the country-wide entity, under the Department’s
methodology, could “seek a reduction of the country-wide rate.” Id.Instead, GTC and its importer made only two claims in their February 5, 2021
comment submission to the court: that GTC had rebutted the presumption of
government control over its export functions, GTC’s Comments 3–8, and that,
regardless of whether it had done so, Commerce was prohibited by the Tariff Act from
“applying a PRC-Wide rate to a cooperating company under review,” id. at 9.
Throughout the comment submission, these plaintiffs directed their arguments to a
claim that GTC qualified for a separate rate. Nowhere does the submission claim in the
alternative that even were Commerce presumed to have the authority to assign GTC a
Consol. Court No. 18-00099 Page 30
rate for the PRC-wide entity, Commerce first was required to recalculate the PRC-wide
rate by averaging it with a rate based on GTC’s sales. Any such argument is, therefore,
waived.
Second, the court does not interpret the holding of CMA or of Diamond Sawblades
to require the court, sua sponte, to remand a decision (such as the Remand
Redetermination at issue here) to direct Commerce to consider averaging the carried-
forward rate with an individually-determined rate before applying it to a respondent
that did not seek that remedy.6 CMA and Diamond Sawblades hold that Commerce may
assign the NME country-wide rate, rather than a separate rate, to a nonmarket economy
country respondent, even a fully-cooperating mandatory respondent, that failed to
rebut the presumption of government control. That is what Commerce did in the
Remand Redetermination.7
6
In neither of the cases did the Court of Appeals for the Federal Circuit (“Court
of Appeals”) decide the issue of whether the “simple average” method employed by
Commerce to redetermine the PRC-wide rate was reasonable, as the parties in those
cases did not raise that issue on appeal. China Mfrs. Alliance, LLC v. United States, 1 F.4th
1028, 1038 n.8 (Fed. Cir. 2021) (“CMA”); Diamond Sawblades Mfrs. Coal. v. United States,
866 F.3d 1304, 1309 n.3 (Fed. Cir. 2017).
7
In addition to CMA, another precedential decision of the Court of Appeals,
YC Rubber Co. (North America) LLC v. United States, No. 21-1489, 2022 WL 3711377 (Fed.
Cir. Aug. 29, 2022) (“YC Rubber”), was decided after the briefing on the Remand
Redetermination was completed and potentially affects dumping margins in
proceedings such as this one. In the review at issue here, Commerce assigned the rate
of 11.87% to the reviewed, but unexamined, separate rate respondents even though it
determined that rate based on the dumping margin of only one individually examined
(continued . . .)
Consol. Court No. 18-00099 Page 31
3. Adjustment of the 105.31% Rate for Domestic and Export Subsidies
Plaintiffs claimed that Commerce was required by 19 U.S.C. § 1677f-1(f)(1) to
make a countervailing duty “double counting” adjustment to the rate applied to GTC to
account for domestic subsidies determined in parallel countervailing duty proceedings.
GTC’s Br. 54 (citing Certain New Pneumatic Off-the-Road Tires From the People’s Republic of
China: Final Results of Countervailing Duty Administrative Review; 2015, 83 Fed. Reg.
16,055 (Int’l Trade Admin. Apr. 13, 2018) (revised by Certain New Pneumatic Off-the-Road
Tires From the People’s Republic of China: Amended Final Results of Countervailing Duty
Administrative Review; 2015, 83 Fed. Reg. 32,078 (Int’l Trade Admin. July 11, 2018)).
They also claimed that Commerce failed to adjust the antidumping duty cash deposit
rate for export subsidies, as required by 19 U.S.C. § 1677a(c)(1)(C). Id. For the Final
Results, Commerce refused to make these adjustments, reasoning that “Commerce
continues to find GTC to be ineligible for a separate rate for purposes of these final
results and, thus, is treating GTC as part of the China-wide entity.” Final I&D Mem.
(and separate rate) respondent, Weihai Zhongwei Rubber Co., Ltd. That method was
held to be impermissible in YC Rubber. But because the court is ruling in this case that
Guizhou Tyre Co., Ltd. and Guizhou Tyre Import and Export Co., Ltd. (collectively,
“GTC”) are ineligible to be assigned an individually-determined margin or a separate
rate due to their failure to rebut the presumption of government control, these plaintiffs
could not benefit from a redetermined rate for the unexamined separate rate
respondents and, therefore, would lack standing to claim that the agency’s failure to
select GTC as an additional respondent for individual examination was unlawful under
the holding of YC Rubber. Neither of the two unexamined separate rate respondents
assigned the 11.87% rate, who potentially would have had standing to make such a
claim, are plaintiffs in this case.
Consol. Court No. 18-00099 Page 32
at 24. Commerce concluded that “because the China-wide entity is not under review,
and the China-wide rate currently in effect is not subject to change, no adjustments for
domestic and export subsidies are appropriate.” Id.
Commerce did not err in refusing to make an adjustment under 19 U.S.C.
§ 1677f-1(f)(1). That provision requires Commerce, in defined circumstances, to “reduce
the antidumping duty by the amount of the increase in the weighted average dumping
margin” that was caused by a countervailable domestic subsidy. 19 U.S.C.
§ 1677f-1(f)(1). Any adjustment is conditioned on the ability of Commerce to
“reasonably estimate the extent to which the countervailable subsidy . . . in combination
with the use of normal value determined pursuant to section 1677b(c) of this title, has
increased the weighted average dumping margin for the class or kind of merchandise.”
Id. § 1677f-1(f)(1)(C).
The 105.31% rate is considered to be an individually investigated weighted
average dumping margin according to the holding in CMA, 1 F.4th at 1037. Regardless,
that rate is not individual to GTC but is the rate assigned to the PRC-wide entity, which
was not under review, as Commerce recognized in denying the adjustment. Therefore,
Commerce was not required to make any adjustment to that rate under 19 U.S.C.
§ 1677f-1(f)(1).
For the same reason, Commerce did not err in declining to make an adjustment
for export subsidies according to 19 U.S.C. § 1677a(c)(1)(C). Under that provision,
Consol. Court No. 18-00099 Page 33
Commerce must increase the price used to establish export price or constructed export
price by the amount of any countervailing duty imposed on the subject merchandise to
offset an export subsidy. Like an adjustment under 19 U.S.C. § 1677f-1(f)(1), this
adjustment is made in determining a respondent’s individual weighted average
dumping margin. Commerce was not required to make this adjustment to the rate
applied to the PRC-wide entity, which was not under review.
III. CONCLUSION
For the reasons stated in the foregoing, the court concludes that Commerce
permissibly determined in the Remand Redetermination that GTC did not rebut the
Department’s presumption of government control of its export functions and, therefore,
did not qualify for a separate rate. The court concludes, further, that in the Remand
Redetermination Commerce permissibly assigned to GTC the PRC-wide entity rate of
105.31%. For these reasons, the court will enter judgment sustaining the Remand
Redetermination.
/s/ Timothy C. Stanceu
Timothy C. Stanceu
Judge
Dated: May 22, 2023
New York, New York