1:17-cv-00022•T.B. Wood's Incorporated v. United States
Testo completo
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U.S. International Trade Commission COMMISSIONERS Irving A. Williamson, Chairman David S. Johanson, Vice Chairman Dean A. Pinkert Meredith M. Broadbent F. Scott Kieff Rhonda K. Schmidtlein Catherine DeFilippo Staff assigned Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 Director of Operations Mary Messer, Investigator Amelia Shister, Investigative Intern Andrew David, Industry Analyst Dan Kim, Industry Analyst Cindy Cohen, Economist Charles Yost, Accountant Russell Duncan, Statistician Mary Jane Alves, Attorney Brian Soiset, Attorney Douglas Corkran, Supervisory Investigator Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 2 of 218
U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Publication 4652 December 2016 Certain Iron Mechanical Transfer Drive Components from Canada and China Investigation Nos. 701-TA-550 and 731-TA-1304-1305 (Final) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 3 of 218
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CONTENTS Page i
Determinations.......................................................................................................................1 ViewsoftheCommission........................................................................................................3 PartI:Introduction................................................................................................................IͲ1 Background................................................................................................................................IͲ1 Statutorycriteriaandorganizationofthereport.....................................................................IͲ2 Statutorycriteria...................................................................................................................IͲ2 Organizationofreport...........................................................................................................IͲ3 Marketsummary.......................................................................................................................IͲ3 Summarydataanddatasources...............................................................................................IͲ5 Previousandrelatedinvestigations..........................................................................................IͲ6 NatureandextentofsubsidiesandsalesatLTFV....................................................................IͲ6 Subsidies................................................................................................................................IͲ6 SalesatLTFV........................................................................................................................IͲ10 Thesubjectmerchandise........................................................................................................IͲ12 Commerce’sscope..............................................................................................................IͲ12 Tarifftreatment...................................................................................................................IͲ16 Theproduct.............................................................................................................................IͲ17 Descriptionandapplications...............................................................................................IͲ17 Manufacturingprocesses....................................................................................................IͲ31 Domesticlikeproductissues...................................................................................................IͲ38 Summaryoffindingsfrompreliminaryphase.....................................................................IͲ38 Partyarguments..................................................................................................................IͲ40 PartII:ConditionsofcompetitionintheU.S.market............................................................IIͲ1 U.S.marketcharacteristics.......................................................................................................IIͲ1 U.S.purchasers.........................................................................................................................IIͲ1 Channelsofdistribution...........................................................................................................IIͲ2 Geographicdistribution...........................................................................................................IIͲ3 Supplyanddemandconsiderations.........................................................................................IIͲ4 U.S.supply............................................................................................................................IIͲ4 U.S.demand.........................................................................................................................IIͲ7 Substitutabilityissues.............................................................................................................IIͲ10 Leadtimes..........................................................................................................................IIͲ10 Knowledgeofcountrysources...........................................................................................IIͲ10 Factorsaffectingpurchasingdecisions...............................................................................IIͲ11 Comparisonsofdomesticproducts,subjectimports,andnonsubjectimports................IIͲ14 ComparisonofU.S.ͲproducedandimportedlargeͲdiameterIMTDCs...............................IIͲ16 Elasticityestimates.................................................................................................................IIͲ18 U.S.supplyelasticity...........................................................................................................IIͲ18 U.S.demandelasticity........................................................................................................IIͲ18 Substitutionelasticity.........................................................................................................IIͲ19
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CONTENTS Page ii
PartIII:U.S.producers’production,shipments,andemployment.......................................IIIͲ1 U.S.producers.........................................................................................................................IIIͲ1 Relatedand/oraffiliatedfirms............................................................................................IIIͲ3 Changesinoperations.........................................................................................................IIIͲ4 ProductionͲrelatedactivities...................................................................................................IIIͲ4 Capitalinvestments.............................................................................................................IIIͲ5 Technicalexpertise..............................................................................................................IIIͲ5 Valueadded.........................................................................................................................IIIͲ6 Employmentlevels..............................................................................................................IIIͲ6 Sourcingofparts..................................................................................................................IIIͲ7 Othercostsandactivities....................................................................................................IIIͲ7 U.S.production,capacity,andcapacityutilization.................................................................IIIͲ8 Alternativeproducts............................................................................................................IIIͲ8 U.S.producers’U.S.shipmentsandexports...........................................................................IIIͲ9 TotalU.S.shipmentsofIMTDCs..........................................................................................IIIͲ9 FinishedIMTDCs................................................................................................................IIIͲ10 UnfinishedIMTDCs(notfurtherfinishedbyfirmintheUnitedStates)...........................IIIͲ11 U.S.producers’inventories...................................................................................................IIIͲ11 U.S.producers’imports.........................................................................................................IIIͲ11 U.S.employment,wages,andproductivity..........................................................................IIIͲ12 PartIV:U.S.imports,apparentU.S.consumption,andmarketshares................................IVͲ1 U.S.importers..........................................................................................................................IVͲ1 U.S.imports.............................................................................................................................IVͲ3 U.S.importsfromsubjectandnonsubjectsources............................................................IVͲ3 Negligibleimports...............................................................................................................IVͲ9 Cumulation........................................................................................................................IVͲ10 ApparentU.S.consumptionandmarketshares...................................................................IVͲ12 ApparentU.S.consumption..............................................................................................IVͲ12 U.S.marketshares.............................................................................................................IVͲ13
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CONTENTS Page iii
PartV:Pricingdata...............................................................................................................VͲ1 Factorsaffectingprices............................................................................................................VͲ1 Rawmaterialandenergycosts............................................................................................VͲ1 TransportationcoststotheU.S.market..............................................................................VͲ3 U.S.inlandtransportationcosts...........................................................................................VͲ3 Pricingpractices.......................................................................................................................VͲ3 Pricingmethods....................................................................................................................VͲ3 Salestermsanddiscounts....................................................................................................VͲ5 Priceleadership....................................................................................................................VͲ5 Pricedata..................................................................................................................................VͲ6 Pricetrends...........................................................................................................................VͲ9 Pricecomparisons..............................................................................................................VͲ10 Lostsalesandlostrevenue....................................................................................................VͲ11 PartVI:FinancialexperienceofU.S.producers....................................................................VIͲ1 Background..............................................................................................................................VIͲ1 OperationsonIMTDCs............................................................................................................VIͲ1 Netsales..............................................................................................................................VIͲ3 Costsandexpenses.............................................................................................................VIͲ3 Profitability..........................................................................................................................VIͲ3 Varianceanalysis.................................................................................................................VIͲ4 Capitalexpendituresandresearchanddevelopmentexpenses............................................VIͲ5 Assetsandreturnoninvestment............................................................................................VIͲ5 Capitalandinvestment...........................................................................................................VIͲ6
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CONTENTS Page iv
PartVII:Threatconsiderationsandinformationonnonsubjectcountries..........................VIIͲ1 TheindustryinCanada...........................................................................................................VIIͲ3 Overview.............................................................................................................................VIIͲ3 Changesinoperations........................................................................................................VIIͲ4 OperationsonIMTDCs.......................................................................................................VIIͲ4 Alternativeproducts...........................................................................................................VIIͲ5 Exports................................................................................................................................VIIͲ5 TheindustryinChina..............................................................................................................VIIͲ7 Overview.............................................................................................................................VIIͲ7 Changesinoperations........................................................................................................VIIͲ8 OperationsonIMTDCs.......................................................................................................VIIͲ8 Alternativeproducts...........................................................................................................VIIͲ9 Exports................................................................................................................................VIIͲ9 Thecombinedsubjectindustries.........................................................................................VIIͲ11 U.S.importers’inventories..................................................................................................VIIͲ12 U.S.importers’currentorders.............................................................................................VIIͲ13 DumpinginthirdͲcountrymarkets.......................................................................................VIIͲ13 Informationonnonsubjectcountries..................................................................................VIIͲ13 Mexico..............................................................................................................................VIIͲ15 EuropeanUnion................................................................................................................VIIͲ16
Appendixes A.FederalRegisternotices................................................................................................. AͲ1 B.Hearingwitnesses........................................................................................................... BͲ1 C. Summarydata................................................................................................................ CͲ1 D.Nonsubjectcountrypricedata....................................................................................... DͲ1 E. SelectedfinancialresultsofU.S.producers................................................................... EͲ1 F. AllegedeffectsofsubjectimportsonU.S.producers’existingdevelopmentand productionefforts,growth,investment,andabilitytoraisecapital............................. FͲ1
Note.—Informationthatwouldrevealconfidentialoperationsofindividualconcernsmaynot bepublishedandthereforehasbeendeletedfromthisreport.Suchdeletionsareindicatedby asterisks.
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UNITEDSTATESINTERNATIONALTRADECOMMISSIONInvestigationNos.701ͲTAͲ550and731ͲTAͲ1304Ͳ1305(Final) CertainIronMechanicalTransferDriveComponentsfromCanadaandChina
DETERMINATIONS
Onthebasisoftherecord1 developedinthesubjectinvestigations,theUnitedStates InternationalTradeCommission(“Commission”)determines,pursuanttotheTariffActof1930 (“theAct”),thatanindustryintheUnitedStatesisnotmateriallyinjuredorthreatenedwith materialinjury,andtheestablishmentofanindustryintheUnitedStatesisnotmaterially retardedbyreasonofimportsofcertainironmechanicaltransferdrivecomponentsfrom CanadaandChina,providedforinsubheadings8483.30.80,8483.50.60,8483.50.90, 8483.90.30,and8483.90.80oftheHarmonizedTariffScheduleoftheUnitedStates,2 thathave beenfoundbytheDepartmentofCommerce(“Commerce”)tobesoldintheUnitedStatesat lessthanfairvalue(“LTFV”),andthathavebeenfoundbyCommercetobesubsidizedbythe governmentofChina. 3
BACKGROUND
TheCommission,pursuanttosections705(b)and735(b)oftheAct(19U.S.C.1671d(b) and19U.S.C.1673d(b)),institutedtheseinvestigationseffectiveOctober28,2015,following receiptofpetitionsfiledwiththeCommissionandCommercebyTBWood’sIncorporated, Chambersburg,Pennsylvania.Thefinalphaseoftheinvestigationswasscheduledbythe CommissionfollowingnotificationofpreliminarydeterminationsbyCommercethatimportsof certainironmechanicaltransferdrivecomponentsfromChinaweresubsidizedwithinthe meaningofsection703(b)oftheAct(19U.S.C.1671b(b))andimportsofcertainiron mechanicaltransferdrivecomponentsfromCanadaandChinaweredumpedwithinthe meaningof733(b)oftheAct(19U.S.C.1673b(b)).Noticeoftheschedulingofthefinalphaseof theCommission’sinvestigationsandofapublichearingtobeheldinconnectiontherewithwas givenbypostingcopiesofthenoticeintheOfficeoftheSecretary,U.S.InternationalTrade Commission,Washington,DC,andbypublishingthenoticeintheFederalRegisteronJune24, 2016(81FR41348).ThehearingwasheldinWashington,DC,onOctober18,2016,andall personswhorequestedtheopportunitywerepermittedtoappearinpersonorbycounsel.
1 Therecordisdefinedinsec.207.2(f)oftheCommission’sRulesofPracticeandProcedure (19CFR207.2(f)). 2 CoveredmerchandisemayalsoenterunderthefollowingHTSUSsubheadings:7325.10.00, 7325.99.10,7326.19.00,8431.31.00,8431.39.00,and8483.50.40. 3 AllsixCommissionersvotedinthenegative. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 9 of 218
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3ViewsoftheCommission
Basedontherecordinthefinalphaseoftheseinvestigations,wedeterminethatan industryintheUnitedStatesisnotmateriallyinjuredorthreatenedwithmaterialinjuryby reasonofimportsofcertainlargeͲdiameterironmechanicaltransferdrivecomponents (“IMTDCs”)fromCanadaandChinafoundbytheU.S.DepartmentofCommerce (“Commerce”)tobesoldintheUnitedStatesatlessthanfairvalueandsubsidizedbythe governmentofChina.
I. Background
A. FirmsInvolvedinInvestigations
TBWood’sIncorporated(“TBW”or“petitioner”),aU.S.producerofIMTDCs,filed theantidumpingandcountervailingdutypetitionsintheseinvestigationson October28,2015. 1Petitionerappearedatthehearingwithcounselandsubmitted prehearingandposthearingbriefs.BaldorElectricCompany(“Baldor”),aU.S.producerof certainfinishedIMTDCs,submittedaprehearingstatementinsupportofthepetitions. 2 MartinSprocket&Gear,Inc.(“MartinSprocket”),aU.S.producerofIMTDCs,alsosubmitted awrittenstatementsupportingthepetitions. Severalrespondententitiesparticipatinginthefinalphaseoftheseinvestigations formedacoalition,theChinaChamberofInternationalCommerceadhocCoalitionof ProducersandExportersofCertainIronMechanicalTransferDriveComponentsfromthe People’sRepublicofChina.Thecoalition’smembersincludedPowermachImport& ExportCo.,Ltd.(Sichuan)(“Powermach”),ShijiazhuangCAPTPowerTransmissionCo.,Ltd. (“ShijiazhuangCAPT”),andYueqingBethelShaftCollarManufacturingCo.,Ltd.(“Bethel”), eachaproducerandexporterofsubjectmerchandise(collectively,“ChineseRespondents”). ChineseRespondentswererepresentedbycounselatthehearingandsubmitted prehearingandposthearingbriefs.
1ConfidentialReport,MemorandumINVͲOOͲ103(Nov.8,2016)(“CR”)atIͲI;PublicReport, IronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550and731Ͳ TAͲ1304to1305(Final),USITCPub.4652(Dec.2016)(“PR”)atIͲ1.TBWisalsoanimporterof***. CR/PRatTableIIIͲ17,TableIVͲ1. 2Duringthepreliminaryphaseoftheseinvestigations,Baldoranditsaffiliate,BaldorElectric CompanyCanada(“BaldorCanada”),amanufacturer/exporteroffinishedIMTDCsinCanada, participatedinthestaffconferencewithcounselandsubmittedapostconferencebriefopposingthe petitions.BaldorCanadacloseditsSt.Claire,QuebecIMTDCproductionfacilityonMay27,2016 andrelocateditsfinishingequipmentfromCanadatoitsfacilitiesinNorthCarolina.CRatIͲ5toIͲ6; PRatIͲ4.BaldoralsohadanaffiliatethatproducedIMTDCsinChina,MaskaPowerTransmission (Changzhou)Co.Ltd.(“BaldorMaska”),butBaldorpermanentlyclosedthisaffiliateinDecember 2014anddisposedofitsequipment.CRatIͲ6n.17,VIIͲ13;PRatIͲ5n.17,VIIͲ8;Transcriptof November19,2015StaffConference(“Confer.Tr.”)at22(McCartney). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 11 of 218
4B. BackgroundonDataCollectionandDataCoverage
TheOctober28,2015petitionsincludedfiveparagraphsdescribingtheparameters oftherequestedscopeofimportedsubjectmerchandiseandasixthparagraphidentifying correspondingU.S.HarmonizedTariffSchedule(“HTSUS”)statisticalreportingnumbersfor therequestedcoveredproducts. 3Subsequenttofilingthepetitions,attherequestof Commerceandotherparties,petitionersubmittedaseriesofrequeststoamendthescope language.4Asaresult,thefiveͲparagraphscopeinthepetitionseventuallyexpandedto12 paragraphsandatable,collectivelyconsistingofmorethanthreesingleͲspacedpages. 5As discussedinmoredetailbelow,theCommission’sstaffcontinuedtoworkwith questionnairerespondentstoreviseandrefinetheirdatainaccordancewiththeadditional scopechangesandtoremovequestionnaireresponsesfromthedatasetthatdidnotmeet theparametersoftherevisedscopeorthecorrespondingdomesticlikeproductdefinition. 6 Thus,similartothefindinginourpreliminarydeterminations, 7multiplerevisionstothe scopeoftheseinvestigationsresultedinchallengesintheCommission’scollectionand analysisoftherelevantdata.8 Asexplainedbelow,theCommissioninvestigatednotonlythefirmsidentifiedinthe petitionsbutalsootherpossibledomesticproducers,importers,andforeignproducers.A numberofthesefirms,includingfirmsidentifiedinthepetitions,reportedthattheydonot produceorimporttheIMDTCsatissueintheseinvestigations,andanumberofthese domesticproducers,importers,andforeignproducersdidnotrespondtoourdatarequests. Althoughpetitionercontendsthatthe“failureofnumerousrespondentstocomplywiththe Commission’sinvestigationsmeritstheapplicationofadversefactsavailable,”9we determinethatapplicationofadversefactsavailableunder19U.S.C.§1677e(b)is
3Petitions,vol.Iat5Ͳ6. 4SeegenerallyPetitioner’sPosthearingBriefatExhibit1at2Ͳ12;TranscriptofCommission’s October18,2016Hearing(“HearingTr.”)at46Ͳ48,64Ͳ67(Pickard,DeFrancesco). 5Compare,e.g.,81Fed.Reg.75,032(Oct.28,2016)(finaldeterminations)with,e.g.,81Fed. Reg.36,876(June8,2016)(preliminarydeterminations). 6Despitethenumerouschangestothescopelanguage,ChineseRespondentscontendthat theCommission’sdata“intheend{are}prettygood”andthey“don’tidentifyanyhugedataissues relatedtoscopeinthisfinalphase.”HearingTr.at11,118Ͳ119(Grimson)(alsonotingthat,inthe finalphaseoftheseinvestigations,thedataproblems“areprettywelladdressedandresolved”). Petitioneragreesthattherearenomeaningfuldataconcernsstemmingfromthesescope modifications,giventhat“almostalloftherequestedamendmentstothescope”occurredbefore thequestionnairesforthefinalphaseoftheseinvestigationswereissued.Petitioner’sPosthearing Briefat2;seealsoid.atExhibit1at9(assertingthat“allpartiesagreethatthesechangeshavehad nomaterialeffectsonthedataobtainedforthefinalphaseofthisinvestigation”). 7ConfidentialPreliminaryViews,EDISDoc.571266;USITCPub.4587at36. 8Compare,e.g.,CR/PRatTableCͲ1(posthearingreport)with,e.g.,MemorandumINVͲOOͲ 089(Oct.4,2016)atTableCͲ1(prehearingreport)andMemorandumINVͲNNͲ089(Dec.7,2015)at TableCͲ1(reportinpreliminaryphaseoftheseinvestigations). 9Petitioner’sPrehearingBriefat44;HearingTr.at51Ͳ52(Pickard). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 12 of 218
5inappropriateintheseinvestigations.ThisprovisionprovidesthattheCommission“may useaninferencethatisadversetotheinterestsof{apartythathasfailedtocooperate,to thebestofitsability,withtheCommission’srequestforinformation}inselectingfrom amongthefactsotherwiseavailable.10Here,althoughcertainquestionnairerecipients failedtorespondtotheCommission’squestionnaires,whichisnotuncommonin Commissioninvestigations,manyotherrecipientsdidfullycomplywiththeCommission’s requestsforinformation.Thus,iftheCommissionweretotakeanadverseinferenceas petitioneradvocatesintheseinvestigations,itwouldnotsolelybeagainstthose questionnairerecipientsthatfailedtorespondtotheCommission’srequestsbutalso againstthosethatdidrespond.Moreover,petitionerdidnotidentify,andwecouldnot otherwisediscern,alternativefactsavailableonthisrecordonwhichtheCommissioncould baseitsdetermination.Wealsonotethatthedetaileddescriptionoftheproductatissuein theseinvestigationsandthelackofanypubliclyavailableinformationonthisrecordspecific toIMTDCmarketparticipantscomplicatedourassessmentofquestionnairecoveragefor thedomesticindustry,importsfromsubjectandnonsubjectsources,andthesubject industriesinCanadaandChina.Forthesereasonsandthosediscussedinmoredetail below, 11wehavereliedoninformationavailable,whichincludesinformationsubmittedand obtainedinthepreliminaryandfinalphasesoftheseinvestigations,includingquestionnaire responsesfromrespondingdomesticproducers,purchasers,importers,andforeign producersofsubjectmerchandise.
II. DomesticLikeProduct
A. InGeneral
IndeterminingwhetheranindustryintheUnitedStatesismateriallyinjuredor threatenedwithmaterialinjurybyreasonofimportsofsubjectmerchandise,the Commissionfirstdefinesthe“domesticlikeproduct”andthe“industry.” 12Section 771(4)(A)oftheTariffActof1930,asamended(“theTariffAct”),definestherelevant domesticindustryasthe“producersasawholeofadomesticlikeproduct,orthose producerswhosecollectiveoutputofadomesticlikeproductconstitutesamajor proportionofthetotaldomesticproductionoftheproduct.” 13Inturn,theTariffActdefines
1019U.S.C.§1677e(b).Thestatutegoesontolistpotentialsourcesofinformationonwhich theCommissionmaybaseitsadverseinference,includingthepetition,apriorfinaldeterminationor reviewdetermination,oranyotherinformationplacedontherecord.Id. 11Weprovideadditionaldetailsaboutthescopeamendmentsinthedomesticlikeproduct discussionbelow.Weprovideadditionalexplanationsconcerningthedevelopmentandrefinement ofthevariousdatasetsinourrespectivediscussionsofnegligibleimportsinsectionIV(imports), supplyinsectionVI.B.2(domesticandsubjectindustries),andthreatinsectionVII(subject industries). 1219U.S.C.§1677(4)(A). 1319U.S.C.§1677(4)(A). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 13 of 218
6“domesticlikeproduct”as“aproductwhichislike,orintheabsenceoflike,mostsimilarin characteristicsanduseswith,thearticlesubjecttoaninvestigation.” 14 Thedecisionregardingtheappropriatedomesticlikeproductinaninvestigationisa factualdetermination,andtheCommissionhasappliedthestatutorystandardof“like”or “mostsimilarincharacteristicsanduses”onacaseͲbyͲcasebasis. 15Nosinglefactoris dispositive,andtheCommissionmayconsiderotherfactorsitdeemsrelevantbasedonthe factsofaparticularinvestigation. 16TheCommissionlooksforcleardividinglinesamong possiblelikeproductsanddisregardsminorvariations. 17AlthoughtheCommissionmust acceptCommerce’sdeterminationastothescopeoftheimportedmerchandisethatis subsidizedorsoldatlessthanfairvalue,18theCommissiondetermineswhatdomestic productisliketheimportedarticlesCommercehasidentified. 19
1419U.S.C.§1677(10). 15See,e.g.,CleoInc.v.UnitedStates,501F.3d1291,1299(Fed.Cir.2007);NECCorp.v. DepartmentofCommerce,36F.Supp.2d380,383(Ct.Int’lTrade1998);NipponSteelCorp.v.United States,19CIT450,455(1995);TorringtonCo.v.UnitedStates,747F.Supp.744,749n.3(Ct.Int’l Trade1990),aff’d,938F.2d1278(Fed.Cir.1991)(“everylikeproductdetermination‘mustbemade ontheparticularrecordatissue’andthe‘uniquefactsofeachcase’”).TheCommissiongenerally considersanumberoffactors,includingthefollowing:(1)physicalcharacteristicsanduses;(2) interchangeability;(3)channelsofdistribution;(4)customerandproducerperceptionsofthe products;(5)commonmanufacturingfacilities,productionprocesses,andproductionemployees; and,whereappropriate,(6)price.SeeNippon,19CITat455n.4;TimkenCo.v.UnitedStates,913F. Supp.580,584(Ct.Int’lTrade1996). 16See,e.g.,S.Rep.No.96Ͳ249at90Ͳ91(1979). 17Nippon,19CITat455;Torrington,747F.Supp.at748Ͳ49;seealsoS.Rep.No.96Ͳ249at 90Ͳ91(Congresshasindicatedthatthelikeproductstandardshouldnotbeinterpretedin“sucha narrowfashionastopermitminordifferencesinphysicalcharacteristicsorusestoleadtothe conclusionthattheproductandarticlearenot‘like’eachother,norshouldthedefinitionof‘like product’beinterpretedinsuchafashionastopreventconsiderationofanindustryadversely affectedbytheimportsunderconsideration.”). 18See,e.g.,USEC,Inc.v.UnitedStates,34Fed.Appx.725,730(Fed.Cir.2002)(“TheITCmay notmodifytheclassorkindofimportedmerchandiseexaminedbyCommerce.”);AlgomaSteel Corp.v.UnitedStates,688F.Supp.639,644(Ct.Int’lTrade1988),aff’d,865F.3d240(Fed.Cir.), cert.denied,492U.S.919(1989). 19HosidenCorp.v.AdvancedDisplayMfrs.,85F.3d1561,1568(Fed.Cir.1996)(the Commissionmayfindasinglelikeproductcorrespondingtoseveraldifferentclassesorkinds definedbyCommerce);Cleo,501F.3dat1298n.1(“Commerce’s{scope}findingdoesnotcontrol theCommission’s{likeproduct}determination.”);Torrington,747F.Supp.at748Ͳ52(affirmingthe Commission’sdeterminationdefiningsixlikeproductsininvestigationsinwhichCommercefound fiveclassesorkinds). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 14 of 218
7B. EvolutionoftheScopeofSubjectMerchandiseandImpactonData Collection
IntheOctober28,2015petitions,TBWproposedascopeofimportedsubject merchandiseconsistingoffiveparagraphsdescribingtheparametersoftherequested coveredproductsandasixthparagraphidentifyingthecorrespondingHTSUSstatistical reportingnumbers.20Duringthepreliminaryphaseoftheinvestigations,petitioner requestedtwoamendmentstothescopepriortoCommerce’sdecisionwhethertoinitiate theinvestigations.OnNovember5,2015,TBW,“{u}ponfurtherconsiderationofthisissue,” proposedchangingthedimensionelementofthescopetospecifythatthemerchandise subjecttotheinvestigationsconsistsof“thosenotlessthan4.0inches(101mm)in maximumnominaloutsidediameter.” 21OnNovember17,2015,thedeadlinefor Commerce’sdecisiononwhethertoinitiatetheinvestigationsortoextendthedeadlinefor initiationinordertopollorotherwisedetermineindustrysupportforthepetitions,TBW proposedrevisingthecoveredproductsfromthosewithacarboncontentof1.5percentby weightorabovetothosewithacarboncontentof1.7percentbyweightorabove. 22Inits November18,2015announcementoftheinitiationoftheinvestigations,Commerce effectuatedpetitioner’srequestedamendmentstothescopeofimportedsubject merchandiseastobothcarboncontentanddiameterdimension. 23 OnNovember18,2015,inviewofCommerce’sannouncement,Commissionstaff requestedthatquestionnairerespondentsrevisetheirquestionnairedatatoconformtothe newscopelanguage,andtheyissuedadditionalquestionnairestofirmsthathadbeen identifiedintheinterveningtimeaspossibleU.S.marketparticipantsthathadnotbeen namedinthepetitions. 24Becausethedeadlineforrespondingtotheseinformation requestswasNovember23,2015,thepartiesbasedtheirargumentsduringthe Commission’sstaffconferenceandintheirNovember23,2015postconferencebriefson questionnairedatathathadnotyetbeenrevisedtoreflecttheinterveningscopedefinition changes.25InitsDecember21,2015PreliminaryViews,theCommissionobservedthat “muchoftheusableinformationavailableatthetimeofthepreliminarydeterminations consistedofinformationrevisedbyquestionnairerespondentsorcollectedbythe
20Petitions,vol.Iat5Ͳ6. 21Petitioner’sNovember5,2015AmendedPetitionsat4Ͳ5. 22Petitioner’sNovember17,2015AmendedPetitionsat1Ͳ2andAttachment. 23USITCPub.4587at4Ͳ6;ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ7;80Fed. Reg.73,716,73,721Ͳ22(Nov.25,2015);80Fed.Reg.73,722,73,725Ͳ26(Nov.25,2015). 24CommissionstaffaskedrespondingU.S.producers,importers,andforeignproducersto revisetheirquestionnairedata,whichhadbeencollectedbasedonthescopedefinitionrequested inthepetitions.CommissionstaffalsoissuedadditionalU.S.producerquestionnairestofirms (sevenpossibleproducersofunfinishedIMTDCsandpossibleproducersoffinishedIMTDCs)that hadbeenidentifiedintheinterveningtimeaspossibleadditionalU.S.producersnotnamedinthe petitions.USITCPub.4587at3,4,6&n.17;ConfidentialPreliminaryViews,EDISDoc.571266at4, 7Ͳ8&n.17. 25USITCPub.4587at5Ͳ6;ConfidentialPreliminaryViews,EDISDoc.571266at6Ͳ8. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 15 of 218
8CommissioninthefifteenbusinessdaysbetweenCommerce’sNovember18,2015 announcementoftherevisedscopeandtheCommission’sFriday,December11,2015 vote.” 26 Petitionersubmittedanotherrequesttoamendthescopeoftheinvestigationson March30,2016, 27whichCommerceeffectuatedinitsJune8,2016preliminary determinationsbyaddingfourparagraphsandatablethatcollectivelyservedtoexclude fromthescopecertainfinishedtorsionalvibrationdampers(“TVDs”);certainlightͲduty fixedͲpitch,nonͲsynchronoussheaves;certainlightͲduty,variableͲpitch,nonͲsynchronous sheaves;andcertainIMTDCbushings. 28OnJune17,2016,followingCommerce’s preliminarydeterminations,theCommissionissuedtothepartiesfortheirreviewand commentsdraftquestionnairesthatwouldbeusedtocollectdataforthefinalphaseof theseinvestigations. 29AfterconsideringtheJune24,2016commentsreceivedfrom petitioner,30theCommissionissuedthequestionnairesonJuly18,2016andrequested responsesbyAugust18,2016. 31TBWsoughtfurtheramendmentsandclarificationstothe scopelanguagefromCommerceonJune27,2016,August4,2016,August17,2016,and August22,2016. 32Commerce’sfinaldeterminationsaddedlanguageexcludingcertain flywheelswithringgearandcertainTVDinnerringsfromtheinvestigations’scope. 33 Initsfinaldeterminations,Commercedefinedthescopeoftheimported merchandiseunderinvestigationasfollows:
ironmechanicaltransferdrivecomponents,whetherfinishedorunfinished(i.e., blanksorcastings).Subjectironmechanicaltransferdrivecomponentsareintheformof wheelsorcylinderswithacenterboreholethatmayhaveoneormoregroovesorteethin
26TheCommission’sstaffproducedaDecember7,2015reportthatcompiledthe informationobtainedduringtheinvestigations,includinganyinformationobtainedthatwas responsivetopetitioner’stwoscopeamendmentsthatCommerceadopted.USITCPub.4587at6, 11;ConfidentialPreliminaryViews,EDISDoc.571266at8,56. 27CRatIͲ1;PRatIͲ1. 28Compare,e.g.,81Fed.Reg.36,876(June8,2016)(preliminarydeterminations)with,e.g., 80Fed.Reg.73,716(Nov.25,2015)(initiation). 29DraftQuestionnairesforFinalPhaseoftheInvestigations,EDISDoc.584464. 30Petitioner’sCommentsonDraftQuestionnairesfortheFinalPhaseoftheInvestigations, EDISDoc.584552. 31BlankQuestionnairesfortheFinalPhaseoftheInvestigations,EDISDoc.588765(basedon thescopelanguageinCommerce’spreliminarydeterminations). 32CRatIͲ1;PRatIͲ1(identifyingthedatesonwhichpetitionersubmittedtheserequeststo Commerce,asreportedinCommerce’sfinaldeterminations). 33CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina: FinalAffirmativeDeterminationofSalesatLessThanFairValue,81Fed.Reg.75,032(Oct.28,2016); CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe People’sRepublicofChina:FinalAffirmativeDetermination,81Fed.Reg.75,037(Oct.28,2016); CertainIronMechanicalTransferDriveComponentsfromCanada:FinalAffirmativeDeterminationof SalesatLessThanFairValue,81Fed.Reg.75,039(Oct.28,2016). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 16 of 218
9theiroutercircumferencethatguideormeshwithaflatorribbedbeltorlikedeviceandare oftenreferredtoassheaves,pulleys,flywheels,flatpulleys,idlers,conveyerpulleys, synchronoussheaves,andtimingpulleys.Theproductscoveredbytheseinvestigationsalso includebushings,whichareironmechanicaltransferdrivecomponentsintheformofa cylinderandwhichfitintotheboreholesofothermechanicaltransferdrivecomponentsto lockthemintodriveshaftsbymeansofelementssuchasteeth,bolts,orscrews.
Ironmechanicaltransferdrivecomponentssubjecttotheseinvestigationsarethose notlessthan4.00inches(101mm)inthemaximumnominalouterdiameter.
Unfinishedironmechanicaltransferdrivecomponents(i.e.,blanksorcastings) possesstheapproximateshapeofthefinishedironmechanicaltransferdrivecomponent andhavenotyetbeenmachinedtofinalspecificationaftertheinitialcasting,forgingorlike operations.Thesemachiningprocessesmayincludecutting,punching,notching,boring, threading,mitering,orchamfering.
Subjectmerchandiseincludesironmechanicaltransferdrivecomponentsasdefined abovethathavebeenfinishedormachinedinathirdcountry,includingbutnotlimitedto finishing/machiningprocessessuchascutting,punching,notching,boring,threading, mitering,orchamfering,oranyotherprocessingthatwouldnototherwiseremovethe merchandisefromthescopeoftheinvestigationsifperformedinthecountryof manufactureoftheironmechanicaltransferdrivecomponents.
Subjectironmechanicaltransferdrivecomponentsarecoveredbythescopeofthe investigationsregardlessofwidth,design,orirontype(e.g.,gray,white,orductileiron). Subjectironmechanicaltransferdrivecomponentsarecoveredbythescopeofthe investigationsregardlessofwhethertheyhavenonͲironattachmentsorpartsandregardless ofwhethertheyareenteredwithothermechanicaltransferdrivecomponentsoraspartofa belteddriveassembly(whichtypicallyincludesoneormoreoftheironmechanicaltransfer drivecomponentsidentifiedabove,andwhichmayalsoincludeotherpartssuchasabelt, couplingand/orshaft).Whenenteredasamechanicaltransferdriveassembly,onlytheiron componentsthatmeetthephysicaldescriptionofcoveredmerchandisearecovered merchandise,nottheothercomponentsinthemechanicaltransferdriveassembly(e.g., belt,coupling,shaft).However,thescopeexcludesflywheelswitharinggearpermanently attachedontotheouterdiameter.Aringgearisasteelringwithconvexexternalteethcut ormachinedintotheouterdiameter,andwherethediameteroftheringexceeds200mm anddoesn’texceed2,244.3mm.
Forpurposesoftheseinvestigations,acoveredproductisof“iron”wherethearticle hasacarboncontentof1.7percentbyweightorabove,regardlessofthepresenceand amountofadditionalalloyingelements.
Excludedfromthescopearefinishedtorsionalvibrationdampers(TVDs).Afinished TVDisanenginecomponentcomposedofthreeseparatecomponents:aninnerring,a Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 17 of 218
10rubberring,andanouterring.Theinnerringisanironwheelorcylinderwithaboreholeto fitacrankshaftwhichformsasealtopreventleakageofoilfromtheengine.Therubber ringisadampeningmediumbetweentheinnerandouterringsthateffectivelyreducedthe torsionalvibration.Theouterring,whichmaybemadeofmaterialsotherthaniron,mayor maynothavegroovesinitsoutercircumference.ToconstituteafinishedexcludedTVD,the productmustbecomposedofeachofthethreepartsidentifiedaboveandthethreeparts mustbepermanentlyaffixedtotherubberring.AfinishedTVDisexcludedonlyifitmeets thephysicaldescriptionprovidedabove;merchandisethatotherwisemeetsthedescription ofthescopeanddoesnotsatisfythephysicaldescriptionofexcludedfinishedTVDsaboveis stillcoveredbythescopeoftheinvestigationsregardlessofenduseoridentificationasa TVD.
AlsoexcludedfromthescopearecertainTVDinnerrings.Toconstituteanexcluded TVDinnerring,theproductmusthaveeachofthefollowingcharacteristics:(1)asingle continuouscurveformingaprotrusionorindentationonoutersurface,alsoknownasasine lock,withaheightordepthnotlessthan1.5millimetersandnotexceeding4.0millimeters andwithawidthofatleast10millimetersasmeasuredacrossthesinelockfromoneedge ofthecurvetotheother;(2)afacewidthoftheotherdiameterofgreaterthanorequalto 20millimetersbutlessthanorequalto80millimeters;(3)anoutsidediametergreaterthan orequalto101millimetersbutlessthanorequalto300millimeters;and(4)aweightnot exceeding7kilograms.ATVDinnerringisexcludedonlyifitmeetsthephysicaldescription providedabove;merchandisethatotherwisemeetsthedescriptionofthescopeanddoes notsatisfythephysicaldescriptionofexcludedTVDinnerringsisstillcoveredbythescopeof thisinvestigationregardlessofenduseoridentificationasaTVDinnerring.
ThescopealsoexcludeslightͲduty,fixedͲpitch,nonͲsynchronoussheaves (“excludableLDFPNsheaves”)witheachofthefollowingcharacteristics:madefromgrey irondesignatedasASTM(NorthAmericanspecification)Grade30orlower,GB/T(Chinese specification)GradeHT200orlower,DIN(Germanspecification)GG20orlower,orEN (Europeanspecification)ENͲGJL200orlower;havingnomorethantwogrooves;havinga maximumfacewidthofnomorethan1.75inches,wherethefacewidthisthewidthofthe partatitsoutsidediameter;havingamaximumoutsidediameterofnotmorethan18.75 inches;andhavingnoteethontheoutsideordatumdiameter.ExcludableLDFPNsheaves mustalsoeitherhaveamaximumstraightboresizeof1.6875incheswithamaximumhub diameterof2.875inches;orelsehaveataperedboremeasuring1.625inchesatthelarge end,amaximumhubdiameterof3.50inches,alengththroughtaperedboreof1.0inches, exactlytwotappedholesthatare180degreesapart,anda2.0Ͳinchboltcircleonthefaceof thehub.ExcludableLDFPNsheavesmorethan6.75inchesinoutsidediametermustalso haveanarmorspokeconstruction.Further,excludableLDFPNsheavesmusthaveagroove profileasindicatedinthetablebelow:
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 18 of 218
11Size (belt profile) Outside Diameter Top Width Range of Each Groove Max. H e ight Angle MA/AK (A, 3L, 4L) < 5.45 in. 0.484 – 0.499 in. 0.531 in. 34o MA/AK (A, 3L, 4L) >5.45 in. but < 18.75 in. 0.499 – 0.509 in. 0.531 in. 38o MB/BK (A, B, 4L, 5L) < 7.40 in. 0.607 – 0.618 in. 0.632 in. 34o MB/BK (A, B, 4L, 5L) >7.40 in. but < 18.75 in. 0.620 – 0.631 in. 0.635 in. 38o
Inadditiontotheabovecharacteristics,excludableLDFPNsheavesmustalsohavea maximumweight(poundsͲperͲpiece)asfollows:forexcludableLDFPNsheaveswithone grooveandanoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto8.0 inches,themaximumweightis4.7pounds;forexcludableLDFPNsheaveswithtwogrooves andanoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto8.0inches,the maximumweightis8.5pounds;forexcludableLDFPNsheaveswithtwogroovesandan outsidediameterofgreaterthan8.0inchesbutlessthanorequalto12.0inches,the maximumweightis15.0pounds;forexcludableLDFPNsheaveswithonegrooveandan outsidediametergreaterthan12.0inchesbutlessthanorequalto15.0inches,the maximumweightis17.5pounds;forexcludableLDFPNsheaveswithonegrooveandan outsidediameterofgreaterthan15.0inchesbutlessthanorequalto18.75inches,the maximumweightis16.5pounds;andforexcludableLDFPNsheaveswithtwogroovesand anoutsidediameterofgreaterthan15.0inchesbutlessthanorequalto18.75inches,the maximumweightis26.5pounds.
ThescopealsoexcludeslightͲduty,variableͲpitch,nonͲsynchronoussheaveswith eachofthefollowingcharacteristics:madefromgreyirondesignatedasASTM(North Americanspecification)Grade30orlower,GB/T(Chinesespecification)GradeHT200or lower,DIN(Germanspecification)GG20orlower,orEN(Europeanspecification)ENͲGJL200 orlower;havingnomorethan2grooves;havingamaximumoverallwidthoflessthan2.25 incheswithasinglegroove,orof3.25inchesoflesswithtwogrooves;havingamaximum outsidediameterofnotmorethan7.5inches;havingamaximumboresizeof1.625inches; havingeitheroneortwoidentical,internallythreadedhub(i.e.,withthreadsontheoutside diameter)thatenable(s)thewidth(opening)ofthegroovetobechanged;andhavingno teethontheoutsideordatumdiameter.
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12ThescopealsoexcludescertainIMTDCbushings.AnIMTDCbushingisexcludedonly ifithasataperedangleofgreaterthanorequalto10degrees,wheretheangleismeasured betweenoneoutsidetaperedsurfaceandthedirectlyopposingoutsidetaperedsurface.34
IMTDCsareironcastingsintheshapeofwheelsorcylindersforuseinbelteddrive assembliesinfans,conveyers,compressors,pumps,andmixers.35CircularIMTDCsmaybe referredtoassheaves,pulleys,orflywheels,andcylindricalIMTDCs,whicharedesignedto attachtheshafttothecircularIMTDC,maybereferredtoasbushings. 36Regardlessofsize orshape,IMTDCsareconnectedwithbeltsandusedtotransferpowerfromashaft operatedbyamotororengine.37IMTDCsmaybeproducedinfinishedorunfinished (referredtoasblanksorcastings)form.38IMTDCsmaybemanufacturedinavarietyofsizes asmeasuredbytheouterdiameter.39
C. Analysis
Initspreliminarydeterminations,theCommissiondefinedasingledomesticlike productencompassingallformsoffinishedandunfinishedIMTDCsdescribedinthescope oftheinvestigations,aswellassmallͲdiameterIMTDCsunder4inchesinmaximumnominal outsidediameter.40Initspreliminarydeterminations,theCommissionfoundthatthe recorddidnotsupportdifferentiatingbetweensoͲcalledsmallͲandlargeͲdiameterIMTDCs, whichpetitionerarguedweredividedbyafourͲinchnominalouterdiameter.The Commissionfoundoverlapinthemanufacturingprocessesandemployeesusedtoproduce
34AsCommerceexplained,themerchandisecoveredbytheseinvestigationsiscurrently classifiableunderHTSUSstatisticalreportingnumbers8483.30.8090,8483.50.6000,8483.50.9040, 8483.50.9080,8483.90.3000,and8483.90.8080.Coveredmerchandisemayalsoenterunderthe followingHTSUSsubheadings:7325.10.0080,7325.99.1000,7326.19.0010,7326.19.0080, 8431.31.0040,8431.31.0060,8431.39.0010,8431.39.0050,8431.39.0070,8431.39.0080,and 8483.50.4000.81Fed.Reg.75,032;81Fed.Reg.75,037;81Fed.Reg.75,039(footnotesomitted). 35IMTDCshaveacenterboreholeforashafttobeinsertedandanoutercircumference, oftenwithavarietyofteethorgrooves,designedtomeshwithabelt.CRatIͲ20;PRatIͲ17toIͲ18. OutͲofͲscopenonͲironmechanicaltransferdevicecomponents(“nonͲironMTDCs”)areproduced fromothermaterials,includingaluminum,plastic,andsteel.CRatIͲ19n.29;PRatIͲ17n.29. 36CRatIͲ14;PRatIͲ12. 37CRatIͲ19;PRatIͲ17. 38UnfinishedIMTDCspossesstheapproximateformofanIMTDCwithoutbeingmachined intofinalspecificationsandhavethesolepurposeofbeingmanufacturedintoafinishedIMTDC.CR atIͲ30;PRatIͲ27. 39CRatIͲ21;PRatIͲ18. 40TheCommissionfoundthatfinishedandunfinishedIMTDCs,aswellassmallͲdiameter IMTDCs,shouldbeincludedinthesamedomesticlikeproduct,whilesteelMTDCsshouldnotbe includedinthedomesticlikeproduct.USITCPub.4587at11Ͳ19. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 20 of 218
13IMTDCsregardlessofdiameter,41andfurtherthatIMTDCsofalldiametershavesimilar physicalcharacteristicsandoverlapinendusesandarenotdifferentiatedintermsof producersorcustomers.42WhileIMTDCsofdifferentsizesnecessarilyhaveprice differencesandalackofsubstitutability,suchdifferencesapplytoallIMTDCsofdifferent sizesregardlessofthedividingline.Basedonanexaminationofthetraditionaldomestic likeproductfactors,theCommissionfoundthattherecordsupportedincluding smallͲdiameterIMTDCs,whichwereoutsidetheinvestigations’scope,inthesamedomestic likeproductasthelargeͲdiameterIMTDCscorrespondingtothescope.43 Inthefinalphaseoftheseinvestigations,theonlyaspectofthedomesticlike productdefinitionfromthepreliminarydeterminationschallengedbyanypartyisthe inclusionofsmallͲdiameterIMTDCsinthedomesticlikeproductdefinition,whichpetitioner continuestocontest. 44 AlthoughpetitionercontinuestoargueagainstincludingsmallͲdiameterIMTDCsin thedomesticlikeproduct,itsubmittednocommentsontheCommission’sdraft questionnairesregardingthedomesticlikeproductdefinition. 45Itfailedtodoso,despite theCommission’sreminderinitspreliminarydeterminationsthatpartieswouldneedto “identifyintheircommentsonthedraftquestionnairesforanyfinalphaseofthese investigationsanyargumentsthatwouldimplicatedatacollection,suchasrequeststo definethedomesticlikeproduct(s)inadifferentmanner,”asrequiredunderthe Commission’srules.46
41AstheCommissionobserved,TBWadmittedintheoriginalpetitionsthatitusescommon manufacturingfacilities,processes,andemployeestomanufactureallIMTDCsregardlessof diameter.USITCPub.4587at14(citing,e.g.,Petitions,vol.Iat20,21). 42USITCPub.4587at13Ͳ16. 43USITCPub.4587at13Ͳ16. 44Inthefinalphaseoftheseinvestigations,petitioneraskstheCommissiontodefinea singledomesticlikeproductcorrespondingtotheIMTDCsdescribedinthescopeofthe investigations,whichwouldincludefinishedandunfinishedIMTDCsinallforms(sheaves,bushings, andflywheels),butnotinclude(i)smallͲdiameterIMTDCsinsizeslessthan4inchesinnominalouter diameteror(ii)nonͲironMTDCs.WithrespecttosmallͲdiameterIMTDCs,petitionerarguesthatthe Commissionhaspreviouslyreliedondiametermeasurementstodefinedomesticlikeproductsin otherinvestigations,andwitnessesforthepetitionerclaimedthattherearedistinctproduction processesforsmallͲandlargeͲdiameterIMTDCs.Petitionernonethelessconcedesthattheinclusion ofsmallͲdiameterIMTDCsinthedomesticlikeproductwillnotimpacttheCommission’sanalysis. Petitioner’sPosthearingBriefatExhibit1at13Ͳ16;HearingTr.at35,72,135Ͳ136(Pickard); Petitioner’sPrehearingBriefat2Ͳ3,Exhibit1at1Ͳ12.ChineseRespondentscharacterizepetitioner’s proposed4ͲinchdividinglinebetweensmallͲandlargeͲdiameterIMTDCsasarbitrary.Theyargue thatregardlessofwhethertheCommissionincludessmallͲdiameterIMTDCsinthedomesticlike product,therecorddoesnotsupportaffirmativedeterminations.ChineseRespondents’ PosthearingBriefat2;HearingTr.at135Ͳ136(Grimson). 45Petitioner’sCommentsonDraftQuestionnaires(Jun.24,2016). 46USITCPub.4587at19n.99;ConfidentialPreliminaryViewsat28n.99(citing 19C.F.R.§207.20(b)). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 21 of 218
14WefindthattherecordcontinuestosupporttheCommission’sfindingsinits preliminarydeterminations. 47Petitioneroffersnonewevidenceorargumenttosupportits proposeddomesticlikeproductdefinition. 48Indeed,therecorddoesnotsupport petitioner’sargumentthatitsownproductionprocessesaredistinctforsmallͲandlargeͲ diameterIMTDCs. 49***.50Petitioneroffersnoevidencethat***arenotrepresentativeof otherproducersofIMTDCsorthatanyphysicaldistinctionsbetweensmallͲandlargeͲ diameterIMTDCsotherwisedictatedifferentproductionprocesses.Infact,otherdomestic producersthatcastand/orfinishIMTDCsintheUnitedStatesreportedthatthey manufacturesmallͲandlargeͲdiameterIMTDCsonthesameproductionequipment.51We
47See,e.g.,CRatIͲ19toIͲ46,IIͲ1,IIIͲ1toIIIͲ4,IIIͲ8toIIIͲ16,IIIͲ18toIIIͲ20,IIIͲ24toIIIͲ26;PR atIͲ17toIͲ40,IIͲ1,IIIͲ1toIIIͲ3,IIIͲ4toIIIͲ7,IIIͲ8toIIIͲ9,IIIͲ10toIIIͲ11;CR/PRatTableIIͲ1,TableIIIͲ 11,TableIIIͲ12.Indeed,initsoriginalpetitions,petitionerarguedthatanexaminationofeachofthe sixdomesticlikeproductfactorssupporteddefiningasingledomesticlikeproductconsistingofthe productswithinthescopeoftheinvestigations,whichatthetimeincludedbothsmallͲandlargeͲ diameterIMTDCs.Petitions,vol.Iat5Ͳ6,17Ͳ22.Aspetitionerexplained,theIMTDCs“coveredby thescopeofthesepetitionsshouldbeconsideredtocompriseasingledomesticlikeproduct. CoveredIMTDCscompriserelatedproductsofdifferentsizesandshapesthatconstitutea continuumwithoutanyclearbreakingpoint.Theyaresoldthroughthesamechannelsof distribution,areperceivedbycustomersaspartsofmechanicaltransferdrives,andareproducedin thesameproductionfacilitiesusingcommonproductionmethods,machinery,andemployees. Theirpricesfallwithinacontinuumdictatedbysizeandweight,andbothfinishedandunfinished coveredIMTDCshavesimilarphysicalcharacteristics,andthesameendfunction.Assuch,the Commissionshouldfindasingledomesticlikeproductcoterminouswiththeproductssubjectto theseinvestigations.”Id.at21Ͳ22. 48SeegenerallyPetitioner’sPrehearingBriefat2,Exhibit1. 49HearingTr.at130Ͳ136. 50Petitioner’sPosthearingBriefatExhibit1at14Ͳ15;CR/PRatTableIIIͲ1n.4. 51Accordingtoinformationontherecordinthefinalphaseoftheseinvestigations,fiveU.S. firmsfinishIMTDCsfromcastingsthattheypurchasefromthirdparties(B&B,Baldor,HiͲLo,Maurey, andSterling),andfivefirmsareintegratedproducersthatbothcastandfinishIMTDCs(Bremen, EnDyn,Goldens,MartinSprocket,andTBW).Severalfoundriesalsoreportedthattheymanufacture unfinishedIMTDCsintheUnitedStates.CRatIIIͲ1toIIIͲ3;PRatIIIͲ1toIIIͲ2.Domesticproducers reportedmanufacturingsmallͲandlargeͲdiameterIMTDCsonthesameproductionequipment. CR/PRatTableIIIͲ11(overlappingequipmentforfinishing),TableIIIͲ12(overlappingequipmentfor casting);CRatIIIͲ18toIIIͲ20;PRatIIIͲ8toIIIͲ9;***.Moreover,asevenpetitionernotes,the Commission’squestionnairesinstructeddomesticproducerstoreportinformationonsmallͲand largeͲdiameterIMTDCsseparatelyfromanydataonMTDCsmanufacturedfromsteel,plastic,or othermaterials.Petitioner’sPosthearingBriefatExhibit1at37Ͳ38.Thus,theoverlapinproduction facilitiesforsmallͲandlargeͲdiameterIMTDCsreflectedinCR/PRatTableIIIͲ11andTableIIIͲ12is notbasedonproductionofsteelorplasticIMTDCs,whichispresentedelsewhereinthesetables. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 22 of 218
15remainunpersuadedthat4inchesinnominaloutsidediameterestablishesacleardividing lineforIMTDCs. Intheabsenceofnewargumentsorevidenceunderminingourfindingsinthe preliminarydeterminations,weretainthepriordomesticlikeproductdefinition:asingle domesticlikeproductincludingallformsoffinishedandunfinishedIMTDCsdescribedinthe investigations’scopeandincludingsmallͲdiameterIMTDCsunder4inchesinmaximum nominaloutsidediameter.Wealsodeterminenottoincludeinthedomesticlikeproduct definitionsteelMTDCsthataremanufacturedfromsinteredsteelpowderordirectͲ machinedsteelbarsforthesamereasonsarticulatedinourpreliminarydeterminations. 52
III. DomesticIndustry
Thedomesticindustryisdefinedasthedomestic“producersasawholeofa domesticlikeproduct,orthoseproducerswhosecollectiveoutputofadomesticlike productconstitutesamajorproportionofthetotaldomesticproductionoftheproduct.” 53 Indefiningthedomesticindustry,theCommission’sgeneralpracticehasbeentoincludein theindustryproducersofalldomesticproductionofthelikeproduct,whethertollͲ produced,captivelyconsumed,orsoldinthedomesticmerchantmarket.These investigationsraisetwosetsofdomesticindustryissues.Thefirstconcernswhethercertain processingactivitiesaresufficienttoconstitutedomesticproduction.Thesecondconcerns whetherappropriatecircumstancesexisttoexcludeanydomesticproducersfromthe domesticindustrypursuanttotherelatedpartiesprovision.
52USITCPub.4587at16Ͳ19. 5319U.S.C.§1677(4)(A). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 23 of 218
16A. SufficientProductionͲRelatedActivities
Indecidingwhetherafirmqualifiesasadomesticproducerofthedomesticlike product,theCommissiongenerallyanalyzestheoverallnatureofafirm’sU.S.productionͲ relatedactivities,althoughproductionͲrelatedactivityatminimumlevelscouldbe insufficienttoconstitutedomesticproduction. 54TheproductionofIMTDCsbeginswiththe meltingofpigiron,scrapiron,andferrousscrapmetalinafoundryfurnacealongwith alloyingagentsthatmaybeneededtoensureproperironchemistry.Manufacturerspour themoltenmetalintoafoundrymoldthattypicallyconsistsofanimprintedshapeformed bysandthathasbeencompactedintoacavitythatapproximatesthefinishedshapeofthe desiredoutput.OncethesandͲcastmoltenmetalhascooledintoasolid,themanufacturer removesandblastsawaythesandandremovesanyexcessironthatmaybepresentinthe mold.TofinishtheunfinishedIMTDCblanks,manufacturersmachinegroovesorteeth,cut tapholes,sometimesapplysurfacetreatmentssuchaspaintoroil,andtheninspectand testthematerial.55IntheUnitedStates,somefirms(foundries)manufactureunfinished IMTDCs,somefirms(finishers)onlyengageinfinishingoperationsonunfinishedIMTDCs, andsomefirmshaveintegratedoperationsthatmanufactureunfinishedandfinished IMTDCs. 56 Initspreliminarydeterminations,theCommissionincludedfinishersinthedomestic industrybasedonitsfindingthatmachiningoperationstotransformunfinishedIMTDC blanksintofinishedIMTDCsweresufficientproductionͲrelatedactivitiestoconstitute domesticproduction. 57Atthetime,petitionerarguedthatmachiningoperationsdidnot,in andofthemselves,constitutedomesticproduction. 58Inthefinalphaseofthese investigations,petitionerarguesthat,relativetofinishingoperations,castingunfinished IMTDCsisamoresubstantialpartoftheoverallproductionprocessthataccountsforalarge portionofthecostandvalueofthefinishedIMTDCs,butitnolongerarguesagainst
54TheCommissiongenerallyconsiderssixfactors:(1)sourceandextentofthefirm’scapital investment;(2)technicalexpertiseinvolvedinU.S.productionactivities;(3)valueaddedtothe productintheUnitedStates;(4)employmentlevels;(5)quantityandtypeofpartssourcedinthe UnitedStates;and(6)anyothercostsandactivitiesintheUnitedStatesdirectlyleadingto productionofthelikeproduct.NosinglefactorisdeterminativeandtheCommissionmayconsider anyotherfactorsitdeemsrelevantinlightofthespecificfactsofanyinvestigation.Crystalline SiliconPhotovoltaicCellsandModulesfromChina,Inv.Nos.701ͲTAͲ481and731ͲTAͲ1190(Final), USITCPub.4360at12Ͳ13(Nov.2012). 55CRatIͲ35toIͲ39;PRatIͲ31toIͲ34;ConfidentialPreliminaryViews,EDISDoc.571266at 16;USITCPub.4587at11Ͳ12. 56See,e.g.,CR/PRatTableIIIͲ1. 57USITCPub.4587at20Ͳ23;ConfidentialPreliminaryViews,EDISDoc.571266at29Ͳ35. 58Petitioner’sPostconf.Briefat5,Exhibit1at24Ͳ29;Confer.Tr.at15;Petitions,Vol.Iat2, 13,22Ͳ25,27. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 24 of 218
17includingfinishersinthedomesticindustry.59ChineseRespondentsdonotmakeany argumentsconcerningthisissueinthefinalphaseoftheseinvestigations. 60 Basedonourconsiderationofseveralfactors,wedeterminethatfinishing operationstomachineunfinishedIMTDCsintofinishedIMTDCsaresufficientproductionͲ relatedactivitiestoconstitutedomesticproduction.Finishingoperationsrelyprimarilyon unfinishedIMTDCsthataremanufacturedintheUnitedStates. 61Domesticfinishing operationsemployfewerproductionͲrelatedworkers(“PRWs”)thancastingoperations, 62 butatleastsomespecializedtrainingisneededfortheseemployees.63Thevalueaddedby finishingoperationsissubstantial. 64Moreover,finishingoperationsappeartoinvolve substantialcapitalinvestments.65Basedontherecord,wedeterminetoincludewithinthe domesticindustryU.S.firmsthatmachineunfinishedIMTDCsintofinishedIMTDCs.
59Petitioner’sPrehearingBriefatExhibit1at3Ͳ4. 60Inthepreliminaryphaseoftheseinvestigations,respondentsarguedthatfinishersshould beincludedinthedomesticindustry.ChineseRespondents’Postconf.Briefat14Ͳ15. 61U.S.firmsthatengageinfinishingoperationsprimarilysourcetheirrawmaterialsfromthe UnitedStates.In2015,percentofdomesticproducers’combinedfinishedIMTDCproductionin termsofpieceswasfromunfinishedIMTDCs,approximatelywasfrom,percentwas fromunfinishedIMTDCs,andpercentwasfromunfinishedIMTDCs.CRatIIIͲ15toIIIͲ 16;PRatIIIͲ7. 62Comparedtointegratedproducers,U.S.firmsthatsolelymachineunfinishedIMTDCsinto finishedIMTDCsreportedemployingfewer,butstillsizable,numbersofPRWs.CR/PRatTableIIIͲ9 (finishersthatdonothavecastingoperationsemployedtoPRWsduringthePOI,whereas integratedproducersemployedtoPRWs). 63Petitionercontinuestoarguethatfinishingoperationsareaminorstepofalarger,more laborͲintensiveprocess.Itassertsthatcastingoperationscreatetheessentialcharacteristicsofthe finishedfinalproduct,afterwhichonlyminoradditionalfinishingoccurs.Petitioner’sPrehearing BriefatExhibit1at3Ͳ4;Petitioner’sPostconf.BriefatExhibit1at28Ͳ29.Atleastsometechnical expertiseisrequiredforfinishingoperations.Threeintegratedfirmsthatmanufactureunfinished andfinishedIMTDCsreportedthatnosubstantialtechnicalexpertiseisrequiredtomanufacture finishedIMTDCsfromunfinishedIMTDCs,whereasthreeintegratedfirmsandallfivefirmsthat solelyfinishIMTDCsreportedthattechnicalexpertiseisrequiredtomachineunfinishedIMTDCsinto finishedIMTDCs.Duringthepreliminaryphaseoftheseinvestigations,Baldorreportedthatit utilizesroboticcells,tooling,andotherspeciallydesignedequipmentthatarededicatedto machiningblankstoperformfinishingoperationsthatincludedrilling,boring,turning,hobbing, broaching,flanging,coating,testing,andinspecting.Itarguedthatitshighlytrainedemployees haveundertakenextensivemathematicalstudiesanduseadvancedtechnicalskillstooperate thatequipment.Baldor’sPostconf.Briefat22Ͳ23,Exhibit2atparagraph3,paragraph6,Exhibit10 at4;Confer.Tr.at18;CR/PRatTableIIIͲ6. 64U.S.firmsperformingfinishingoperationsreportedthatthevalueaddedbytheirfinishing operationswasaboutpercent(calculatedasaratioofconversioncoststototalcostofgoods sold(“COGS”))orpercent(calculatedasaratioofconversioncostsplusselling,general,and administrativeexpenses(“SG&A”)tooperatingexpenses).CR/PRatTableIIIͲ8. 65U.S.firmsperformingfinishingoperationsreportedthattheirfinishingoperations involvedcapitalinvestmentsrangingfrom$to$,andtheyreportedvarioussourcesfortheir capitalinvestment(iftheyreportedthisinformation),including.CR/PRatTableIIIͲ4. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 25 of 218
18B. RelatedParties
Wealsomustdeterminewhetheranyproducerofthedomesticlikeproductshould beexcludedfromthedomesticindustrypursuanttosection771(4)(B)oftheTariffAct.This provisionallowstheCommission,ifappropriatecircumstancesexist,toexcludefromthe domesticindustryproducersthatarerelatedtoanexporterorimporterofsubject merchandiseorwhicharethemselvesimporters.66Exclusionofsuchaproduceriswithin theCommission’sdiscretionbaseduponthefactspresentedineachinvestigation. 67 Initspreliminarydeterminations,theCommissionfoundthatthreefirmswere relatedpartiesasimportersofsubjectmerchandise:.TheCommissionfoundthat appropriatecircumstancesdidnotexisttoexcludeanyofthesefirmsfromthedomestic industry.68 Inthefinalphaseoftheseinvestigations,fourrespondingdomesticproducersare relatedpartiesbecausetheyimportedsubjectmerchandiseduringtheJanuary2013to June2016periodofinvestigation(“POI”). 69Petitionerarguesagainstexcludingfrom thedomesticindustry,assertingthateachofthesefirms’primaryinterestlieswithdomestic production. 70ChineseRespondentsarguethat***shouldbeexcludedfromthedomestic industryduetoitssignificantrelianceonsubjectandnonsubjectimports.71Wefindthat appropriatecircumstancesdonotexisttoexcludeanyofthefirmsfromthedomestic industryasrelatedparties,asexplainedbelow.
66SeeTorringtonCo.v.UnitedStates,790F.Supp.1161,1168(Ct.Int’lTrade1992),aff’d mem.,991F.2d809(Fed.Cir.1993);SandvikABv.UnitedStates,721F.Supp.1322,1331Ͳ32(Ct. Int’lTrade1989),aff’dmem.,904F.2d46(Fed.Cir.1990);EmpirePlowCo.v.UnitedStates,675F. Supp.1348,1352(Ct.Int’lTrade1987). 67TheprimaryfactorstheCommissionhasexaminedindecidingwhetherappropriate circumstancesexisttoexcludearelatedpartyincludethefollowing:(1)thepercentageofdomestic productionattributabletotheimportingproducer;(2)thereasontheU.S.producerhasdecidedto importtheproductsubjecttoinvestigation(whetherthefirmbenefitsfromtheLTFVsalesor subsidiesorwhetherthefirmmustimportinordertoenableittocontinueproductionandcompete intheU.S.market);(3)whetherinclusionorexclusionoftherelatedpartywillskewthedataforthe restoftheindustry;(4)theratioofimportshipmentstoU.S.productionfortheimportedproduct; and(5)whethertheprimaryinterestoftheimportingproducerliesindomesticproductionor importation.ChangzhouTrinaSolarEnergyCo.v.USITC,100F.Supp.3d1314,1326Ͳ31(Ct.Int’l. Trade2015);seealsoTorrington,790F.Supp.at1168. 68ConfidentialPreliminaryViews,EDICDoc.57126at35Ͳ42&n.143;USITCPub.4587at23Ͳ 28&n.143(ViceChairmanPinkertandCommissionerWilliamsondisagreeingwithrespectto***, findingthatthefirm’sratioofsubjectimportstodomesticproduction,***,indicatingthatits primaryinterestslaywithimportationandnotdomesticproduction). 69CR/PRatTableIIIͲ17(showingsubjectimports). 70Petitioner’sPosthearingBriefatExhibit1at29Ͳ31;Petitioner’sPrehearingBriefat3Ͳ6. 71Respondents’PrehearingBriefat4Ͳ9. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 26 of 218
19.isaofIMTDCsandaccountedforpercentbypiecesand*** percentbyweightofrespondingU.S.producers’productionofIMTDCsin2015. 72 DuringthePOI,alsoimported.Onavaluebasis,thefirm’simportsofsubject merchandisefrom,andonavolumebasis(bypieces),itsimportsofsubject merchandisefrom***.73Thefirm’scapitalexpendituresandresearchanddevelopment (“R&D”)expenseswere***.74WhilereportedsourcingfromotherU.S.producers duringthePOI,italsoreportedthatit***.75hadtheoperatingperformanceofany U.S.IMTDCduringthePOI. 76ThisfirmalsoreportedduringthePOI.It***. 77 Further,thefirm***.7879 Wefindappropriatecircumstancesdonotexisttoexcludethisfirmasarelated party.Althoughthisfirmhadahighratioofsubjectimportstodomesticproductionduring thePOI,its***indicateacommitmenttoU.S.production,whichisfurthersupportedby
72CR/PRatTableIIIͲ1. 73Thevolume(inpieces)ofimportsofsubjectmerchandisefromexpressedasaratioto thefirm’sU.S.productionwaspercentin2013,percentin2014,percentin2015, percentinthefirstsixmonthsof2015(“interim2015”),andpercentinthefirstsixmonthsof 2016(“interim2016”),whereasthevolume(inpieces)ofsubjectimportsfromasaratiotoU.S. productionwaspercentin2013,percentin2014,percentin2015,percentin interim2015,andpercentininterim2016).Asaratiotothevalueofthefirm’stotalU.S. shipments,thevalueofimportsofsubjectmerchandisefromChinaandCanadawaspercentin 2013,percentin2014,percentin2015,percentininterim2015,andpercentin interim2016;asaratiotothefirm’stotalU.S.shipmentsbypieces,thevolumeofimportsofsubject merchandisefromCanadaandChinawaspercentin2013,percentin2014,percentin 2015,percentininterim2015,andpercentininterim2016.Asexplainedinourvolume discussioninsectionVI.Cbelow,werelyprimarilyonvalueͲbasedindicatorsasthebestmeasurefor theproductintheseinvestigations,althoughwehavealsoconsideredquantityͲbasedindicators(in pieces)whereappropriate. 74CR/PRatTableVIͲ8(indicating). 75ForeignProducerQuestionnaire,EDISDoc.(Oct.21,2016).reportedthat. U.S.ImporterQuestionnaire,EDISDoc.atResponsetoQuestionIIͲ4. 76CR/PRatTableEͲ2. 77CR/PRatTableIIIͲ3. 78CR/PRatTableIIIͲ3.Withrespecttothe.ForeignProducerQuestionnaire,EDIS Doc.(Oct.21,2016).Suchchangesarealsoreflectedinthefirm’simportdata,withmarkedly inbothvolumeandvalueininterim2016thanininterim2015.CR/PRatTableIIIͲ17(indicating importsofsubjectmerchandisefromofpiecesandininterim2015versuspieces andininterim2016). 79ChairmanWilliamsonandCommissionerPinkertnotethattheinformationinthefinal phaseoftheseinvestigationsdiffersinsignificantwaysfromtheinformationthatledthemto excludeinthepreliminaryphaseoftheseinvestigations.Inparticular,theratioof***’ssubject importstobothitsU.S.shipmentsofdomesticproductanditsU.S.productionaresubstantially lowernow.Moreover,***.Thus,ChairmanWilliamsonandCommissionerPinkertjointhe discussionabove. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 27 of 218
20thefirm’s***.Finally,thefirmhasthepetitionsonimportsofIMTDCsfromCanada andChina.80 .isaofIMTDCsandaccountedforpercentbypiecesand percentbyweightofrespondingU.S.producers’productionofIMTDCsin2015. 81 DuringthePOI,imported,althoughsuchimportswererelativetoitsU.S. shipmentsintermsofbothpiecesandvalue.82Thefirmhadcapitalexpenditures throughoutthePOIthatwere***,83andthefirmwasthroughoutthePOI.84 Wefindthatappropriatecircumstancesdonotexisttoexcludethisfirmasarelated party.It,is***,85andhasimportsofsubjectmerchandiserelativetoitsdomestic production.Thesefactssuggestthatitsprincipalinterestisindomesticproduction. .isanwithoneofthevolumesofIMTDCsintheUnitedStates, accountingforpercentofpiecesandpercentofweightof***.86Thefirmreported volumesofimportsofsubjectmerchandise.Onaquantitybasis,itsimportsof subjectmerchandisewere***,andonavaluebasiswere***.87capitalexpenditures R&Dexpenses.88Thefirmthepetitions, 89andit.90 Wefindthatappropriatecircumstancesdonotexisttoexcludethisfirmasarelated party.thepetitions,is,andimported***subjectmerchandiserelativetoits domesticproduction.Thesefactsindicatethatitsprincipalinterestisindomestic production.
80CR/PRatTableIIIͲ1. 81CR/PRatTableIIIͲ1. 82CR/PRatTableIIIͲ17(indicatingthatthevolumeinpiecesofimportsofsubject merchandisefromexpressedasaratiotothefirm’sU.S.productionwaspercentin2013, percentin2014,percentin2015,percentininterim2015,andpercentininterim 2016;thevalueofimportsofsubjectmerchandisefromasaratiotoitstotalshipmentswas percentin2013,percentin2014,percentin2015,percentininterim2015,and percentininterim2016).reportedimportingsubjectmerchandise.U.S.Importer Questionnaire,EDISDoc.atAnswertoQuestionIIͲ4. 83CR/PRatTableVIͲ8(indicatingthataccountedforthehighestcapital expendituresamong,witha***increaseininterim2016). 84CR/PRatTableEͲ2. 85CR/PRatTableIIIͲ1. 86CR/PRatTableIIIͲ1. 87CR/PRatTableIIIͲ17(***ratioofsubjectimportstoitsU.S.productioninquantitywas ***percentin2013,***percentin2014,***percentin2015,percentininterim2015,and percentininterim2016;byvalue,ratioofsubjectimportstototalshipmentswaspercentin 2013,***percentin2014,***percentin2015,percentininterim2015,andpercentin interim2016).reportedthat.U.S.ImporterQuestionnaire,EDISDoc.***atAnswerto QuestionIIͲ4. 88CR/PRatTableVIͲ8. 89CR/PRatTableIIIͲ1. 90CR/PRatTableEͲ1,TableEͲ2. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 28 of 218
21.andproducesIMTDCsintheUnitedStates.91Thefirmaccountedfor percentbypiecesandpercentbyweightofrespondingU.S.producers’production ofin2015. 92Itscapitalexpenditures***,anditsR&Dexpenseswere***.93Thefirm also***.94Itimportedsubjectmerchandise***,95withthevalueofsuchsubjectimports overthePOI,bothabsolutelyandasaratioofshipments. 96Italso.97 Onbalance,wefindthatappropriatecircumstancesdonotexisttoexcludethefirm asarelatedparty.Althoughitsvolumeofsubjectimports(inpieces),aswellastheratioof suchimportstototalshipments,ishigh,thevalueofsuchimportsoverthePOI,bothin absolutetermsandasaratioofdomesticproduction. 98Furtherevidencingitscommitment todomesticproduction,.Although***.Thus,onbalance,wefindthatappropriate circumstancesdonotexisttoexcludethisfirmfromthedomesticindustryasarelated party. Consequently,wedefinethedomesticindustryasallU.S.producersofthedomestic likeproduct,includingfoundriesmanufacturingunfinishedIMTDCs,firmsengagedsolelyin machiningunfinishedIMTDCsintofinishedIMTDCs,andintegratedproducersofIMTDCs.
IV. NegligibleImports
PursuanttoSection771(24)oftheTariffAct,importsfromasubjectcountryof merchandisecorrespondingtoadomesticlikeproductthataccountforlessthan3percent ofallsuchmerchandiseimportedintotheUnitedStatesduringthemostrecent12months forwhichdataareavailableprecedingthefilingofthepetitionshallbedeemednegligible. 99 NeitherpetitionernorChineseRespondentsdisputethatsubjectimportsfromCanadaand Chinaexceednegligiblelevels.
91CR/PRatTableIIIͲ1. 92CR/PRatTableIIIͲ1. 93CR/PRatTableVIͲ8(notingcapitalexpendituresof$***in2013,$***in2014,$***in 2015,$***ininterim2015,and$***ininterim2016.ItsR&Dexpenditureswere$in2013, $in2014,$in2015,$ininterim2015,and$ininterim2016). 94CR/PRatTableEͲ1. 95thatitwasforcedtoobtainsomeIMTDCsfromChinainordertocompete.. 96CR/PRatTableIIIͲ17(thevalueofimportsofsubjectmerchandisefromwas$ in2013,$***in2014,$in2015,$ininterim2015,and$ininterim2016.Theratioof thevalueofitssubjectimportstoitstotalshipmentsalsodeclinedoverthePOI,frompercentin 2013topercentin2014,percentin2015,percentininterim2015,andpercentin 2016).Intermsofvolume(bypieces),theratioofTBW’simportsofsubjectmerchandisefrom toitsdomesticproductionwaspercentin2013,percentin2014,percentin2015, percentininterim2015,andpercentininterim2016).reportedthat.U.S.Importer Questionnaire,EDISDoc.***atAnswertoQuestionIIͲ4. 97Petitioner’sPosthearingBriefatExhibit21. 98CR/PRatTableIIIͲ17. 9919U.S.C.§§1671b(a),1673b(a),1677(24)(A)(i),1677(24)(B). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 29 of 218
22Inthefinalphaseoftheseinvestigations,theCommission’sstaffissuedimporter questionnairesto91firms,including(1)allfirmsidentifiedaspossibleimportersinthe petitions(whichwerebasedonabroaderproposedscope)and(2)leadingcompanies identifiedin***thattogetheraccountedfor61.0percentofthetotalvalueofimportsfrom allcountriesunderHTSUSstatisticalreportingnumbers8483.50.6000,8483.50.9040,and 8483.90.8080. 100Petitionerreliedinthepetitionsuponthesethreestatisticalreporting numbersasthebestavailableforitscalculationofU.S.imports,despiteits acknowledgementthatthesestatisticalreportingnumberslikelyincludedmerchandisethat wasoutsidethescopeofthepetitions; 101asdiscussedearlier,thescopeofthe investigationsnarrowedconsiderablyafterthepetitionswerefiled,furtherlimitingthe utilityofofficialimportstatistics.TheCommissionalsoissuedimporterquestionnairesto anadditional212firmsthatwereidentifiedaspossibleU.S.producersofIMTDCs. 102 TwentyͲfivefirmsreportedthattheyhadimportedIMTDCsandsubmittedusable questionnairedata,andanadditional120firmsreportedthattheyhadnotimported IMTDCssinceJanuary1,2013. 103 Availabledataonimportsforourdeterminationsinthefinalphaseofthese investigationsarebasedonimporterquestionnaireresponsesof25firmsthatareestimated toaccountforatleastoneͲhalfofIMTDCimportsfromsubjectandnonsubjectcountriesin 2015. 104Aconclusiveestimateofthecoverageoftheimporterquestionnairesobtainedin thefinalphaseoftheseinvestigationsiscomplicatedbytheinclusionofbothIMTDCsand nonͲIMTDCmerchandiseinthevariousrelevantHTSUSstatisticalreportingnumbers,the largenumberofpotentialimportersidentifiedbyproprietaryCustomsdata,andthe diversityofsizesandapplicationsoftheproductatissue(makingitdifficulttoidentify
100CRatIVͲ1,IVͲ3;PRatIVͲ1,IVͲ3.Theremaining39.0percentofthetotalvalueofimports underthethreeprimaryHTSUSstatisticalreportingnumberswereimportedbymorethan3,000 smallerimportingfirms.CRatIVͲ3;PRatIVͲ3. 101Petitions,vol.Iat10,15. 102CRatIVͲ1;PRatIVͲ1.Theposthearingreportdoesnotincludeimportsfrom***.*** hadbeenidentifiedasleadingimportersofIMTDCsfromCanadainthepreliminaryphaseofthese investigations,andhadbeenidentifiedasoneoftheleadingimportersofIMTDCsfrom nonsubjectcountries.CaterpillarandGMnotifiedtheCommissionthatbasedonCommerce’s preliminarydeterminationstheirimportswereoutsidethescopeoftheinvestigations.CRatIͲ5 n.15;PRatIͲ4n.15;MemorandumINVͲNNͲ089atIͲ6(Dec.7,2015). 103CRatIVͲ1;PRatIVͲ1.Initsbrief,petitionerarguedthattherecorddidnotincludeany importerquestionnaireresponsesfrom.Petitioner’sPrehearingBriefat25Ͳ26.Asindicatedin theposthearingreport,providedtheCommissionwithinformationabouttheirimportsinthe interveningtime.CRatIVͲ1n.2;PRatIVͲ1n.2;CR/PRatTableIVͲ1.Duetothefinalscope language,theCommission’sstaffadjustedtheimporterdatabasefortheposthearingreportto excludealldataforandtoremovemostofthedatareportedby***.Consistentwith petitioner’sargument,thedatareportedby***,werenotincludedintheimportdatasetforthe posthearingreportbecauseCommerceexcludedTVDsfromthescopeoftheinvestigations. Petitioner’sPosthearingBriefatExhibit1at10. 104CRatIVͲ1toIVͲ4;PRatIVͲ1toIVͲ3;CR/PRatTableIVͲ1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 30 of 218
23relevantimportersbybusinesslineoraverageunitvalueofimports). 105Firmsthat respondedtotheCommission’squestionnaires,eitherwithdataorbycertifyingthatthey didnotimportsubjectmerchandise,accountedforthefollowingsharesof2015imports(by value)underthethreeHTSUSstatisticalreportingnumbers(which,asnotedabove,include merchandiseoutsidethescope),accordingto***:82.2percentofrelevantimportsfrom Canada;40.0percentofrelevantimportsfromChina;55.7percentofrelevantimportsfrom subjectcountriescombined;40.4percentofrelevantimportsfromnonsubjectcountries; and46.2percentofrelevantimportsfromsubjectandnonsubjectcountries.106Fifteenof theeighteenfirmsidentifiedinthepetitionsasimportersresponded,eitherwithdataorby certifyingthattheydidnotimporttheIMTDCsatissue. 107 TheavailabledataindicatethatsubjectimportsfromCanadaandChinaareeach abovenegligiblelevels.Accordingtoquestionnairedatafromthefinalphaseofthese investigationsforcalendaryear2015,subjectimportsoflargeͲdiameterIMTDCsfrom CanadaaccountedforpercentbyvalueoftotalimportsofallsizesofIMTDCs,and subjectimportsfromChinaaccountedforpercent.108Consequently,becauseeachof thesefiguresexceedstheapplicable3percentthreshold,wefindthatsubjectimportsfrom CanadaandChinaarenotnegligible.
V. Cumulation
Forpurposesofevaluatingthevolumeandeffectsforadeterminationofmaterial injurybyreasonofsubjectimports,section771(7)(G)(i)oftheTariffActrequiresthe Commissiontocumulatesubjectimportsfromallcountriesastowhichpetitionswerefiled and/orinvestigationsselfͲinitiatedbyCommerceonthesameday,ifsuchimportscompete witheachotherandwiththedomesticlikeproductintheU.S.market.Inassessingwhether subjectimportscompetewitheachotherandwiththedomesticlikeproduct,the Commissiongenerallyhasconsideredfourfactors:
105CRatIͲ8;PRatIͲ6. 106CRatIVͲ3;PRatIVͲ3. 107CRatIVͲ4;PRatIVͲ3. 108CR/PRatTableIVͲ4.Questionnairedataforcalendaryear2015,whicharemorealigned withCommerce’sfinalscopelanguage,donotcorrespondtothe12Ͳmonthperiodprecedingthe October28,2015filingofthepetitions.Consequently,therecordalsocontainsofficialimport statisticsfortheOctober2014throughSeptember201512Ͳmonthperiod,althoughthesestatistics includesubstantialamountsofproductsotherthanthelargeͲdiameterIMTDCswithinthescopeof theseinvestigations;thesedataalsoshowimportsfromCanadaandChinaarewellabovenegligible levels,accountingfor16.3percentand22.1percentbyvalueoftotallargeͲdiameterimports, respectively.Therecordalsocontainsimportdatacompiledfromthequestionnairesinthe preliminaryphaseoftheinvestigationsfortheperiodOctober2014toSeptember2015,whichare overstatedbecausetheydonotreflectcertainscopeexclusionsthatCommercesubsequentlymade; thesedatashowthatsubjectimportsfromCanadaandChinaaccountedfor***percentand ***percent,respectively,oftotalimportsofallsizesofIMTDCs.CR/PRatTableIVͲ4. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 31 of 218
24(1) thedegreeoffungibilitybetweensubjectimportsfromdifferent countriesandbetweensubjectimportsandthedomesticlike product,includingconsiderationofspecificcustomerrequirements andotherqualityrelatedquestions; (2) thepresenceofsalesorofferstosellinthesamegeographicmarkets ofsubjectimportsfromdifferentcountriesandthedomesticlike product; (3) theexistenceofcommonorsimilarchannelsofdistributionfor subjectimportsfromdifferentcountriesandthedomesticlike product;and (4) whetherthesubjectimportsaresimultaneouslypresentinthe market.109
Whilenosinglefactorisnecessarilydeterminative,andthelistoffactorsisnot exclusive,thesefactorsareintendedtoprovidetheCommissionwithaframeworkfor determiningwhethersubjectimportscompetewitheachotherandwiththedomesticlike product.110Onlya“reasonableoverlap”ofcompetitionisrequired.111 PetitionerarguesinfavorofcumulatingsubjectimportsfromCanadaandChina, 112 astheCommissiondidinitspreliminarydeterminations. 113ChineseRespondentsdonot contestcumulationforpurposesoftheCommission’spresentmaterialinjuryanalysis. WefinditappropriatetoconsidersubjectimportsfromCanadaandChinaona cumulatedbasisintheseinvestigations,becausethestatutorycriteriaforcumulationare
109SeeCertainCastͲIronPipeFittingsfromBrazil,theRepublicofKorea,andTaiwan,Inv. Nos.731ͲTAͲ278to280(Final),USITCPub.1845(May1986),aff’d,FundicaoTupy,S.A.v.United States,678F.Supp.898(Ct.Int’lTrade),aff’d,859F.2d915(Fed.Cir.1988). 110See,e.g.,WielandWerke,AGv.UnitedStates,718F.Supp.50(Ct.Int’lTrade1989). 111TheStatementofAdministrativeAction(“SAA”)totheUruguayRoundAgreementsAct (“URAA”),expresslystatesthat“thenewsectionwillnotaffectcurrentCommissionpracticeunder whichthestatutoryrequirementissatisfiedifthereisareasonableoverlapofcompetition.”H.R. Rep.No.103Ͳ316,Vol.Iat848(1994)(citingFundicaoTupy,678F.Supp.at902);seeGossGraphic Sys.,Inc.v.UnitedStates,33F.Supp.2d1082,1087(Ct.Int’lTrade1998)(“cumulationdoesnot requiretwoproductstobehighlyfungible”);WielandWerke,718F.Supp.at52(“Completely overlappingmarketsarenotrequired.”). 112Petitioner’sPrehearingBriefat7Ͳ9. 113USITCPub.4587at28Ͳ30. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 32 of 218
25satisfied. 114Asaninitialmatter,petitionerfiledthepetitionswithrespecttobothsubject countriesonthesameday,October28,2015. 115 Fungibility.Allrespondingdomesticproducers,nearlyallrespondingimporters,and mostrespondingpurchasersreportedthatlargeͲdiameterIMTDCsfromCanada,China,and theUnitedStatesarealwaysorfrequentlyinterchangeable.116Majoritiesorpluralitiesof purchasersfoundthedomesticlikeproducttobecomparablewithsubjectimportsfrom Canadaforeachof14nonͲpricecharacteristics,thedomesticlikeproductandsubject importsfromChinatobecomparableforeightofthe14characteristics,andsubjectimports fromCanadaandChinatobecomparablefornineofthe14characteristics. 117 ChannelsofDistribution.QuestionnairedataindicatethatIMTDCsfromCanada, China,andtheUnitedStateswereprimarilysoldtodistributorsandtoendusers/original equipmentmanufacturers(“OEMs”). 118 GeographicOverlap.TherecordindicatesthatIMTDCsfromCanada,China,andthe UnitedStatesweresoldinallregionsoftheUnitedStates.119 SimultaneousPresenceinMarket.Questionnairedataindicatethatsubjectimports fromCanadawerepresentintheU.S.marketthroughoutthePOIalongwithsubject importsfromChinaandthedomesticlikeproduct.120 Conclusion.Basedontherecord,wefindthatsubjectimportsfromCanadaand ChinaarefungiblewithoneanotherandwiththedomesticlikeproductandthatlargeͲ diameterIMTDCsmanufacturedinCanada,China,andtheUnitedStatesweresold simultaneouslyinoverlappinggeographicmarketsandthroughsimilarchannelsof distribution.Becausetherecordindicatesareasonableoverlapofcompetitionamong IMTDCsmadeinCanada,China,andtheUnitedStates,wecumulatesubjectimportsfrom CanadaandChinaforpurposesofouranalysisofmaterialinjurybyreasonofsubject imports.
VI. NoMaterialInjurybyReasonofSubjectImports
Basedontherecordinthefinalphaseoftheseinvestigations,wefindthatan industryintheUnitedStatesisnotmateriallyinjuredbyreasonofimportsoflargeͲdiameter
114Weobservethattheseinvestigationsinvolveantidumpingdutyfindingsregarding IMTDCsfrombothCanadaandChinaandsubsidyfindingssolelyregardingIMTDCsfromChina.We havepreviouslyexplainedwhywearecontinuingourlongstandingpracticeofcrossͲcumulating subsidizedimportswithdumpedimports.SeePolyethyleneTerephthalate(PET)ResinfromCanada, China,India,andOman,Inv.Nos.701ͲTAͲ531to532and731ͲTAͲ1270to1273(Final),USITCPub. 4604at9Ͳ11(Apr.2016). 115Noneofthestatutoryexceptionstocumulationapplies. 116CR/PRatTableIIͲ9. 117CR/PRatTableIIͲ8. 118CR/PRatTableIIͲ1. 119CR/PRatTableIIͲ2,TableIVͲ5. 120CR/PRatTableIIͲ1,TablesIVͲ2toIVͲ3. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 33 of 218
26IMTDCsfromCanadaandChinathatCommercehasfoundtobesoldintheUnitedStatesat lessthanfairvalueandsubsidizedbythegovernmentofChina.
A. LegalStandards
Inthefinalphaseofantidumpingandcountervailingdutyinvestigations,the CommissiondetermineswhetheranindustryintheUnitedStatesismateriallyinjuredor threatenedwithmaterialinjurybyreasonoftheimportsunderinvestigation. 121Inmaking thisdetermination,theCommissionmustconsiderthevolumeofsubjectimports,their effectonpricesforthedomesticlikeproduct,andtheirimpactondomesticproducersof thedomesticlikeproduct,butonlyinthecontextofU.S.productionoperations. 122The statutedefines“materialinjury”as“harmwhichisnotinconsequential,immaterial,or unimportant.” 123Inassessingwhetherthedomesticindustryismateriallyinjuredbyreason ofsubjectimports,weconsiderallrelevanteconomicfactorsthatbearonthestateofthe industryintheUnitedStates.124Nosinglefactorisdispositive,andallrelevantfactorsare considered“withinthecontextofthebusinesscycleandconditionsofcompetitionthatare distinctivetotheaffectedindustry.” 125 AlthoughthestatuterequirestheCommissiontodeterminewhetherthedomestic industryis“materiallyinjuredorthreatenedwithmaterialinjurybyreasonof”unfairly tradedimports, 126itdoesnotdefinethephrase“byreasonof,”indicatingthatthisaspectof theinjuryanalysisislefttotheCommission’sreasonableexerciseofitsdiscretion. 127In identifyingacausallink,ifany,betweensubjectimportsandmaterialinjurytothedomestic industry,theCommissionexaminesthefactsofrecordthatrelatetothesignificanceofthe volumeandpriceeffectsofthesubjectimportsandanyimpactofthoseimportsonthe conditionofthedomesticindustry.Thisevaluationunderthe“byreasonof”standardmust ensurethatsubjectimportsaremorethanaminimalortangentialcauseofinjuryandthat
12119U.S.C.§§1671d(b),1673d(b).TheTradePreferencesExtensionActof2015,Pub. 114Ͳ27,amendedtheprovisionsoftheTariffActpertainingtoCommissiondeterminationsof materialinjuryandthreatofmaterialinjurybyreasonofsubjectimportsincertainrespects.We appliedtheseamendmentshere. 12219U.S.C.§1677(7)(B).TheCommission“mayconsidersuchothereconomicfactorsas arerelevanttothedetermination”butshall“identifyeach{such}factor...andexplaininfullits relevancetothedetermination.”19U.S.C.§1677(7)(B). 12319U.S.C.§1677(7)(A). 12419U.S.C.§1677(7)(C)(iii). 12519U.S.C.§1677(7)(C)(iii). 12619U.S.C.§§1671d(a),1673d(a). 127AngusChemicalCo.v.UnitedStates,140F.3d1478,1484Ͳ85(Fed.Cir.1998)(“{T}he statutedoesnot‘compelthecommissioners’toemploy{aparticularmethodology}.”),aff’g,944F. Supp.943,951(Ct.Int’lTrade1996). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 34 of 218
27thereisasufficientcausal,notmerelyatemporal,nexusbetweensubjectimportsand materialinjury.128 Inmanyinvestigations,thereareothereconomicfactorsatwork,someorallof whichmayalsobehavingadverseeffectsonthedomesticindustry.Sucheconomicfactors mightincludenonsubjectimports;changesintechnology,demand,orconsumertastes; competitionamongdomesticproducers;ormanagementdecisionsbydomesticproducers. ThelegislativehistoryexplainsthattheCommissionmustexaminefactorsotherthan subjectimportstoensurethatitisnotattributinginjuryfromotherfactorstothesubject imports,therebyinflatinganotherwisetangentialcauseofinjuryintoonethatsatisfiesthe statutorymaterialinjurythreshold. 129Inperformingitsexamination,however,the Commissionneednotisolatetheinjurycausedbyotherfactorsfrominjurycausedby unfairlytradedimports. 130Nordoesthe“byreasonof”standardrequirethatunfairly
128TheFederalCircuit,inaddressingthecausationstandardofthestatute,observedthat “{a}slongasitseffectsarenotmerelyincidental,tangential,ortrivial,theforeignproductsoldat lessthanfairvaluemeetsthecausationrequirement.”NipponSteelCorp.v.USITC,345F.3d1379, 1384(Fed.Cir.2003).ThiswasfurtherratifiedinMittalSteelPointLisasLtd.v.UnitedStates,542 F.3d867,873(Fed.Cir.2008),wheretheFederalCircuit,quotingGeraldMetals,Inc.v.United States,132F.3d716,722(Fed.Cir.1997),statedthat“thiscourtrequiresevidenceintherecord‘to showthattheharmoccurred“byreasonof”theLTFVimports,notbyreasonofaminimalor tangentialcontributiontomaterialharmcausedbyLTFVgoods.’”SeealsoNipponSteelCorp.v. UnitedStates,458F.3d1345,1357(Fed.Cir.2006);TaiwanSemiconductorIndustryAss’nv.USITC, 266F.3d1339,1345(Fed.Cir.2001). 129SAAat851Ͳ52(“{T}heCommissionmustexamineotherfactorstoensurethatitisnot attributinginjuryfromothersourcestothesubjectimports.”);S.Rep.96Ͳ249at75(1979)(the Commission“willconsiderinformationwhichindicatesthatharmiscausedbyfactorsotherthan lessͲthanͲfairͲvalueimports.”);H.R.Rep.96Ͳ317at47(1979)(“inexaminingtheoverallinjurybeing experiencedbyadomesticindustry,theITCwilltakeintoaccountevidencepresentedtoitwhich demonstratesthattheharmattributedbythepetitionertothesubsidizedordumpedimportsis attributabletosuchotherfactors;”thosefactorsinclude“thevolumeandpricesofnonsubsidized importsorimportssoldatfairvalue,contractionindemandorchangesinpatternsofconsumption, traderestrictivepracticesofandcompetitionbetweentheforeignanddomesticproducers, developmentsintechnologyandtheexportperformanceandproductivityofthedomestic industry”);accordMittal,542F.3dat877. 130SAAat851Ͳ52(“{T}heCommissionneednotisolatetheinjurycausedbyotherfactors frominjurycausedbyunfairimports.”);TaiwanSemiconductor,266F.3dat1345(“{T}he Commissionneednotisolatetheinjurycausedbyotherfactorsfrominjurycausedbyunfairimports ....Rather,theCommissionmustexamineotherfactorstoensurethatitisnotattributinginjury fromothersourcestothesubjectimports.”(emphasisinoriginal));AsociaciondeProductoresde SalmonyTruchadeChileAGv.UnitedStates,180F.Supp.2d1360,1375(Ct.Int’lTrade2002) (“{t}heCommissionisnotrequiredtoisolatetheeffectsofsubjectimportsfromotherfactors contributingtoinjury”ormake“brightͲlinedistinctions”betweentheeffectsofsubjectimportsand othercauses.);seealsoSoftwoodLumberfromCanada,Inv.Nos.701ͲTAͲ414and731ͲTAͲ928 (Remand),USITCPub.3658at100Ͳ01(Dec.2003)(Commissionrecognizedthat“{i}fanallegedother factorisfoundnottohaveorthreatentohaveinjuriouseffectstothedomesticindustry,i.e.,itis notan‘othercausalfactor,’thenthereisnothingtofurtherexamineregardingattributionto (Continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 35 of 218
28tradedimportsbethe“principal”causeofinjuryorcontemplatethatinjuryfromunfairly tradedimportsbeweighedagainstotherfactors,suchasnonsubjectimports,whichmaybe contributingtooverallinjurytoanindustry.131Itisclearthattheexistenceofinjurycaused byotherfactorsdoesnotcompelanegativedetermination. 132 Assessmentofwhethermaterialinjurytothedomesticindustryis“byreasonof” subjectimports“doesnotrequiretheCommissiontoaddressthecausationissueinany particularway”aslongas“theinjurytothedomesticindustrycanreasonablybeattributed tothesubjectimports”andtheCommission“ensure{s}thatitisnotattributinginjuryfrom othersourcestothesubjectimports.” 133134Indeed,theFederalCircuithasexaminedand affirmedvariousCommissionmethodologiesandhasdisavowed“rigidadherencetoa specificformula.” 135
(…Continued) injury”)(citingGeraldMetals,132F.3dat722(thestatute“doesnotsuggestthatanimporterof LTFVgoodscanescapecountervailingdutiesbyfindingsometangentialorminorcauseunrelatedto theLTFVgoodsthatcontributedtotheharmfuleffectsondomesticmarketprices.”)). 131S.Rep.96Ͳ249at74Ͳ75;H.R.Rep.96Ͳ317at47. 132SeeNippon,345F.3dat1381(“anaffirmativematerialͲinjurydeterminationunderthe statuterequiresnomorethanasubstantialͲfactorshowing.Thatis,the‘dumping’neednotbethe soleorprincipalcauseofinjury.”). 133Mittal,542F.3dat877Ͳ78;seealsoid.at873(“WhiletheCommissionmaynotenteran affirmativedeterminationunlessitfindsthatadomesticindustryismateriallyinjured‘byreasonof’ subjectimports,theCommissionisnotrequiredtofollowasinglemethodologyformakingthat determination...{andhas}broaddiscretionwithrespecttoitschoiceofmethodology.”)(citing UnitedStatesSteelGroupv.UnitedStates,96F.3d1352,1362(Fed.Cir.1996)andS.Rep.96Ͳ249at 75).InitsdecisioninSwiffͲTrainv.UnitedStates,792F.3d1355(Fed.Cir.2015),theFederalCircuit affirmedtheCommission’scausationanalysisascomportingwiththeCourt’sguidanceinMittal. 134CommissionersPinkertandKieffdonotjointhisparagraphorthefollowingthree paragraphs.TheypointoutthattheFederalCircuit,inBratsk,444F.3d1369,andMittal,heldthat theCommissionisrequired,incertaincircumstanceswhenanalyzingpresentmaterialinjury,to consideraparticularissuewithrespecttotheroleofnonsubjectimports,withoutrelianceupon presumptionsorrigidformulas.TheCourthasnotprescribedaspecificmethodofexpositionfor thisconsideration.Mittalexplainsasfollows: WhatBratskheldisthat“wherecommodityproductsareatissueandfairlytraded,price competitive,nonͲsubjectimportsareinthemarket,”theCommissionwouldnotfulfillits obligationtoconsideranimportantaspectoftheproblemifitfailedtoconsiderwhether nonͲsubjectornonͲLTFVimportswouldhavereplacedLTFVsubjectimportsduringthe periodofinvestigationwithoutacontinuingbenefittothedomesticindustry.444F.3dat 1369.Underthosecircumstances,BratskrequirestheCommissiontoconsiderwhether replacementoftheLTFVsubjectimportsmighthaveoccurredduringtheperiodof investigation,anditrequirestheCommissiontoprovideanexplanationofitsconclusion withrespecttothatfactor. 542F.3dat878. 135NucorCorp.v.UnitedStates,414F.3d1331,1336,1341(Fed.Cir.2005);seealsoMittal, 542F.3dat879(“BratskdidnotreadintotheantidumpingstatuteaProcrusteanformulafor determiningwhetheradomesticinjurywas‘byreason’ofsubjectimports.”). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 36 of 218
29TheFederalCircuit’sdecisionsinGeraldMetals,Bratsk,andMittalallinvolvedcases wheretherelevant“otherfactor”wasthepresenceinthemarketofsignificantvolumesof priceͲcompetitivenonsubjectimports.TheCommissioninterpretedtheFederalCircuit’s guidanceinBratskasrequiringittoapplyaparticularadditionalmethodologyfollowingits findingofmaterialinjuryincasesinvolvingcommodityproductsandasignificantmarket presenceofpriceͲcompetitivenonsubjectimports. 136Theadditional“replacement/benefit” testlookedatwhethernonsubjectimportsmighthavereplacedsubjectimportswithout anybenefittotheU.S.industry.TheCommissionappliedthatspecificadditionaltestin subsequentcases,includingtheCarbonandCertainAlloySteelWireRodfromTrinidadand TobagodeterminationunderlyingtheMittallitigation. MittalclarifiedthattheCommission’sinterpretationofBratskwastoorigidand madeclearthattheFederalCircuitdoesnotrequiretheCommissiontoapplyanadditional testnoranyonespecificmethodology;instead,thecourtrequirestheCommissiontohave “evidenceintherecord”to“showthattheharmoccurred‘byreasonof’theLTFVimports,” andrequiresthattheCommissionnotattributeinjuryfromnonsubjectimportsorother factorstosubjectimports. 137Accordingly,wedonotconsiderourselvesrequiredtoapply thereplacement/benefittestthatwasincludedinCommissionopinionssubsequentto Bratsk. TheprogressionofGeraldMetals,Bratsk,andMittalclarifiesthat,incasesinvolving commodityproductswherepriceͲcompetitivenonsubjectimportsareasignificantfactorin theU.S.market,theCourtwillrequiretheCommissiontogivefullconsideration,with adequateexplanation,tononͲattributionissueswhenitperformsitscausationanalysis. 138 Thequestionofwhetherthematerialinjurythresholdforsubjectimportsissatisfied notwithstandinganyinjuryfromotherfactorsisfactual,subjecttoreviewunderthe substantialevidencestandard.Congresshasdelegatedthisfactualfindingtothe Commissionbecauseoftheagency’sinstitutionalexpertiseinresolvinginjuryissues.139
136Mittal,542F.3dat875Ͳ79. 137Mittal,542F.3dat873(quotingGeraldMetals,132F.3dat722),875Ͳ79&n.2 (recognizingtheCommission’salternativeinterpretationofBratskasaremindertoconductanonͲ attributionanalysis). 138Tothatend,aftertheFederalCircuitissueditsdecisioninBratsk,theCommissionbegan topresentpublishedinformationorsendoutinformationrequestsinthefinalphaseof investigationstoproducersinnonsubjectcountriesthataccountedforsubstantialsharesofU.S. importsofsubjectmerchandise(if,infact,therewerelargenonsubjectimportsuppliers).Inorder toprovideamorecompleterecordfortheCommission’scausationanalysis,theserequeststypically seekinformationoncapacity,production,andshipmentsoftheproductunderinvestigationinthe majorsourcecountriesthatexporttotheUnitedStates.TheCommissionplanstocontinueutilizing publishedorrequestedinformationinthefinalphaseofinvestigationsinwhichtherearesubstantial levelsofnonsubjectimports. 139Mittal,542F.3dat873;Nippon,458F.3dat1350,citingU.S.Steel,96F.3dat1357;S. Rep.96Ͳ249at75(“ThedeterminationoftheITCwithrespecttocausationis...complexand difficult,andisamatterforthejudgmentoftheITC.”). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 37 of 218
30B. ConditionsofCompetitionandtheBusinessCycle
Thefollowingconditionsofcompetitioninformouranalysisofwhetherthereis materialinjurybyreasonofsubjectimports.
- DemandConsiderations
DemandforIMTDCsisderivedfromdemandinthevarioussectorsinwhichtheyare used,includingheating,ventilation,andairconditioning(“HVAC”);mining;upstreamoiland gas;buildingandroadconstruction;forestryandlogging;materialhandling;andgeneral industrialandagriculturalsectors.140Asdiscussedabove,IMTDCsareincorporatedintoa widerangeofmachineryandequipment,suchaspumpjacks,crushersandmixers, conveyorsystems,fansandblowers,pumps,andcompressors. 141Questionnaire respondentsreportedfewsubstitutesforIMTDCs,andtheyreportedthatIMTDCsgenerally accountforasmallshareofthecostofthedownstreamproductsinwhichtheyare utilized. 142 UnfinishedIMTDCsareprimarilyusedintheproductionoffinishedIMTDCs,sothe marketforunfinishedIMTDCsisprimarilycomprisedoffirmsthatfinishIMTDCs. 143 FinishedIMTDCsgenerallyaresoldtoeitherOEMsthatmanufacturemachineryor distributorsthattypicallyresellthemtosmallOEMsorinthereplacementpartsmarket.144 Ofthe24purchaserssubmittingusablequestionnairedataintheseinvestigations,16are distributorsthatselltoawidevarietyofOEMsandotherindustrialcustomers,including materialhandlingequipmentmanufacturers,andmembersoftheHVAC,agricultural, generalmanufacturing,mining,petrochemicals,foodprocessing,automotive,andoiland gasindustries. 145Eightoftherespondingpurchasersareendusersthatproducevarious
140CRatIIͲ1;PRatIIͲ1.Petitionerestimatedthatthesharesofthevarioussectorsinthe overallU.S.beltdrivesmarketareasfollows:generalindustrial(percent);airhandling( percent);pumpandcompressor(***percent);oilandgas(percent);materialshandling( percent);constructionandagriculture(***percent);andsandandgravel(***percent).CRatIIͲ9; PRatIIͲ7. 141CRatIIͲ1;PRatIIͲ1.Theoilindustryisasignificantuseroflargesheavesinupstream applicationssuchasdrilling.Inmaterialhandlingapplications,conveyorpulleysareusedin applicationssuchasmining,productpackaging,foodprocessing,powergeneration,andrecycling. Intheagriculturalsector,sheavesandbeltdrivesareusedinequipmentrangingfromcombinesand harvesterstoconveyorbelts,whereasinHVACapplicationsIMTDCsareoftenusedtotransmit powerfromamotortoafan.Flywheelsmaybeusedwithapumpjackintheoilindustryorin elevators.CRatIͲ32toIͲ34;PRatIͲ28toIͲ31;CR/PRatFiguresIͲ11toIͲ13. 142CRatIIͲ9,IIͲ11;PRatIIͲ7,IIͲ9. 143CRatIͲ31;PRatIͲ28. 144IMTDCusersneedtoreplacebeltsmorefrequentlybutoccasionallyalsoneedtoreplace sheavesthathavewornout.CRatIͲ31;PRatIͲ28. 145CRatIIͲ1toIIͲ2;PRatIIͲ1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 38 of 218
31productsincludingHVAC,refrigeration,conveyorequipment,vibratingscreens,and agriculturalequipment.146 InresponsetotheCommission’squestionregardingdemandtrendsforIMTDCsin theUnitedStatessinceJanuary2013,questionnairerespondentsreportedavarietyof answers,althoughfewreportedthatdemandhadincreasedduringthisperiod. 147 Accordingtoquestionnairedata,apparentU.S.consumption,byvalue,increasedfrom$*** in2013to$in2014,declinedto$in2015(afigurelowerthanin2013),andwas lowerininterim2016($)thanininterim2015($).148
- SupplyConsiderations
ThepartiesagreethattheCommissionisboundbyCommerce’sscope determination, 149whichdefinesthecountryoforiginofsubjectmerchandiseasthelocation wheretheIMTDCswerecast.150DuringthePOI,theU.S.IMTDCsmarketwassuppliedby thedomesticindustry,subjectimports,importsoflargeͲdiameterIMTDCsfromnonsubject sources,andimportsofsmallͲdiameterIMTDCsfromsubjectandnonsubjectcountries. 151 Domesticindustry:Intheseinvestigations,theCommissionissuedU.S.producer questionnairesto233foundries,integratedfirms,andfinishers;thesefirmswereidentified aspotentialU.S.producersofunfinishedand/orfinishedIMTDCsbyTBWinitspetitions, 152
146CRatIIͲ2;PRatIIͲ1. 147CR/PRatTableIIͲ3.Threepurchasersreportedreduceddemandintheenergysector, specificallyIMTDCsforOEMmachinesandsparepartsusedinthecoal,oil,andgasindustries.*** reportedreduceddemandforIMTDCsduetodownturnsincertainsectorsoftheeconomyandthe offshoringofproductionofmachinesthatuseIMTDCs.Purchaserreportedincreasedoverall demandforHVACapplications(becauseofnewhomeconstructionandrepairandreplacementsin olderhomes),andpurchaserreportedgrowingdemandforIMTDCsinmaterialhandling conveyors.CRatIIͲ10toIIͲ11;PRatIIͲ9. 148AsexplainedinourvolumediscussioninsectionVI.Cbelow,werelyprimarilyonvalueͲ basedindicatorsasthebestmeasurefortheproductintheseinvestigations,althoughwealsohave consideredquantityͲbasedindicators(inpieces)whereappropriate.Intermsofpieces,apparent U.S.consumptionincreasedfromin2013toin2014,decreasedtoin2015(afigure higherthanin2013),andwaslowerininterim2016()thanininterim2015(***).CR/PRatTable IVͲ7.Mostfirms(10of11U.S.producers,20of23importers,and18of24purchasers)reported thattheIMTDCmarketisnotsubjecttobusinesscycles.CRatIIͲ9;PRatIIͲ7. 149See,e.g.,Petitioner’sPostconf.Briefat20Ͳ24;Confer.Tr.at75Ͳ77,112Ͳ113;Baldor’s Postconf.BriefatExhibit1atquestion3. 150See,e.g.,81Fed.Reg.75,032(Oct.28,2016);81Fed.Reg.75,037(Oct.28,2016);81Fed. Reg.75,039(Oct.28,2016). 151CR/PRatTableIVͲ7. 152Inthepetitions,TBWidentifiedeightfirmsasproducersofIMTDCsintheUnitedStates: TBW;Goldens’FoundryandMachineCompany(“Goldens”);MartinSprocket;B&B;Baldor;Custom Machine&ToolCo.,Inc.(“Custom”);MaureyManufacturingCorp.(“Maurey”);andTorque Transmission.Petitions,vol.IatExhibit1Ͳ1toIͲ3.***didnotsubmitaquestionnaireresponse,and (Continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 39 of 218
32byinterestedpartiesparticipatingintheseinvestigations,orbyotheravailableindustry sources.153SeventyͲsevenofthesefirmsreportedthattheydonotproduceIMTDCs. 154 FiveintegratedfirmsthatbothcastandfinishIMTDCssubmittedquestionnaireresponses (Bremen,EnDyn,Goldens,MartinSprocket,andTBW).155FivefirmsthatfinishIMTDCsin theUnitedStatesfrompurchasedcastingssubmittedusableU.S.producerquestionnaire responses(B&B,Baldor,HiͲLo,Maurey,andSterling).156157Onefoundry(Waupaca) submittedacompletequestionnaireresponse,andfourU.S.foundriesreportedthatthey wereunabletoprovidecompletequestionnaireresponses(Brillion,GreatLakesCastings, Osco,andTorrance).158
(…Continued) reportedthatitonlymakespulleysfromaluminumandmoldedplastic.CRatIͲ5n.13;PRatIͲ4 n.13. 153CRatIIIͲ1;PRatIIIͲ1;ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ8&n.17; USITCPub.4587at5Ͳ6&n.17;Caterpillar’sPostconferenceBriefat7Ͳ9(alsoarguingthatthereare atleast465foundriescastingironproductsintheUnitedStates). 154CRatIIIͲ1n.1;PRatIIIͲ1n.1. 155CRatIIIͲ1toIIIͲ2;PRatIIIͲ1. 156CRatIIIͲ2;PRatIIIͲ1.InaNovember12,2015submissionallegingthatthepetitions lackedadequatesupportfromthedomesticindustry,Caterpillaridentifiedoverthreedozen possibleU.S.producers,anditsubmittedalistofofitsmajordomesticsuppliersofIMTDCs: .ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ8&n.17;USITCPub.4587at5Ͳ6&n.17. Inthefinalphaseoftheseinvestigations,CaterpillarnotifiedtheCommissionthatwiththemost recentchangeinthescope,theitemsitreportedimportingarenolongerconsideredsubject merchandise.FourofthefirmsthatCaterpillarpreviouslyhadidentifiedasitsmajordomestic suppliersoffinishedIMTDCs()reportedthattheydonotproduceIMTDCs,andofthefirms ()didnotrespondtothequestionnaire.CRatIIIͲ1toIIIͲ2atn.1;PRatIIIͲ1n.1. 157BothpetitionerandChineseRespondentsquestionedtheU.S.producerquestionnaire responseofasinconsistentwithotherreportedinformation.Aspetitionerargued, manufacturescertainflywheelswithringgearthatcorrespondtoitemsthatnowareexpressly outsidetheinvestigations’scope,andthecustomersthatidentifiedasaccountingforalarge majorityofitssalesarenotpurchasingU.S.ͲproducedIMTDCs.Inthefinalreport,dataforthisfirm arenotincludedinthedomesticindustrydatabasebasedoninformationindicatingthatthefirm doesnotmanufacturethedomesticlikeproduct.CRatIIIͲ2n.2;PRatIIIͲ1n.2;Petitioner’s PosthearingBriefatExhibit1at10Ͳ11;Petitioner’sPrehearingBriefat38Ͳ40;ChineseRespondents’ PrehearingBriefat26. 158CRatIͲ4,IIIͲ2toIIIͲ3;PRatIͲ4,IIIͲ1toIIIͲ2.InaNovember12,2015submissionalleging thatthepetitionslackedadequatesupportfromthedomesticindustry,Baldoridentifiedseven additionalU.S.foundriesmanufacturingunfinishedIMTDCsandonefinisher.Confidential PreliminaryViews,EDISDoc.571266at5Ͳ8&n.17;USITCPub.4587at5Ͳ6&n.17.Oftheseven firmsidentifiedbyBaldorasmajordomesticsuppliersofunfinishedIMTDCs,,afirmthat accountedfor***percentofBaldor’spurchasesofunfinishedIMTDCsin2015,supplieda completedU.S.producerquestionnairetotheCommission.CRatIIIͲ1n.1;PRatIIIͲ1n.1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 40 of 218
33PetitionerandChineseRespondentsarguedthatWaupaca’sU.S.producer questionnairedataareanomalous. 159Waupacareportedthatitsfoundryproducedof castingsin2015,lessthanpercentofwhichitbelievedcorrespondedtotheIMTDCsat issueintheseinvestigations. 160BecauseWaupaca’squestionnaireresponseisbelievedto beoverstatedbytheinclusionofproductsthatareoutsidethedomesticlikeproduct definition, 161itsdataandotherfirmͲspecificinformationarenotaggregatedwiththe domesticindustry’sdatainthebodyoftheCommission’sreport,althoughWaupaca’s unfinishedIMTDCsthatwerefinishedbyarereflectedinthedomesticindustry’sdataas finishedIMTDCs.162Thus,theavailableinformationonthedomesticindustry’soperations forourfinaldeterminationsisbasedonthequestionnaireresponsesof10producersthat areestimatedtohaveaccountedforapproximatelytwoͲthirdsofU.S.unfinishedIMTDC productionandapproximately90.0percentofU.S.productionoffinishedIMTDCsin 2015. 163 Thedomesticindustryaccountedforbetweenpercentandpercentofthe U.S.market,byvalue,andalmost,bypieces,betweenJanuary2013andJune2016. 164 Thedomesticindustryincludesfoundries,finishers,andsomefirmswithintegrated operationsthatmanufacturebothunfinishedandfinishedIMTDCs,asdiscussedabove. 165 Subjectimports:AsexplainedinmoredetailinourthreatdiscussioninsectionVII below,informationontheindustriesproducingIMTDCsinthesubjectcountriesisprimarily basedonforeignproducerquestionnairedataforoneformerproducerinCanada(Baldor Canada)166andsevenproducersofIMTDCsinChina, 167assupplementedwithother availablerecordevidence.U.S.producerBaldorpermanentlyclosedtheIMTDCsprocessing facilityofitsaffiliateinChina(BaldorMaska)inDecember2014anddisposedofallofthe equipment.168BaldorcloseditsIMTDCsfinishingfacilityinCanada(BaldorCanada)inMay 2016andtransferredallofthefinishingequipmentfromthisfacilitytoitsproduction facilitiesinNorthCarolina. 169
159Petitioner’sPosthearingBriefatExhibit1at50Ͳ52;Petitioner’sPrehearingBriefat36Ͳ38; ChineseRespondents’PrehearingBriefat24Ͳ25. 160CRatIIIͲ2;PRatIIIͲ1toIIIͲ2. 161OfthetoptenfirmsthatWaupacaidentifiedasitsmainunfinishedIMTDCcustomers, threefirms()reportedthattheydonotpurchaseIMTDCscorrespondingtothedomesticlike productdefinition.Inaddition,anotherfirm()doesnotlikelymanufacturethedomesticlike productbasedonareviewofthefirm’swebpages,and***reportedsourcingIMTDCsonlyfrom U.S.finishersandnotfromcastingoperations.CRatIͲ4,IͲ7toIͲ8,IIIͲ2toIIIͲ3atn.3;PRatIͲ4,IͲ5to IͲ6,IIIͲ1toIIIͲ2atn.3. 162CRatIIIͲ2;PRatIIIͲ2. 163CRatIIIͲ1;PRatIIIͲ1. 164CR/PRatTableIVͲ7. 165CR/PRatTableIIIͲ1. 166CRatVIIͲ3;PRatVIIͲ3. 167CRatVIIͲ11;PRatVIIͲ7. 168Confer.Tr.at22;CR/PRatTableIIIͲ3. 169CRatVIIͲ4;PRatVIIͲ3. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 41 of 218
34CumulatedsubjectimportsaccountedforapproximatelyoftheU.S.marketby valueandbypiecesduringthePOI.LargeͲdiametersubjectimportsfromChinaaccounted formostoftheimportsofsubjectmerchandise,withlargeͲdiameterIMTDCsfromCanada accountingforasmallershareintermsofbothvalueandpieces.170 Nonsubjectimports:Intheseinvestigations,nonsubjectimportsincludeimportsof largeͲdiameterIMTDCsfromnonsubjectsourcesandimportsofoutͲofͲscope smallͲdiameterIMTDCsfromsubjectandnonsubjectcountries.Nonsubjectimportsof largeͲdiameterIMTDCsaccountedforbetweenpercentandpercentofapparent U.S.consumption,byvalue,betweenJanuary2013andJune2016,whereasimportsof smallͲdiameterIMTDCsfromsubjectandnonsubjectcountriesaccountedforbetween percentandpercentofthemarket,byvalue,duringthisperiod. 171Mexicowasone ofthelargestreportedsourcesofnonsubjectimportsofIMTDCs,accountingin2015for percentoftotalU.S.importsoflargeͲdiameterIMTDCs,byvalue,percentoftotalU.S. importsofsmallͲdiameterIMTDCs,andpercentoftotalU.S.importsofIMTDCs. 172 TBWhasanaffiliatethatmanufacturesIMTDCsinMexico,its***.173
- Substitutability
Importersofsubjectmerchandisereportedimportingfinishedandunfinished IMTDCsfrombothCanadaandChina,andthedomesticindustryalsoreportedU.S. shipmentsofbothunfinishedandfinishedIMTDCs. 174Allrespondingdomesticproducers, nearlyallrespondingimporters,andmostrespondingpurchasersreportedthatlargeͲ diameterIMTDCsfromCanada,China,andtheUnitedStatesarealwaysorfrequently interchangeable.175 TheCommissionaskedpurchaserstoreportthetopthreefactorsconsideredintheir purchasingdecisionsforIMTDCs.Purchaserscitedqualitymostfrequentlyasthemost importantfactor(7firms),followedbyprice(5firms),whereaspricewasthemost frequentlyreportedsecondͲandthirdͲmostimportantfactor(7firmseach).176Purchasers alsoreportedthat“qualitymeetsindustrystandards,”“availability,”“productconsistency,” “reliabilityofsupply,”and“deliverytime”wereimportantfactorsintheirpurchasing decisions. 177AmajorityoffirmsreportedthatnonͲpricedifferencesbetweenlargeͲ
170CR/PRatTableIVͲ7. 171Intermsofpieces,nonsubjectimportsoflargeͲdiameterIMTDCsaccountedforbetween percentandpercentofapparentU.S.consumption,whereasimportsofsmallͲdiameter IMTDCsfromsubjectandnonsubjectcountriesaccountedforbetweenpercentandpercent ofthemarketduringthisperiod.CR/PRatTableIVͲ7. 172CRatIVͲ8;PRatIVͲ6. 173CR/PRatTableIIIͲ1n.4(notingthat***). 174CRatIVͲ15;PRatIVͲ10(alsonotingthatunfinishedIMTDCsaccountedforaverysmall share(***percent)ofU.S.importers’U.S.shipments). 175CR/PRatTableIIͲ9. 176CR/PRatTableIIͲ5. 177CR/PRatTableIIͲ6. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 42 of 218
35diameterIMTDCsmanufacturedintheUnitedStates,Canada,andChinaweresometimesor neversignificantfactorsintheirsalesorpurchases.178 Majoritiesorpluralitiesofpurchasersfoundthedomesticlikeproducttobe comparablewithsubjectimportsfromCanadaforeachof14nonͲpricecharacteristics,the domesticlikeproductandsubjectimportsfromChinatobecomparableforeightofthe14 characteristics,andsubjectimportsfromCanadaandChinatobecomparablefornineof the14characteristics.179MostrespondingpurchasersreportedthatlargeͲdiameterIMTDCs manufacturedintheUnitedStates,Canada,andChinaalwaysorusuallymeetminimum qualityspecifications. 180Basedontherecord,wefindahighdegreeofsubstitutability amongIMTDCsmanufacturedintheUnitedStatesandIMTDCsimportedfromCanadaand China.181
- PurchasingBehavior
IntheU.S.market,IMTDCsaresoldthroughcataloguesandaresometimescustom manufacturedtoorder.182MostfirmsreportedsellingIMTDCsinthespotmarketorunder shortͲtermcontracts.183Questionnairerespondentsreportedsettingpricesthrough transactionͲbyͲtransactionnegotiations,contracts,andsetpricelists,andsomereported offeringquantitydiscounts,totalvolumediscounts,ormultipliersappliedtopricelistsor otherdiscountstructures. 184
178CR/PRatTableIIͲ11. 179CR/PRatTableIIͲ8. 180CR/PRatTableIIͲ10. 181CRatIIͲ12;PRatIIͲ10. 182CRatVͲ4;PRatVͲ3. 183CRatVͲ6;PRatVͲ4. 184CR/PRatTableVͲ1;CRatVͲ4,VͲ5;PRatVͲ4,VͲ5. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 43 of 218
36
- RawMaterials
RawmaterialcostsaccountedforasizableshareofthetotalCOGStoproduce IMTDCs. 185Pigiron,scrapiron,andferrousscrapmetalaretheprincipalrawmaterialsused tomanufactureIMTDCs,andelectricityandnaturalgasareprimarysourcesofenergyfor theproductionprocess. 186Pigironandscrappriceswererelativelystablein2013andinto 2014,fellinlate2014and2015,andwerehigherin2016. 187Electricitypriceswere generallystable,whereasnaturalgaspriceswerestableinmostof2013,increasedsharply latein2013andearly2014,anddeclinedthroughJune2016.188
C. VolumeofSubjectImports
Section771(7)(C)(i)oftheTariffActprovidesthatthe“Commissionshallconsider whetherthevolumeofimportsofthemerchandise,oranyincreaseinthatvolume,either inabsolutetermsorrelativetoproductionorconsumptionintheUnitedStates,is significant.” 189 WerelyprimarilyonvalueͲbasedindicatorsasthebestmeasurefortheproductin investigationssuchasthese,whichinvolvealargegroupingofitemsdifferinggreatlyinsize, characteristics,applications,andprice.190Whilepetitionerarguedinthefinalphaseof theseinvestigationsthatweightoffersabettermeasureforIMTDCs, 191wedonotrelyon weightͲbasedindicatorsinthesedeterminations.Notallperformanceindicatorsare amenabletomeasurementbyweightintheseinvestigations,andnotallquestionnaire
185Foralldomesticproducers,rawmaterialsasashareofCOGsincreasedfrompercent ofCOGSin2013topercentin2015,whereastheratioforfirmswithcastingandintegrated castingandfinishingoperationsincreasedfrompercentin2013topercentin2015andthe ratioforfirmswithonlyfinishingoperationsdeclinedfrompercentin2013topercentin 2015.CRatVͲ1;PRatVͲ1;CR/PRatTableVIͲ1,TableVIͲ3,andTableVIͲ5. 186CRatVͲ1;PRatVͲ1. 187CRatVͲ1;PRatVͲ1;CR/PRatFigureVͲ1. 188CRatVͲ1;PRatVͲ1;CR/PRatFigureVͲ2. 18919U.S.C.§1677(7)(C)(i). 190See,e.g.,DiamondSawbladesandPartsThereoffromChina,Inv.No.731ͲTAͲ1092 (Review),USITCPub.4559at12n.64(Sept.2015);PreliminaryConfidentialViews,EDISDoc.571266 at37n.133;USITCPub.4587at24n.133.WerecognizethatCommercefoundthatsubjectimports wereunfairlytraded,andareotherwisemindfulofthelimitationsofusingvalueratherthan quantitymeasures,suchasthedifficultyindeterminingwhetherchangesinvaluearecausedby changesinproductmixorprice.Therefore,wealsoconsideredquantitydatabasedonpieces, whereappropriate.Wereachthesameconclusionsregardlessofwhichmeasureisused.Wealso notethatthepetitionsinitiallycalculatedmarketsizeandsharebyvalue.Petitions,vol.IatExhibit IͲ15. 191Petitioner’sPosthearingBriefatExhibit1at40Ͳ41;HearingTr.at70Ͳ71,115Ͳ116 (Pickard). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 44 of 218
37respondentsmaintainrecordswithweightdata.192Wefurtherfindthatpetitioner’s analysisofweightͲbasedmarkettrendsinitsprehearingbriefisunreliable.193 ThevalueofU.S.shipmentsofcumulatedsubjectimportsfromCanadaandChina increasedfrom$42.2millionin2013to$44.1millionin2014,declinedto$40.2millionin 2015,andwaslowerininterim2016($15.6million)thanininterim2015($21.0million). 194 Thevalueofthedomesticindustry’sU.S.shipmentsofthedomesticlikeproductincreased from$***in2013to$in2014,declinedto$in2015,andwaslowerininterim2016 ($)thanininterim2015($).195Thus,thevalueofthedomesticindustry’sU.S.
192Thequestionnairesforthefinalphaseoftheseinvestigationsonlysoughtweightdatafor U.S.importers’importsandfordomesticandforeignproducers’capacityandproduction.Evenso, importersthatreportedtheirimportsintermsofvalueandpieces(particularlyimportersoflargeͲ diameterIMTDCsfromChinaandimportersoflargeͲandsmallͲdiameterIMTDCsfromnonsubject sources)wereunabletoreporttheirimportsbyweightbecausetheydonotkeeprecordsbyweight. ThequestionnairesdidnotrequestweightdatawithrespecttoU.S.shipmentsorinventoriesfrom domesticproducersorU.S.importers,althoughpartieswereaskedforfeedbackonwhetherthe questionnairesshouldcollectinventorydatabyvalueorbyquantity.Initscommentsonthedraft questionnairesforthefinalphaseoftheseinvestigations,petitionerrespondedasfollows: TBWood'sbelievesthatinventorydatashouldbecollectedintermsofquantity.Thegoods subjecttotheseinvestigationscomeinavarietyofformsandsizes,andthereforethereare significantvariationsinthepriceperpieceofthesegoods.Accordingly,valuedataalone wouldprovideonlyalimitedunderstandingofthetruesizeofinventory.Nonetheless,TB Wood'sbelievesthatcollectinginventorydataonthebasisofquantityandvaluewould providetheCommissionwiththemostcomprehensivepictureandthussuggeststhatboth quantityandvaluedatabecollected. Petitioner’sCommentsonDraftQuestionnaires,EDISDoc.584552at3(emphasisadded).Inother words,petitionercouldhaveaskedatthisjuncturefortheCommissiontoseekweightdatafor inventories(orotherindicatorssuchasU.S.shipments),butonlydiscussedcollectingvalueand quantitybypieces. 193PetitionerestimatedU.S.shipmentsbyweightforthedomesticindustryandimporters bymultiplyingthenumberofpiecesshippedbyitsestimateoftheindustryaverageweightperpiece produced.Petitioner’sPrehearingBriefatExhibit4.DuetothediverseproductmixofIMTDCs, however,theaverageweightperpieceproducedvarieswidelybetweenfirmsandcanevenvary widelybetweenquartersforthesamefirm,makingsuchaveragesanunreliablebasisonwhichto extrapolatedata.Compoundingtheseconcerns,petitionerpredicateditsanalysisondomestic producers’finishingoperations,eventhoughtheseoperationsutilizedavaryingmixtureof*** unfinishedIMTDCs,asnotedabove.Additionally,petitionerbaseditsanalysisoncertaindata availableatthetimeoftheprehearingreport,beforethesedataweresupplementedwithadditional questionnaireresponsesandadjustedtoremoveinformationthatdidnotcorrespondtotheIMTDC productsatissue.ConfidentialWorksheet,EDISDoc.No.594857. 194Intermsofpieces,U.S.shipmentsofcumulatedsubjectimportsincreasedfrom 1,319,110in2013to1,405,280in2014,declinedto1,349,482in2015,andwerelowerininterim 2016(521,554)thanininterim2015(695,379).CR/PRatTableIVͲ6. 195Intermsofpieces,thedomesticindustry’sU.S.shipmentsincreasedfromin2013to in2014,declinedtoin2015,andwerelowerininterim2016()thanininterim2015 (***).CR/PRatTableIVͲ6. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 45 of 218
38shipmentsofthedomesticlikeproductandthevalueofU.S.shipmentsofcumulated subjectimportsfromCanadaandChinafollowedsimilartrajectories,i.e.,increasingfrom 2013to2014anddecliningbetween2014and2015;bothwerelowerin2015thanin2013 andwerelowerininterim2016thanininterim2015. 196197 Cumulatedsubjectimports’shareofapparentU.S.consumptiononavaluebasis decreasedfrompercentin2013topercentin2014,increasedtopercentin 2015,andwaslowerininterim2016(percent)thanininterim2015(percent).198 Overall,cumulatedsubjectimports’shareofapparentU.S.consumption,byvalue, increasedonlypercentagepointsbetween2013and2015,andtheirmarketsharein interim2016waslowerthanininterim2015.Whilecumulatedsubjectimports’market sharewasgenerallysteady(2013to2015)orlower(ininterim2016thanininterim2015), thedomesticindustry’smarketshare,byvalue,increasedpercentagepointsbetween 2013and2015(frompercentin2013and2014topercentin2015),andwas percentagepointshigherininterim2016(percent)thanininterim2015( percent).199 Theratio,bypieces,ofimporters’U.S.shipmentsofcumulatedsubjectimportsto thedomesticindustry’sU.S.productiondeclinedfrompercentin2013topercentin 2014,increasedto***percentin2015,andwaslowerininterim2016(***percent)thanin interim2015(***percent).200 Wefindthatthevolumeofcumulatedsubjectimportsissignificantonanabsolute basisandrelativetoapparentU.S.consumptionandproduction.Asdiscussedbelow,
196Intermsofpieces,trendsfollowedsimilartrajectoriesforbothgroups:increasingfrom 2013to2014anddecliningfrom2014to2015,andbothwerelowerininterim2016thanininterim 2015.CR/PRatTableIVͲ6. 197Petitionerargues,andChineseRespondentsconcede,thatU.S.shipmentsofcumulated subjectimportswerelowerininterim2016thanininterim2015atleastinpartduetothefilingof thepetitions.Petitioner’sPosthearingBriefat5;HearingTr.at135(Grimson).Nevertheless,the observedvolumepatternsareconsistentwithlowerlevelsofapparentU.S.consumptionininterim 2016thanininterim2015andwithourobservationthatthevolumeofcumulatedsubjectimports generallytrackedapparentU.S.consumptiontrendsbetween2013and2015. 198CR/PRatTableIVͲ7.Intermsofpieces,cumulatedsubjectimports’shareofapparent U.S.consumptionwassteadythroughoutmostoftheperiod,withlittlechangeuntilinterim2016, increasingincrementallyfrompercentin2013topercentin2014andpercentin2015. Bycontrast,theirmarketshare,bypieces,wasconsiderablylowerininterim2016(percent) thanininterim2015(percent).Overall,cumulatedsubjectimports’shareofapparentU.S. consumption,bypieces,increasedpercentagepointsfrom2013to2015andwas percentagepointslowerininterim2016thanininterim2015.CR/PRatTableIVͲ7. 199CR/PRatTableIVͲ7.Intermsofpieces,thedomesticindustry’smarketsharewasfairly steadythroughouttheperiodwithlimitedchanges;itincreasedfrompercentin2013to percentin2014,declinedtopercentin2015,andwaslowerininterim2016(percent) thanininterim2015(percent).Overall,thedomesticindustry’smarketshare,bypieces, decreasedpercentfrom2013to2015andwaspercentlowerininterim2016thanin interim2015.CR/PRatTableIVͲ7. 200CR/PRatTableIVͲ2. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 46 of 218
39however,wedonotfindthatcumulatedsubjectimportshadsignificantpriceeffectsor impactonthedomesticindustry.
D. PriceEffectsoftheSubjectImports
Section771(7)(C)(ii)oftheTariffActprovidesthat,inevaluatingthepriceeffectsof thesubjectimports,theCommissionshallconsiderwhether
(I)therehasbeensignificantpriceundersellingbytheimportedmerchandise ascomparedwiththepriceofdomesticlikeproductsoftheUnitedStates, and (II)theeffectofimportsofsuchmerchandiseotherwisedepressespricestoa significantdegreeorpreventspriceincreases,whichotherwisewouldhave occurred,toasignificantdegree.201
Asexplainedabove,therecordindicatesthatthereisahighdegreeof substitutabilitybetweensubjectimportsandthedomesticlikeproductandthatpriceisone ofseveralfactorsthatpurchasersconsiderinpurchasingdecisions.Theyrankedavailability, productconsistency,qualitystandards,andreliabilityofsupplyasmoreimportanttotheir purchasingdecisionsthanprice.202 Afterseekinginputfromthepartiesonthepricingproducts, 203theCommission soughtquarterlydataonthetotalquantityandf.o.b.valueofsixIMTDCproductsfrom domesticproducersandU.S.importers.204AtthesuggestionofTBW,theCommission
20119U.S.C.§1677(7)(C)(ii). 202CR/PRatTableIIͲ6. 203InitsPreliminaryViews,theCommissioninvitedthepartiesintheircommentsonthe draftquestionnairesforthefinalphaseoftheseinvestigationstosuggestpricingproductsthat wouldlikelyprovidebettercoverageandthatwouldlikelygeneratepricingobservationsforthe domesticlikeproductandsubjectimportsfromCanadaandChina.PreliminaryViews,EDISDoc. 571266at70;USITCPub.4587at45.Basedoninformationprovidedbythepetitionerinits commentsonthedraftquestionnaires,theCommission’sstaffselectedthefivelargestͲvolume productsforTBWandMartinSprocketaswellasasixthproduct(product1)***.CRatVͲ8n.11;PR atVͲ6n.11. 204CRatVͲ8;PRatVͲ6.Product1isanarrow“3V”groovesheave,witha6.0inchoutside diameterandthreegrooves,suitableforusewithaTypeSDSbushing.Product2isanarrow“5V” groovesheave,witha23.6Ͳinchoutsidediameterandeightgrooves,suitableforusewithaTypeJ bushing.Product3isanarrow“5V”groovesheave,witha50Ͳinchoutsidediameterandsix grooves,suitableforusewithaTypeMbushing.Product4isanarrow“5V”groovesheave,witha 50Ͳinchoutsidediameterandeightgrooves,suitableforusewithaTypeMbushing.Product5isa TypeEbushing,witha3Ͳ3/8Ͳinchbore.Product6isaTypeFbushing,witha3Ͳ3/8Ͳinchbore.CRat VͲ8;PRatVͲ6.Thesepricingproductsdifferfromthoseinthepreliminaryphaseofthese investigationsandincludebushings,whichwerenotamongthepricingitemsinthepreliminary phaseoftheinvestigations,aswellassheaves.CRatVͲ8n.11;PRatVͲ6n.11. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 47 of 218
40requestedthatquestionnairerespondentssegregatetheirsalestodistributorsfromtheir salestoendusers/OEMs.205Fourdomesticproducersand11importersofsubject merchandiseprovidedusabledata,althoughnotallfirmsreportedpricingdataforall productsforallquarters.206 Asindicatedearlier,IMTDCsaremanufacturedinamultitudeofshapes,sizes, weights,andgrooveconfigurations. 207TBW’sownproductcatalogueadvertises“closeto 20,000”stockkeepingunits(“SKUs”).208In2015,reportedpricingdataaccountedfor approximately0.6percentofthedomesticindustry’sU.S.shipmentsofIMTDCs(smallͲand largeͲdiameter),1.7percentofU.S.shipmentsofsubjectimportsfromCanada,and0.9 percentofU.S.shipmentsofsubjectimportsfromChina. 209Incasesinvolvinghighlyvaried productssuchasthis,itisunlikelythatpricingdatacoveragewillbeextensive.210Indeed, althoughcoveragewaslimitedonapercentagebasis,petitionerconcedesthatthepricing datacollectedintheseinvestigationsare“meaningful,”“rocksolid,”and“representative” ofcompetitionintheU.S.market.211 Basedonthesepricingdata,cumulatedsubjectimportsfromCanadaandChina undersoldthedomesticlikeproductthroughoutthePOIforsalestodistributorsandend users/OEMsandfortransactionsinvolvingsheavesaswellasbushings.Pricesfor cumulatedsubjectimportsfromCanadaandChinawerelowerthanpricesforthedomestic likeproductin217of228instances,involvinganaggregatequantityof36,831pieces.212
205CRatVͲ8;PRatVͲ6;Petitioner’sCommentsonDraftQuestionnairesfortheFinalPhase oftheInvestigations,EDISDoc.584552. 206CRatVͲ8toVͲ9;PRatVͲ6. 207See,e.g.,CRatIͲ19toIͲ20;PRatIͲ17toIͲ18. 208Confer.Tr.at39(Pickard),65(DeFrancesco). 209CRatVͲ8toVͲ9;PRatVͲ6. 210See,e.g.,KernͲLiebersUSA,Inc.v.UnitedStates,19CIT87,114Ͳ15(1995). 211See,e.g.,HearingTr.at38Ͳ39(Pickard)(referringtotheavailablepricingcomparisonsas “meaningfuldata”);HearingTr.at49(Pickard)(“Andyouknowthatevenwhenit’sunderͲreported yourpricingproductdataisspoton.You’vegotsixveryspecificdefinitionsthroughtwodifferent channelsofcommunicationthatyouendupgetting228comparisons.Idon’tthinkanyofthat’s beencalledintoquestion.That’srocksolid.”);HearingTr.at51(Pickard)(“…whenyouhavea domesticindustrythatliterallyhastensofthousandsofSKUs,it’snotsurprisingthatpricing productsaren’tgoingtobebroad;they’rerepresentative.They’reexamplesofwhat’sgoingon.”). 212CR/PRatTableVͲ2toVͲ7andTableVͲ9;CRatVͲ28toVͲ30;PRatVͲ10.Forsalesto distributors,subjectimportswerepricedbelowpricesofthedomesticlikeproductin120of126 instances(22,331pieces)atmarginsof0.1to81.2percent,andsubjectimportpriceswereabove thoseforthedomesticlikeproductinsixinstances(199pieces)atmarginsof0.8to24.7percent. Forsalestoendusers,subjectimportswerepricedbelowthoseforthedomesticlikeproductin97 of102instances(14,500pieces)atmarginsof8.4to84.8percent),andsubjectimportswerepriced abovethoseforthedomesticlikeproductinfiveinstances(54pieces)atmarginsof2.6to57.9 percent.Forsheaves(products1Ͳ4),subjectimportpriceswerebelowdomesticlikeproductprices in105of116instances(12,336pieces)atmarginsof0.1to84.8percent,andsubjectimportswere pricedabovethoseforthedomesticlikeproductin11instances(253pieces)atmarginsof0.8to (Continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 48 of 218
41Marginsofundersellingrangedfrom0.1to84.8percent.Intheremaining11instances, involvinganaggregatequantityof253pieces,pricesforsubjectimports(allofwhich involvedIMTDCsimportedfromChina)werebetween0.8and57.9percenthigherthan pricesofthedomesticlikeproduct.213 Thesepricingcomparisonsdemonstratepervasiveundersellingbysubjectimports. Therecord,however,revealsnosignificanteffectsasaresultofthisunderselling.214Asthe volumedatadiscussedabovedemonstrate,therecorddoesnotshowanysignificantmarket shareshiftfromthedomesticindustrytosubjectimportsduringthePOI.Infact,as measuredbyvalue,thedomesticindustryincreaseditsmarketshareoverthePOI. 215 Moreover,therecorddoesnotshowsignificantpricedepressionorsuppressioncausedby subjectimports,aselaboratedbelow. WefindthatcumulatedsubjectimportsfromCanadaandChinadidnotdepress pricesofthedomesticlikeproducttoasignificantdegree.Pricesofdomesticallyproduced IMTDCsshowednocleartrendduringthePOI,withpricesforfiveproductstoend users/distributorsincreasingbymarginsofpercenttopercent,andpricesforsix productstoendusers/distributorsdecreasingbetweenpercentandpercent.216 Indeed,reportedU.S.shipmentsandpricesofthedomesticproductactuallyincreasedover thePOIforsomepricingproducts,notwithstandingundersellingbycomparableorlarger volumesofsubjectimportsforthoseproducts. 217Thedomesticindustry’spricesforsome
(…Continued) 57.9percent.Forbushings(products5Ͳ6),subjectimports’priceswerebelowthoseofthedomestic likeproductinall112instances(24,465pieces)atmarginsof8.4to52.5percent.Id. 213MostinstancesofoversellingbysubjectimportsfromChinainvolvedproduct3,a relativelyhighͲvalue,lowͲvolumeproduct.CR/PRatTableVͲ9;CRatVͲ28;PRatVͲ10. 214Compare,e.g.,Altx,Inc.v.UnitedStates,26CIT1425,1436Ͳ37(2002)(affirmingfinding thatundersellingwasnotsignificantintheabsenceofadverseeffectscausedbytheunderselling), aff’d,370F.3d1108(Fed.Cir.2004). 215CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,byvalue, increasedfrompercentin2013topercentin2015andwashigherininterim2016(*** percent)thanininterim2015(percent).Asmeasuredinpieces,thedomesticindustry’smarket sharewasfairlysteady.CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare waspercentin2013,percentin2015,andpercentininterim2016).Althoughsome U.S.purchasersreportedshiftingpurchasestosubjectimportsduringtheperiod,thereported quantityofsuchshiftswassmallrelativetoapparentU.S.consumption,andtherecordasawhole doesnotshowthatthedomesticindustrylostmarketsharetosubjectimports.CR/PRatTableVͲ10 andTableVͲ11(confirmingashiftof560piecestosubjectimportsduringtheperiodbyandan unknownquantityby,afirmwhosepurchasesaccountedforpercentoftotalreported purchasesin2015,byvalue,andthatreportedpercentofitspurchasesin2015,byvalue,were fromthedomesticindustry,***percentwerefromChina,percentwerefromCanada,and percentwerefromotherimportsources). 216CR/PRatTableVͲ8. 217See,e.g.,CR/PRatTableVͲ6aandTableVͲ7a.Pricecomparisonsforproducts5and6to distributorsshowundersellingofthedomesticlikeproductbycomparableorlargervolumesof subjectimportsthroughoutthePOI,yetpricesofthedomesticlikeproductandthedomestic (Continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 49 of 218
42ofthepricingproductsfluctuatedsignificantlythroughouttheperiodinwaysthatcannotbe linkedtothesubjectimports. 218Instead,thesefluctuationsareconsistentwiththepricing variabilityidentifiedbymarketparticipants,whichreportedthatpricescanvary substantiallyforthesameproductdependingonfactorssuchasbrand,customer, application,andleadtime.219Basedontherecord,wefindthatcumulatedsubjectimports didnotdepresspricesofthedomesticlikeproducttoasignificantdegree. WealsoconsideredwhethercumulatedsubjectimportsfromCanadaandChina preventedincreasesinpricesofthedomesticlikeproduct,whichotherwisewouldhave occurred,toasignificantdegree.Thedomesticindustry’sratioofCOGStonetsaleswas steadythroughoutmostofthePOI,at***percentin2013,***percentin2014,and ***percentin2015;itwaslowerininterim2016(***percent)thanininterim2015 (***percent).220WenotethattheincreaseintheCOGStonetsalesratioin2015occurred asapparentU.S.consumptiondeclined.Moreover,asdiscussedabove,manyofthepricing productsshowthatthedomesticindustrydidexperiencepriceincreasesduringthePOI. Priceincreasesgenerallywouldnotbeexpectedinaperiodofoveralldeclinesinapparent U.S.consumptionduringwhichtherewerenosubstantialcostincreases. Petitionerarguesthatsubjectimportscausedpricesuppressionbytakingsalesof highͲvolume,lowͲvalueIMTDCsandforcingthedomesticindustrytorelyonlowͲvolume, highͲvaluesales,whichresultedinlowervolumesandincreasedSG&Acostsforthe domesticindustrythatpreventednecessarypriceincreases.221Specifically,petitioner allegesthatSG&Acostsincreasedduetoadditionalmarketingexpensesincurredto competewithsubjectimports, 222yetpetitionerwasunabletodocumentorcorroborate theseallegations. 223Further,therecordcontradictspetitioner’stheorythatthedomestic industrylostsalesvolumeduetocumulatedsubjectimportpricing,becauseduringthePOI therewasnoappreciabledeclineinthedomesticindustry’smarketsharenoran
(…Continued) industry’sreportedU.S.shipmentstodistributorsbypiecesforthesepricingproductsremained relativelysteadyorincreased. 218CR/PRatFigureVͲ4a,VͲ4b,VͲ5a,andVͲ5b,showingtrendsforpricingproducts2and3 toendusersanddistributors.Pricesforthedomesticlikeproductexperiencedsignificant fluctuationsevenwhilepricesforsubjectimportsremainedrelativelysteady. 219CRatVͲ9;PRatVͲ9. 220CR/PRatTableVIͲ1. 221Petitioner’sPosthearingBriefat10Ͳ11,Exhibit1at48Ͳ49;HearingTr.at105,111Ͳ112 (Pickard). 222Petitioner’sPosthearingBriefat10Ͳ11,Exhibit1at48Ͳ49;HearingTr.at105,111Ͳ112 (Pickard). 223See,e.g.,Petitioner’sPosthearingBriefat10(reiteratingargumentsclaimingthat increasesinSG&Aweretheresultofincreasedsalesexpensesyetcitingnorecordevidenceto supportsuchsalesactivities;noexhibitsincludedwiththebriefaddressedallegedadditionalsales expenses). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 50 of 218
43appreciableincreaseinthemarketshareforsubjectimports.224Tothedegreethat petitioner’sargumentreferencessmallͲdiameterIMTDCs,suchimportscorrespondtooutͲ ofͲscopemerchandise,consistentwithpetitioner’srequestedscopeamendment.225For thesereasons,wedonotfindthatcumulatedsubjectimportsfromCanadaandChina preventedincreasesofdomesticlikeproductpricesthatotherwisewouldhaveoccurredto asignificantdegree. Insum,wefindthatcumulatedsubjectimportsfromCanadaandChinadidnothave significanteffectsonpricesofthedomesticlikeproductduringthePOI.
E. ImpactoftheSubjectImports226
Section771(7)(C)(iii)oftheTariffActprovidesthat,inexaminingtheimpactof subjectimports,theCommission“shallevaluateallrelevanteconomicfactorswhichhavea
224CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,byvalue, increasedoverallfrompercentin2013topercentin2015andwashigherininterim2016 (***percent)thanininterim2015(percent),whereassubjectimports’marketshare,byvalue, waspercentin2013,***percentin2015,andlowerin2016(percent)thanininterim2015 (percent).Asmeasuredinpieces,thedomesticindustry’smarketsharewasfairlysteadyduring thePOIandsubjectimports’marketsharewasrelativelysteadybetween2013and2015andlower ininterim2016thanininterim2015.CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’s marketsharewaspercentin2013,percentin2015,andpercentininterim2016, whereassubjectimports’marketsharewaspercentin2013,percentin2015,percent ininterim2015,andpercentininterim2016).Aswefoundabove,althoughsomeU.S. purchasersreportedshiftingpurchasestosubjectimportsduringtheperiod,theconfirmedquantity ofsuchshiftswassmallrelativetoapparentU.S.consumptionandtherecordasawholedoesnot showthatthedomesticindustrylostmarketsharetosubjectimports.CR/PRatTableVͲ10,TableVͲ 11. 225.CR/PRatTableIIIͲ1n.4andTableIIIͲ17. 226ThestatuteinstructstheCommissiontoconsiderthe“magnitudeofthedumping margin”inanantidumpingproceedingaspartofitsconsiderationoftheimpactofimports. 19U.S.C.§1677(7)(C)(iii)(V).Wetakeintoaccountinouranalysisthatinitsfinaldeterminationsof salesatlessvalue,Commerceassignedantidumpingdutymarginsof191.34percenttoBaldor Canada(anadversefactsavailableratebasedonthefirm’snonͲcooperation),100.47percenttoall otherfirmsinCanada,13.64percentto21namedexporter/producercombinationsinChina,and 401.68percenttothePRCͲwideentity.81Fed.Reg.75,039,75,040(Oct.28,2016)(Canada–AD); 81Fed.Reg.75,032,75,038(Oct.28,2016)(China–AD);CR/PRatTableIͲ2andTableIͲ3. CommercedidnotassigndeminimisantidumpingdutymarginstoanyfirminCanadaorChina. Accordingly,forouranalysis,weconsideredallimportsoflargeͲdiameterIMTDCsfromCanadaand allimportsoflargeͲdiameterIMTDCsfromChinaasimportsofsubjectmerchandisethatweresold atlessthanfairvalue.Ouranalysisofpricingofthesubjectimportsandhowsubjectimportpricing affectedthedomesticindustry,describedinthepriceeffectsdiscussionandbelow,isparticularly probativetoourassessmentoftheimpactofcumulatedsubjectimportsonthedomesticindustry’s condition. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 51 of 218
44bearingonthestateoftheindustry.” 227Thesefactorsincludeoutput,sales,inventories, capacityutilization,marketshare,employment,wages,productivity,grossprofits,net profits,operatingprofits,cashflow,returnoninvestment,returnoncapital,abilitytoraise capital,abilitytoservicedebts,researchanddevelopment,andfactorsaffectingdomestic prices.Nosinglefactorisdispositiveandallrelevantfactorsareconsidered“withinthe contextofthebusinesscycleandconditionsofcompetitionthataredistinctivetothe affectedindustry.” 228 WefindthatcumulatedsubjectimportsfromCanadaandChinadidnothavea significantimpactonthedomesticindustryduringthePOI.Asdiscussedabove,apparent U.S.consumptionfluctuatedduringthePOI;itincreasedfrom2013to2014,decreased between2014and2015,andwaslowerininterim2016thanininterim2015. 229Manyof thedomesticindustry’sperformanceindicatorsmirroredthesechangesinapparentU.S. consumptionoverthePOIandarenototherwiseexplainedbytrendsincumulatedsubject imports. Thedomesticindustryincreaseditsproductioncapacityfrom2013to2015, althoughitsproductioncapacitywassomewhatlowerininterim2016thanininterim 2015. 230Intermsofpieces,thedomesticindustry’sproduction,capacityutilization,U.S. shipments,andnetsalesallfollowedasimilartrajectory;theyincreasedfrom2013to2014, decreasedfrom2014to2015,andwerelowerininterim2016thanininterim2015. 231
22719U.S.C.§1677(7)(C)(iii);seealsoSAAat851and885(“Inmaterialinjury determinations,theCommissionconsiders,inadditiontoimports,otherfactorsthatmaybe contributingtooverallinjury.Whilethesefactors,insomecases,mayaccountfortheinjurytothe domesticindustry,theyalsomaydemonstratethatanindustryisfacingdifficultiesfromavarietyof sourcesandisvulnerabletodumpedorsubsidizedimports.”). 22819U.S.C.§1677(7)(C)(iii).ThisprovisionwasamendedbytheTradePreferences ExtensionActof2015,Pub.L.114Ͳ27. 229CR/PRatTableIVͲ6.Byvalue,apparentU.S.consumptionwas$***in2013,$***in 2014,$***in2015,$***ininterim2015,and$ininterim2016.Byquantity,apparentU.S. consumptionwaspiecesin2013,piecesin2014,piecesin2015,piecesininterim 2015,andpiecesininterim2016.CR/PRatTableIVͲ6. 230Productioncapacitywaspiecesin2013,piecesin2014,piecesin2015, piecesininterim2015,andpiecesininterim2016.CR/PRatTableIIIͲ10. 231Thedomesticindustry’sproductioninpieceswasin2013,***in2014,in2015, ininterim2016,andininterim2015.Thedomesticindustry’scapacityutilizationinpieces waspercentin2013,***percentin2014,***percentin2015,***percentininterim2015,and percentininterim2016.CR/PRatTableIIIͲ10.Thedomesticindustry’sU.S.shipments,by value,were$in2013,$in2014,and$in2015,andwerelowerininterim2016($) thanininterim2015($);intermsofpieces,thedomesticindustry’sU.S.shipmentswerein 2013,in2014,andin2015,ininterim2016andininterim2015.CR/PRatTableIVͲ 6.Thedomesticindustry’snetsales,bypieces,werein2013,***in2014,***in2015,in interim2016,andininterim2015.CR/PRatTableVIͲ1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 52 of 218
45Cumulatedsubjectimportsfollowedsimilartrends,232andthedomesticindustry’sshareof apparentU.S.consumptionshowedlittlechangeoverthePOI. 233 SeveralemploymentͲrelatedfactors,suchasPRWs,totalhoursworked,andwages paid,alsoincreasedfrom2013to2014,decreasedbetween2014and2015,andwerelower ininterim2016thanininterim2015.234Productivitydeclinedirregularlybetween2013and 2015,butwashigherininterim2016thanininterim2015. 235 ThedomesticindustrymaintainedarelativelysteadyratioofCOGStonetsales between2013and2015,andthisratiowaslowerininterim2016thanininterim2015.236 Nevertheless,thedomesticindustry’sfinancialperformancewaspoorthroughoutthePOI, althoughitwasbetterininterim2016thanininterim2015.Operatingincomedeclined from2013to2014and***in2015,whereasoperatingincomewashigherininterim2016 thanininterim2015. 237Thedomesticindustry’sratioofoperatingincometonetsales,
232CR/PRatTableIVͲ6.Asnotedabove,petitionerhasarguedthatthelowervolumeand marketshareofcumulatedsubjectimportsininterim2016thanininterim2015weredueatleastin parttothefilingofthepetitionsandnotjustlowerapparentU.S.consumptionininterim2016than ininterim2015.Notwithstandingthis,wenotethatmanyperformanceindicatorsforthedomestic industryalsowerelowerininterim2016thanininterim2015,despitelowervolumesofcumulated subjectimportsduringthisperiod. 233CR/PRatTableIVͲ7.Thedomesticindustry’sinventoriesincreasedoverall,yetitsmarket sharebypieceswasgenerallysteadyorincreasing,underminingpetitioner’sargumentthatthe domesticindustry’sinventoryincreasesresultedfromsaleslosttocumulatedsubjectimports.See, e.g.,CR/PRatTableIIIͲ16(indicatingthatthedomesticindustry’sendͲofͲperiodinventories,in pieces,increasedfromin2013toin2014andin2015andwereininterim2016and ininterim2015);CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,by pieces,increasedfrompercentin2013topercentin2014,decreasedtopercentin 2015,andwaslowerininterim2016(percent)thanininterim2015(percent)). 234ThedomesticindustryemployedPRWsin2013,in2014,in2015,in interim2016,andininterim2015.Totalhoursworkedincreasedfromin2013toin 2014,decreasedtoin2015,andwereininterim2016andininterim2015.Wagespaid increasedfrom$in2013to$in2014,declinedto$in2015,andwere$ininterim 2016and$ininterim2015.Unitlaborcostsincreasedfrom$/piecein2013to$/piecein 2014,$/piecein2015,$/pieceininterim2015,and$/pieceininterim2016.CR/PRat TableIIIͲ18. 235Productivity(piecesper1,000hours)increasedfromin2013toin2014,declined toin2015,andwasininterim2016andininterim2015.Hourlywagesincreasedfrom $/hourin2013to$/hourin2014,and$/hourin2015,andwerehigherininterim2016 ($/hour)thanininterim2015($/hour).CR/PRatTableIIIͲ18. 236CR/PRatTableVIͲ1.Thedomesticindustry’sCOGSasaratiotonetsalesincreased incrementallyfrompercentin2013topercentin2014and***percentin2015,andwas lowerininterim2016(***percent)thanininterim2015(***percent).CR/PRatTableVIͲ1. 237CR/PRatTableVIͲ1.Thedomesticindustry’sgrossprofitincreasedfrom$in2013to $in2014,declinedto$in2015,andwashigherininterim2016($)thanininterim2015 $().Itsoperatingincomedeclinedfrom$in2013to$in2014toin2015,whereas operatingincomewashigherininterim2016($)thanininterim2015($).Thedomestic (Continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 53 of 218
46whichneverexceeded***percent,graduallydeclinedbetween2013and2015butwas higherininterim2016thanininterim2015. 238Thedomesticindustry’scapitalexpenditures decreasedfrom2013to2015butwerehigherininterim2016thanininterim2015. 239The domesticindustry’sR&Dexpensesincreasedfrom2013to2015butwerelowerininterim 2016thanininterim2015. 240 Thesharpestdeclineinthedomesticindustry’sfinancialperformanceoccurred between2014and2015duringaperiodofdecliningapparentU.S.consumption.As consumptiondeclined,thedomesticindustrymaintainedastableorhighermarketshare.241 Subjectimportsdecreasedbetween2014and2015,andtheirmarketsharewasessentially steady.242Thus,therewasnoincreaseinsubjectimportsthatwouldexplainthedeclinesin thedomesticindustry’sfinancialperformancebetween2014and2015;rather,therecord indicatesthatthedomesticindustryexperiencedhigherlaborandSG&Acostsbyunitwhen itreducedoutput(andnetsales)duringthisperiodoflowerapparentU.S.consumption. 243 Asdiscussedabove,therecorddoesnotsupportpetitioner’sallegationsthatthedomestic industryincurredincreasedSG&Aexpensesaftercumulatedsubjectimportstooksalesof highͲvolume,lowͲvalueIMTDCsfromthedomesticindustry.244Thus,therecordindicatesa relationshipbetweenunfavorablechangesintheindustry’scoststructurebetween2014
(…Continued) industry’snetincomedeclinedfrom$in2013to$in2014andin2015,butitsnet incomewashigherininterim2016($)thanininterim2015().CR/PRatTableVIͲ1. 238CR/PRatTableVIͲ1.Thedomesticindustry’soperatingincomemarginwaspercent in2013,***percentin2014,percentin2015,andwashigherininterim2016(percent) thanininterim2015(percent).CR/PRatTableVIͲ1. 239CR/PRatTableVIͲ8.Capitalexpendituresforthedomesticindustrywere$in2013, $in2014,$in2015,$ininterim2015,and$ininterim2016.Thehigherlevelin interim2016islargelyattributableto.CR/PRatTableVIͲ8&n.1. 240CR/PRatTableVIͲ8.R&Dexpensesforthedomesticindustrywere$in2013,$in 2014,$in2015,$ininterim2015,and$ininterim2016. 241Thedomesticindustry’smarketshare,byvalue,increasedfrompercentin2014to percentin2015,anditsmarketshare,bypieces,wasstableatpercentin2014and percentin2015).CR/PRatTableIVͲ7. 242Byvalueandpieces,U.S.shipmentsofsubjectimportswerelowerin2015($40,231,000 and1,349,482pieces)thanin2014($44,129,000and1,405,280pieces).Byvalueandpieces, apparentU.S.consumptionwaslowerin2015($andpieces)thanin2014($and pieces).CR/PRatTableIVͲ6.Subjectimports’marketshare,byvalue,waspercentin2014and percentin2014,andtheirmarketshare,bypieces,waspercentin2014andpercentin 2015.CR/PRatTableIVͲ7. 243Thedomesticindustry’sunitdirectlaborcostsdecreasedfrom$/piecein2013to $/piecein2014,increasedto$/piecein2015,andwerelowerininterim2016($/piece) thanininterim2015($/piece),whichfollowstrendsinapparentU.S.consumption,output,and netsalesforthedomesticindustry.Thedomesticindustry’sunitSG&Aexpensesrosefrom $/piecein2013to$/piecein2014and$/piecein2015,andtheywerelowerininterim 2015($/piece)thaninterim2016($/piece).CR/PRatTableVIͲ1. 244CR/PRatTableIVͲ6. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 54 of 218
47and2015andreductionsinoutputandnetsalesassociatedwithdeclinesinapparentU.S. consumptionandnotcumulatedsubjectimports. Althoughsomeofthedomesticindustry’sfinancialindicators,includingoperating incomeandratioofoperatingincometonetsales,werehigherininterim2016afterthe filingofthepetitionsthanininterim2015,suchimprovementsresultedfromadecreasein thedomesticindustry’sCOGS, 245notanincreaseindomesticshipmentsasaresultofany retreatfromthemarketbycumulatedsubjectimports. 246Thistrendreinforcesthatthe domesticindustry’sfinancialcondition,whetherpoorfinancialperformancefrom2013to 2015orhigherlevelsininterim2016thanininterim2015,wasnottoanysignificantextent afunctionofcumulatedsubjectimports. DuringthePOI,significantvolumesofcumulatedsubjectimportsenteredtheUnited Statesthatweregoodsubstitutesforthedomesticlikeproduct, 247andpricecomparisons indicatethatcumulatedsubjectimportspervasivelyundersoldthedomesticlikeproduct. Nonetheless,thisundersellingdidnotleadtosignificantshiftsinmarketsharesbyvalueor pieces.Aswealsofoundabove,pricingdatashowednoclearcorrelationbetween cumulatedsubjectimportsandthedomesticindustry’sprices.Thedomesticindustrydid notfaceacostͲpricesqueezeandinsteadincreaseditspricesforseveralpricingproducts overthePOIdespitethepresenceofsignificantvolumesofcumulatedsubjectimportsthat undersoldthedomesticlikeproductatsizeablemargins.Basedontherecordandour findingsaboveaboutthelackofcorrelationbetweencumulatedsubjectimportsandthe domesticindustry’sperformance,wefindthatcumulatedsubjectimportsdidnothavea significantimpactonthedomesticindustry.
245Eventhoughthedomesticindustry’snetsaleswerelowerininterim2016($)thanin interim2015($)thanininterim2015($),whichresultedinoperatingincomeof$in interim2016and$ininterim2015.Thus,thedomesticindustry’simprovedfinancial performanceininterim2016comparedtointerim2015wasrelatedtoitslowercosts,andthe domesticindustrydidnotexperienceanyhighersalesassociatedwithalowerlevelofcumulated subjectimportsinthemarketininterim2016thanininterim2015.CR/PRatTableVIͲ1. 246Marketsharesforsubjectimportsbypiecesandvaluewerelowerininterim2016thanin interim2015;marketsharefordomesticshipmentsbypieceswaslowerininterim2016thanin interim2015,althoughmarketsharefordomesticshipmentsbyvaluewasslightlyhigherininterim 2016thanininterim2015;themarketsharefornonsubjectimports(smallͲdiameterimportsfrom allsourcesandlargeͲdiameterIMTDCsfromnonsubjectcountries)washigherintermsofvalueand pieces,andtheincreaseinvaluefornonsubjectimportswasgreaterthanthatfordomestic shipments.CR/PRatTableIVͲ7(indicatingthatnonsubjectimports’marketshare,byvalue,was percentininterim2016andpercentininterim2015andnonsubjectimports’marketshare,by pieces,waspercentininterim2016and***percentininterim2015). 247CR/PRatTableIIͲ9andTableIIͲ10. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 55 of 218
48VII. NoThreatofMaterialInjurybyReasonofSubjectImports
A. LegalStandard
Section771(7)(F)oftheTariffActdirectstheCommissiontodeterminewhetherthe domesticindustryisthreatenedwithmaterialinjurybyreasonofsubjectimportsby analyzingwhether“furtherdumpedorsubsidizedimportsareimminentandwhether materialinjurybyreasonofimportswouldoccurunlessanorderisissuedorasuspension agreementisaccepted.” 248TheCommissionmaynotmakesuchadetermination“onthe basisofmereconjectureorsupposition,”andconsidersthethreatfactors“asawhole”in makingitsdeterminationwhetherdumpedorsubsidizedimportsareimminentand whethermaterialinjurybyreasonofsubjectimportswouldoccurunlessanorderis issued. 249Inmakingourdeterminations,weconsiderallstatutorythreatfactorsthatare relevanttotheseinvestigations. 250
24819U.S.C.§1677(7)(F)(ii). 24919U.S.C.§1677(7)(F)(ii). 250Thesefactorsareasfollows:(I)ifacountervailablesubsidyisinvolved,suchinformation asmaybepresentedtoitbytheadministeringauthorityastothenatureofthesubsidy(particularly astowhetherthecountervailablesubsidyisasubsidydescribedinArticle3or6.1oftheWTO SubsidiesandCountervailingMeasuresAgreement(“WTOSCMAgreement”))andwhetherimports ofthesubjectmerchandisearelikelytoincrease;(II)anyexistingunusedproductioncapacityor imminent,substantialincreaseinproductioncapacityintheexportingcountryindicatingthe likelihoodofsubstantiallyincreasedimportsofthesubjectmerchandiseintotheUnitedStates, takingintoaccounttheavailabilityofotherexportmarketstoabsorbanyadditionalexports;(III)a significantrateofincreaseofthevolumeormarketpenetrationofimportsofthesubject merchandiseindicatingthelikelihoodofsubstantiallyincreasedimports;(IV)whetherimportsofthe subjectmerchandiseareenteringatpricesthatarelikelytohaveasignificantdepressingor suppressingeffectondomesticpricesandarelikelytoincreasedemandforfurtherimports;(V) inventoriesofthesubjectmerchandise;(VI)thepotentialforproductͲshiftingifproductionfacilities intheforeigncountry,whichcanbeusedtoproducethesubjectmerchandise,arecurrentlybeing usedtoproduceotherproducts;(VIII)theactualandpotentialnegativeeffectsontheexisting developmentandproductioneffortsofthedomesticindustry,includingeffortstodevelopa derivativeormoreadvancedversionofthedomesticlikeproduct,and(IX)anyotherdemonstrable adversetrendsthatindicatetheprobabilitythatthereislikelytobematerialinjurybyreasonof imports(orsaleforimportation)ofthesubjectmerchandise(whetherornotitisactuallybeing importedatthetime).19U.S.C.§1677(7)(F)(i).Toorganizeouranalysis,wediscusstheapplicable statutorythreatfactorsusingthesamevolume,price,andimpactframeworkthatappliestoour materialinjuryanalysis.Statutorythreatfactors(I),(II),(III),(V),and(VI)arediscussedinthe analysisofsubjectimportvolume.Statutorythreatfactor(IV)isdiscussedintheanalysisofsubject importpriceeffects.Statutoryfactors(VIII)and(IX)arediscussedintheanalysisofimpact. Statutoryfactor(VII)concerningagriculturalproductsisinapplicableintheseinvestigations,and statutoryfactor(I)doesnotapplyintheinvestigationofimportsfromCanada. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 56 of 218
49B. CumulationforThreat
WemustconsiderwhethertocumulatesubjectimportsfromCanadaandChinafor purposesofouranalysisofthreatofmaterialinjury.Incontrasttocumulationforpurposes ofpresentmaterialinjury,cumulationforanythreatanalysisisdiscretionary.Undersection 771(7)(H)oftheTariffAct,theCommissionmay“totheextentpracticable”cumulatively assessthevolumeandpriceeffectsofsubjectimportsfromallcountriesastowhich petitionswerefiledonthesamedayiftherequirementsforcumulationinthematerial injurycontextaresatisfied. 251 InsectionVabove,wefoundthattherequirementsforcumulatingsubjectimports forourmaterialinjuryanalysisweresatisfied.Forouranalysisofthreatofmaterialinjury, however,wefindthatsubjectimportsfromCanadaandChinaarenotlikelytocompete undersimilarconditionsofcompetitionintheU.S.marketintheimminentfuture.Webase thisconclusiononthefactthatthelargestsourceofsubjectimportsfromCanadaduring thePOI(BaldorCanada)closeditsSt.Claire,QuebecfacilityonMay27,2016andrelocated itsfinishingequipmentfromCanadatotheBaldorfacilitiesinWeavervilleandMarion, NorthCarolina. 252NosuchdisruptionoccurredthatwouldaffectparticipationintheU.S. marketbytheindustryinChinaintheimminentfuture. Wehaveconsideredpetitioner’svariousargumentsaboutthestatusofBaldor Canada’soperationsandthesignificanceoftheclosureofthisfacilityrelativetotheIMTDC industryasawholeinCanada,butwefindsuchargumentsunconvincingandlackingin recordsupport.Forexample,petitionersuggeststhatBaldorcloseditsoperationsinMay 2016andshiftedthemtotheUnitedStates“afterthePetitionswerefiledandcoinciding withtheDepartmentofCommerce’simpositionof191.34percentpreliminarydutieson IMTDCimportsfromCanada.” 253Infact,.254InitsNovember10,2015U.S.producer questionnaire,Baldorreportedthat“,”255andinitsNovember23,2015postconference brief,Baldorreportedthatit***.256By***.257 Thependencyoftheseinvestigationsplayedaroleinthe***ofBaldorCanada’sSt. Clairefacility,258butseveralotherreasonsalsomotivatedtheclosure.ABB’sApril2016 pressreleasenotedthatthe“currenteconomiccontext,theslowdowninworldmarkets
25119U.S.C.§1677(7)(H). 252CRatIͲ5toIͲ6,IIIͲ5;PRatIͲ4,IIIͲ3. 253Petitioner’sPosthearingBriefatExhibit1at18Ͳ19. 254CRatIIIͲ7;PRatIIIͲ4.BaldorhadalreadypermanentlycloseditsaffiliatedIMTDCfacility inChinainDecember2014.CRatIͲ6n.17,VIIͲ13;PRatIͲ5n.17,VIIͲ8. 255Baldor’sU.S.ProducerQuestionnaire,EDISDoc.569086atAnswertoQuestionIIͲ3 (reportedunderthecategoryof***). 256Baldor’sNovember23,2015Postconf.Briefat38. 257CRatIIIͲ7;PRatIIIͲ4. 258In***.CRatIIIͲ7;PRatIIIͲ4.InanApril2016pressreleaseannouncingthedecisionto closeBaldorCanadaandrelocatetheequipmenttoNorthCarolina,ABBidentifieduncertainties associatedwiththefilingoftheU.S.antidumpingdutypetitiononIMTDCsfromCanadaasamong severalreasonsfortheclosure.CRatIIIͲ7;PRatIIIͲ4. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 57 of 218
50andinstabilityinoilandgaspricesareallfactorsthathaveledtoadeclineindemandfor productsmadeintheinstallationofSt.Claire.” 259ABBalsoreportedthat“this consolidationofoperationswillallowustotakeadvantageoftheexcesscapacityofour otherfacilities,toenhanceourcompetitivenessandimprovetheservicetoourNorth Americancustomers.” 260 PetitionerspeculatesthatitisstillpossibleforBaldortoresumeitsIMTDCfinishing operationsinCanadaatanymoment.261***.262Inresponsetoquestionsfromthe Commission’sstaff,BaldorCanadareportedthat***.263 Petitionerfurtherassertsthat,despiteBaldorCanada’sclosure,theindustryin Canadamaintains“massive”castingandfinishingcapacityforIMTDCs.Petitionerarguesin itsprehearingandposthearingbriefsthatBaldorCanadafunctionedsolelyasafinisherand thatatleast29ironfoundriesinCanadathatproduced843millionpoundsofironcastings in2014andover500machiningoperationsinOntarioandnumerousothermachining operationselsewhereinCanadacontinuetooperate.264Werejectpetitioner’scontentions asspeculativeforseveralreasons. TheCommissionissuedforeignproducer/exporterquestionnairesto23firmsthat werepossibleproducers/exportersofIMTDCsinCanadabasedoninformationcontainedin recordsandinformationsubmittedinthepetitions. 265Weobservethatthepetitions, whichinitiallyrequestedamuchbroaderscopeofimportedsubjectmerchandise,identified onlyninepossibleproducersofsubjectmerchandiseinCanada,andfouroftheCanadian firmslistedinthepetitionsreportedthattheyarenotmanufacturersofIMTDCs. 266Usable questionnairedatawerereceivedfromonefirm(BaldorCanada),whichestimatedthatit accountedforapproximatelypercentofallproductionofIMTDCsinCanadaand approximately***percentofexportsofsubjectmerchandisefromCanadatotheUnited Statesin2015. 267NootherfirmsreportedthattheyproducedIMTDCsinCanada,and
259CRatIIIͲ7;PRatIIIͲ4.Initscertifiedforeignproducerquestionnaireresponseinthefinal phaseoftheseinvestigations,BaldorCanadareportedthat***.ForeignProducerQuestionnaire, EDISDoc.593979(Oct.21,2016). 260CRatIIIͲ7;PRatIIIͲ4. 261Petitioner’sPosthearingBriefatExhibit1at20. 262ForeignProducerQuestionnaire,EDISDoc.593979(Oct.21,2016). 263Baldor’sNovember23,2015Postconf.BriefatExhibit1at20;seealsoid.at38,Exhibit2 atparas.22Ͳ23. 264Petitioner’sPosthearingBriefat13,Exhibit1at18Ͳ20;Petitioner’sPrehearingBriefat14Ͳ 15. 265CRatVIIͲ3;PRatVIIͲ3. 266CRatVIIͲ4n.9;PRatVIIͲ3n.9.Moreover,intheircommentsonthedraftquestionnaires forthefinalphaseoftheseinvestigations,nopartyrespondedtotheCommission’srequestinits preliminarydeterminationstoidentifyanyadditional“foundriesandanyotherfirmsthatmightbe producingunfinishedorfinishedIMTDCsinCanada.”CRatVIIͲ3;PRatVIIͲ3;Confidential PreliminaryViewsat62n.230;USITCPub.4587at40n.230. 267CRatVIIͲ3&n.4;PRatVIIͲ3&n.4. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 58 of 218
51Commerceselectedonlyonefirm(BaldorCanada)asthemandatoryrespondentforits antidumpingdutyinvestigationofIMTDCsfromCanada. 268 BaldorCanadaaccountedfornearlyallknownimportsofsubjectmerchandise duringthePOI,andthereisnoindicationthatanotherfirminCanadawillexport meaningfulvolumesofunfinishedorfinishedIMTDCstotheUnitedStatesintheimminent future.269BaldorCanada’sreportedexportsoffinishedIMTDCsfromCanadatotheUnited Statesin2015wereequivalenttopercentofU.S.importsofIMTDCsfromCanada reportedinU.S.importerquestionnairesfor2015. 270DomesticproducerBaldor,,271 wasimporterofsubjectmerchandisefromCanada.272Otherfirmshadbeenidentified asleadingimportersofsubjectmerchandisefromCanadaduringthepreliminaryphaseof theseinvestigations(),butduetomodificationsinthescope,thesefirmsnotifiedthe CommissionthatCommercehadexcludedtheirimportsfromthescopeofsubject merchandise.273
268CRatIͲ5toIͲ6;PRatIͲ4;81Fed.Reg.75,039,75,039(Oct.28,2015). 269Indeed,eventhoughtheCommissionmustbaseitsthreatanalysisonrecordevidence, notconjectureorspeculation,whenpressedatthehearingtoidentifylikelysourcesofsubject merchandisefromCanadaintheimminentfuture,TBW’switnessadmittedthatdoingsowould“be speculationonmypart.”HearingTr.at102. 270CRatVIIͲ3;PRatVIIͲ3. 271CR/PRatTableIIIͲ2. 272CRatIͲ5;PRatIͲ4.TheCommissioninstructedimporterstoreporttheirimportsbased onthecountryoforiginofthecasting.firmsreportedU.S.importsofsubjectlargeͲdiameter IMTDCsfromCanada.U.S.importerBaldor(whichaccountedforpercentofsubjectimports fromCanadain2015intermsofpiecesandpercentintermsofvalue)sourced.U.S. importer***(whichaccountedforpercentofsubjectimportsfromCanadain2015intermsof piecesandpercentintermsofvalue)listed90firmsasCanadianproducersoftheitemsit imported;ofthese90firms,;importersfortwoofthesefirms()reportedthattheydidnot importsubjectmerchandisefromCanada;andU.S.importersubmittedaquestionnaire response.U.S.importer(whichaccountedforpercentofsubjectimportsfromCanadain 2015intermsofpiecesandpercentintermsofvalue)sourcedallofitsimportsfrom***.U.S. importer***(whichaccountedforpercentofsubjectimportsfromCanadain2015intermsof piecesandpercentintermsofvalue)sourcedallofitsimportsfrom***.U.S.importer*** (whichaccountedforpercentofsubjectimportsfromCanadain2015intermsofpiecesand value)didnotreporttheCanadianproducer.U.S.importer(whichimported***)didnotknow theCanadianproducer.U.S.ImporterQuestionnaireResponses. 273CRatIͲ5;PRatIͲ4;MemorandumINVͲNNͲ089atIͲ6(Dec.7,2015).ImportsfromCanada ofwhatturnedouttobeoutͲofͲscopemerchandisebyweresosizablethattheCommission highlightedtheirimportanceinitspreliminarydeterminations.ConfidentialPreliminaryViewsat61 n.227;USITCPub.4587at39n.227(“Forexample,thecurrentrecordsuggeststhatislargely responsiblefortheincreaseinaggregateU.S.importsfromCanadaduring2013andsubsequent declinethereafter,whereas***combinedarelargelyresponsiblefortheincreaseinaggregateU.S. importsfromallothersourcesduring2014andsubsequentdeclinethereafter.…Totheextentthat theirimportsconsistofmerchandisecorrespondingtotherevisedscopeoftheseinvestigations,we seekadditionalinformationaboutdemandtrendsthatmayexplaintheseshiftsinvolume.”) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 59 of 218
52Furthermore,foundriesproduceabroadrangeofproducts,withIMTDCcastings likelyaccountingforasmallshare.Forexample,U.S.foundryWaupacareportedthat unfinishedIMTDCsaccountedforlessthanpercentofitsproduction. 274Inanyevent, subjectimportsofunfinishedIMTDCsfromCanada“peaked”atpiecesin2014and neveraccountedformorethan$inanygivenperiodbetweenJanuary2013andJune 2016,andunfinishedIMTDCsaccountedforlessthanpercentofallIMTDCimportsfrom allsourcesin2015. 275 PetitionerassertsthatBaldorCanadahad“aclosesupplierrelationship”withLaforo IronFoundry(“LaforoFoundry”),itsformerneighborinCanadafromwhichitusedto purchaseunfinishedIMTDCs,andpetitionercontendsthatBaldor(orothers)willpurchase unfinishedIMTDCsfromLaforoFoundrythatwillbeexportedtotheUnitedStatesforU.S. finishingoperations. 276TheinformationthatpetitionersubmittedaboutLaforoFoundry, however,appearstoundermineratherthansupportpetitioner’sargumentregarding IMTDCfoundriesinCanada.Thesearticlesindicatethat,asofOctober2005,Laforo Foundryhadacapacityof“25,000tonnes”anddirected“aquarterofitsproduction”to BaldorCanada’scorporatepredecessor(MaskaPulleys),withtherestofLaforoFoundry’s productioninvolvingproductsoutsidethescopeoftheseinvestigations,“suchascastingsof moldedpartssuchasdiscbrakes,replacementparts,heatingwood,etc.”AsofOctober 2005,MaskaPulleyswas“theonlymanufacturingcompanyinthisnicheinCanada,”and MaskaPulleysheld“aboutathirdoftheCanadianmarketand5percentoftheU.S. market.”AccordingtoaMay2013article,LaforoFoundryspecializedinpartsfor automobilesandtrains(i.e.,notproductsthatarethefocusoftheseinvestigations),andit wasinvesting$6.0milliontomodernizeitsfoundry.AccordingtoaJuly2015article,Laforo Foundrywasengaginginadditionalmodernizationefforts“tomovefromatraditionaltoa moremodernfoundry”becausethe“qualitythat{it}hadbeforewaswaveringandsomeof {its}customersareverydemanding.Forthequality,ittakesconsistencywhichwasnoteasy withthetraditionalmethod.” 277 Otherevidencecorroboratesthattherecouldbedifficultiesobtainingunfinished IMTDCsinCanada.BaldorCanadahadonlyfinishingequipment,soitdidnotmanufacture anyunfinishedIMTDCs. 278BaldorCanadadidnotsourceallofitsunfinishedIMTDCsfrom Canada.279Moreover,in***reportedincreasingdifficultysourcingblankswithin
274Eventhisestimateisbelievedtobeoverstated.CRatIIIͲ2;PRatIIIͲ1toIIIͲ2. 275CR/PRatTableIVͲ3. 276Petitioner’sPosthearingBriefatExhibit1at19;Petitioner’sPrehearingBriefat15, Exhibit3(indicatingthatLaforoFoundry’sfounderandPresidentwasthefounderandeventually majorityshareholderinMaskaPulleysbeforeBaldorpurchasedMaskaPulleysinOctober2008).We notethatBaldorcurrentlysourcescastingsfortheIMTDCsitmanufacturesonthefinishing equipmentmovedfromCanadatotheUnitedStatesprimarilyfromfoundriesin***.CRatVIIͲ4;PR atVIIͲ4.277Petitioner’sPrehearingBriefatExhibit3. 278CRatVIIͲ5;PRatVIIͲ4. 279BaldorCanadareportedthatitsourceditsunfinishedIMTDCsfromfoundriesin***.U.S. ImporterQuestionnaire,EDISDoc.***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 60 of 218
53Canada.280Purchaser***alsoreportedthatsince2012,itsCanadiansupplierhas“shorted” shipmentsbecauseofalackofavailabilityofcastings,andbecausethesupplierclosedin 2015. 281 Fortheforegoingreasons,wedeterminethattheclosureofthelargestsourceof subjectmerchandisefromCanadahasfundamentallyalteredhowanyIMTDCindustryin CanadawillcompeteintheU.S.marketintheimminentfuture.Intheabsenceofany similardisruptionaffectingparticipationintheU.S.marketbytheIMTDCindustryinChina, wehaveexercisedourdiscretionnottocumulativelyassessthevolumeandpriceeffectsof subjectimportsfromCanadaandChinaforpurposesofourthreatanalysis.
C. NoThreatofMaterialInjurybyReasonofSubjectImportsfromCanada
- LikelyVolumeofSubjectImportsfromCanada
TheUnitedStateswasthelargestdestinationforIMTDCsproducedinCanadaduring thePOI. 282Nevertheless,thevolumeofU.S.shipmentsofsubjectimportsfromCanada,by value,declinedoverallduringthePOI;itincreasedfrom$in2013to$in2014, declinedto$in2015(alowerlevelthanin2013),andwaslowerininterim2016$() thanininterim2015$().283TheshareofapparentU.S.consumption,byvalue,for subjectimportsfromCanadaincreasedfrompercentin2013to***percentin2014 and2015,andtheirmarketsharewaslowerininterim2016(***percent)thanininterim 2015(percent).284BaldorCanada,thesolerespondingexporterofsubjectmerchandise inCanada,reportedproducingIMTDCsontheproductionequipmentusedto
280Questionnaire,EDISDoc.(Oct.21,2016). 281CRatIIͲ8;PRatIIͲ6. 282ExportstotheUnitedStatesaccountedforpercentoftheCanadianindustry’stotal reportedshipmentsin2013,percentin2014,percentin2015,percentininterim2015, andpercentininterim2016.CR/PRatTableVIIͲ2. 283Intermsofpieces,thevolumeofU.S.shipmentsofsubjectimportsfromCanadaalso declinedoverallduringthePOI;itincreasedfrompiecesin2013topiecesin2014, decreasedtopiecesin2015,andwaslowerininterim2016(pieces)thanininterim2015 (pieces).CR/PRatTableIVͲ6.EndͲofͲperiodinventoriesinCanadadeclinedfrompiecesin 2013topiecesin2015,werelowerininterim2016()thanininterim2015(pieces),and areprojectedtobein2017.CR/PRatTableVIIͲ2.AlthoughendͲofͲperiodU.S.inventoriesof subjectmerchandisefromCanadaincreasedoverallfrompiecesin2013topiecesin2015 andwerehigherininterim2016(pieces)thanininterim2015(pieces),CR/PRatTableVIIͲ 10,thisisconsistentwithBaldorCanada’srelocationofproductionoperationsfromCanadatothe UnitedStates.Moreover,importersreportedarrangedimportsofunfinishedIMTDCsand arrangedimportsoffinishedIMTDCsfromCanadaafter2016.CR/PRatTableVIIͲ11. 284Intermsofpieces,themarketshareofsubjectimportsfromCanadadeclinedfrom percentin2013topercentin2014andpercentin2015,andtheirmarketsharewas lowerininterim2016(***percent)thanininterim2015(***percent).CR/PRatTableIVͲ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 61 of 218
54manufactureIMTDCsinCanada.285Moreover,BaldorCanadaprojectsthatitsproduction capacityandproductionwillbe***intheimminentfuture,giventheclosureofitsSt.Claire facility,relocationoftheequipmenttotheUnitedStates,andconsolidationofits operationsintheUnitedStates.286TheclosureofBaldorCanadaeliminatesbyfarthe largestsourceofsubjectimportsfromCanadaduringthePOI. 287Asdiscussedinmore detailabove,althoughtheCommissionsurveyedmultiplepossibleproducersofIMTDCsin Canada,thereisnorecordevidencethatanyotherfirmsinCanadawillexportmeaningful volumesofunfinishedorfinishedIMTDCstotheUnitedStatesintheimminentfuture,with evenpetitionerconcedingthatsuchaconclusionwouldbespeculative.288Basedonthe recordandourfindingsabove,thereisnoindicationonthisrecordthattherearelikelyto besignificantvolumesofsubjectimportsfromCanadaoffinishedorunfinishedlargeͲ diameterIMTDCsintotheU.S.marketintheimminentfuture,letalonealikelysignificant increaseinsubjectimportsfromCanada.
- LikelyPriceEffectsofSubjectImportsfromCanada
SubjectimportsfromCanadaundersoldthedomesticlikeproductinall84instances (involving21,999pieces)atmarginsthatrangedfrom8.4percentto63.3percent.289Aswe foundabove,however,evenwhentheundersellingbysubjectimportsfromCanadais combinedwiththeundersellingbysubjectimportsfromChina,cumulatedsubjectimports fromCanadaandChinadidnothavesignificantpriceeffects,giventheabsenceofany significantmarketshareshiftsorevidenceindicatingthatcumulatedsubjectimports depressedpricesofthedomesticlikeproductorpreventedincreasesinpricesofthe domesticlikeproductthatotherwisewouldhaveoccurredtoasignificantdegree.Given ourfindingthatthevolumeofsubjectimportsfromCanadaisunlikelytobesignificantand intheabsenceofevidencethatsubjectimportsfromCanadahavecausedsignificantprice effectsevenwhentheywerepresentintheU.S.market,wefindthattheseimportsare unlikelytocausepriceeffectsintheimminentfuture.Weconsequentlyconcludethat subjectimportsfromCanadaareunlikelytoentertheU.S.marketatpricesthatarelikelyto
285CR/PRatTableVIIͲ3. 286ReportedproductioncapacityinCanadawaspiecesbetween2013and2015and piecesininterim2015andinterim2016,andisprojectedtobepiecesin2017.Productionof subjectmerchandiseinCanadawaspiecesin2013,piecesin2014,piecesin2015, piecesininterim2015,andpiecesininterim2016.Capacityutilizationintermsofpieces declinedirregularlyfrompercentin2013topercentin2015andwaslowerininterim2016 (***percent)thanininterim2015(percent),asBaldorCanadapreparedtocloseitsoperating facility.CR/PRatTableVIIͲ2. 287Wenotethatmostpurchasers(22of24)reportedthatnonewsuppliershaveentered theU.S.marketsinceJanuary1,2013,andtheonlynewentrantstheyreported.CRatIIͲ8;PR atIIͲ6. 288HearingTr.at102. 289CR/PRatTableVͲ2toTableVͲ9. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 62 of 218
55havesignificantdepressingorsuppressingeffectsonpricesofthedomesticlikeproductor thatarelikelytoincreasedemandforfurtherimports.
- LikelyImpactofSubjectImportsfromCanada
PetitionerandotherdomesticproducersreportedthatsubjectimportsfromCanada andChinaaffectedtheirexistingdevelopmentandproductionefforts,growth,investment, andabilitytoraisecapital,andtheyanticipatedfurthereffectsintheabsenceofreliefasa resultoftheseinvestigations. 290Petitionerarguesthatthedomesticindustryis vulnerable.291Althoughthedomesticindustryexperiencedpoorfinancialperformanceand declinesinsomeofitsotherperformanceindicatorsincertainportionsofthePOI,as indicatedinsectionVI.Eabove,wedidnotfindacorrelationbetweenthesedomestic industryperformanceindicatorsandcumulatedsubjectimports.Unlikethevolumeof cumulatedsubjectimports,whichwefoundabovetobesignificant,wefindthatthe volumeofsubjectimportsfromCanadaisunlikelytobesignificantintheimminentfuture. WefurtherfindthatsubjectimportsfromCanadaareunlikelytoentertheU.S.marketat pricesthatarelikelytohavesignificantpriceͲdepressingorͲsuppressingeffectsonpricesof thedomesticlikeproductorthatarelikelytoincreasedemandforfurtherimports.Based ontheseconsiderations,wefindthatsubjectimportsfromCanadaarenotlikelytohavea significantimpactonthedomesticindustryintheimminentfuture.Therefore,wedonot findthatmaterialinjurybyreasonofsubjectimportsfromCanadawouldoccurabsentthe issuanceofanantidumpingdutyorder. Accordingly,weconcludethatthedomesticindustryisnotthreatenedwithmaterial injurybyreasonofsubjectimportsfromCanada.
D. NoThreatofMaterialInjurybyReasonofSubjectImportsfromChina
- LikelyVolumeofSubjectImportsfromChina
TheIMTDCindustryinChinareportedlargecapacityandproductionofsubject merchandise.292Ithastheabilitytoshiftproductionfromotherproductstosubject
290CR/PRatAppendixF. 291Petitioner’sPosthearingBriefat12,14;Petitioner’sPrehearingBriefat40Ͳ42,48Ͳ49. 292ReportedproductioncapacityinChinawas***piecesin2013and2014,piecesin 2015,andpiecesininterim2015andinterim2016;respondingproducersinChinaproject similarlevelsin2016and2017(pieces).ProductionofsubjectmerchandiseinChinawas piecesin2013,***piecesin2014,***piecesin2015,piecesininterim2015,andpiecesin interim2016,andisprojectedtobeatsimilarlevelsin2016(***pieces)and2017(pieces). Capacityutilizationintermsofpieceswaspercentin2013,percentin2014,percentin 2015,percentininterim2015,andpercentininterim2016,andisprojectedtobe percentin2016andpercentin2017.CR/PRatTableVIIͲ6. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 63 of 218
56merchandise.293EventhoughtheindustryinChinahastheabilitytoexportsignificant volumesofsubjectmerchandisetotheUnitedStates,exportstotheUnitedStates accountedforadecliningshareoftotalshipmentsbytheindustryinChina(lessthan oneͲthird). 294Consistentwiththistrend,thevalueofU.S.shipmentsofsubjectimports fromChinadeclinedoverallduringthePOI;itincreasedfrom$in2013to$in2014, declinedto$in2015,andwaslowerininterim2016$()thanininterim2015 $().295TheshareofapparentU.S.consumptionrepresentedbysubjectimportsfrom China,byvalue,wasrelativelystable;itdeclinedfrompercentin2013topercentin 2014,increasedtopercentin2015andwaslowerininterim2016(***percent)thanin interim2015(***percent).296U.S.importersdidnotreportarrangingforsizablevolumes
293CR/PRatTableVIIͲ7(indicatingthatapproximatelyofallreportedIMTDCproduction onsharedequipmentbyproducersinChina,bypieces,consistsofsubjectmerchandise).Other productsreportedlymanufacturedinChinaonthesameequipmentassubjectmerchandiseinclude .CRatVIIͲ15;PRatVIIͲ9.PetitionercontendsthattheIMTDCindustryinChinabenefitsfrom numerouscountervailablesubsidyprograms,manyofwhichitallegesaredependentonexport performance.Petitioner’sPosthearingBriefat14Ͳ15;Petitioner’sPrehearingBriefat49Ͳ50.Inits finalcountervailingdutydeterminationregardingIMTDCsfromChina,Commerceidentifiedfive countervailableprogramsthatitconcludedPowermachutilized:(1)policyloanstotheIMTDC industry,(2)provisionofinputsforlessthanadequateremuneration,(3)importtariffandvalueͲ addedtariffexemptionsforforeignͲinvestedenterprisesandcertaindomesticenterprisesusing importedequipmentinencouragedindustries,(4)preferentialtaxrateforcompaniesinthe WesternDevelopmentArea,and(5)reportedgrants.Commerceassignedacountervailingdutyrate of33.26percenttoPowermach,anadversefactsavailablerateof163.46percenttocertainnamed nonͲcooperativefirms,andarateof33.26percenttoallotherfirms.81Fed.Reg.at75,037(Oct. 28,2016);CR/PRatTableIͲ1;CRatIͲ9toIͲ11;PRatIͲ6toIͲ9;Commerce’sIssuesandDecision MemorandumfortheFinalDeterminationintheCountervailingDutyInvestigationofCertainIron MechanicalTransferDriveComponentsfromthePeople’sRepublicofChina(Oct.21,2016),EDIS Doc.594776,file1132084.WeacknowledgeCommerce’sfindingsthattherewereseveral countervailablesubsidyprogramsbenefittingIMTDCproducersinChina.Wehaveconsideredthe natureoftheseprograms,noneofwhichCommercefoundtobeanexportsubsidydescribedin Article3or6.1oftheWTOSCMAgreement,inconjunctionwiththeotherfactorspertainingtolikely subjectimportvolumeandpriceeffectsdiscussedbelowinascertainingwhetherimportsofthe subjectmerchandisearelikelytoincrease,andanyeffectslikelytobecausedbythecountervailable subsidies. 294ExportstotheUnitedStatesaccountedforpercentoftotalshipmentsbytheindustry inChinain2013,percentin2014,percentin2015,percentininterim2015,and percentininterim2016,andU.S.exportsareprojectedtoaccountforpercentoftotal shipmentsin2016andpercentin2017.CR/PRatTableVIIͲ6. 295Intermsofpieces,thevolumeofsubjectimportsfromChinaincreasedfrompieces in2013topiecesin2014andpiecesin2015,andwaslowerininterim2016(***pieces) thanininterim2015(pieces).CR/PRatTableIVͲ6. 296Intermsofpieces,themarketshareofsubjectimportsfromChinaincreasedfrom percentin2013topercentin2014andpercentin2015andwaslowerininterim2016 (***percent)thanininterim2015(***percent).CR/PRatTableIVͲ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 64 of 218
57ofsubjectmerchandisefromChinaintheimminentfuture.297Nofirmsparticipatinginthis proceedingidentifiedanyotherimportreliefproceedingsintheUnitedStatesorother countriesregardingIMTDCs.298 WeacknowledgethatourdatacoveragefortheIMTDCindustryinChinais uncertain.Althoughthepetitionsidentified31possibleproducersofsubjectmerchandise inChina,theCommissionissuedforeignproducer/exporterquestionnairestonearlydouble thatamount(61possiblefirms),includingfirmsnamedinthepetitionsandthoseidentified throughsearchesofrecordsconcerningU.S.importsunderthreeHTSUSstatistical reportingnumbers.299Petitionerreliedonthesestatisticalreportingnumbersasthebest availableinformationforitscalculationofU.S.importsinitspetitions,butitacknowledged thatthesestatisticalreportingnumberscorrespondtobroadbasketcategoriesthatlikely includemerchandisethatisoutsidethescopeidentifiedinthepetitions(whichhas narrowedconsiderablyintheinterveningtime,asdiscussedabove). 300Inthefinalphaseof theseinvestigations,theCommissionreceivedusablequestionnaireresponsesfromseven firms,includingPowermach,301whichChineseRespondentsreportedwasthe“singlelargest producerandexporterofChina.” 302Basedoninformationprovidedbytheresponding producersinChina,thereporteddatainthefinalphaseoftheseinvestigationsaccounted forapproximatelypercentofallIMTDCproductioninChinaandapproximately percentofexportsofsubjectmerchandisefromChinain2015. 303Thefirms’reported exportswereequivalenttopercentofU.S.importsofIMTDCsfromChinain2015as reportedinimporterquestionnaireresponses.304 PetitioneraskstheCommissiontorelyonadversefactsavailablebasedonits argumentthatthequestionnairedatasubstantiallyunderstatethesizeoftheindustryin Chinaintheabsenceofquestionnaireresponsesfromninespecificfirms,eightofwhichit
297U.S.importers’arrangedimportsofsubjectmerchandisefromChinawerepiecesin thethirdquarterof2016,piecesinthefourthquarterof2016,piecesinthefirstquarterof 2017,andpiecesinthesecondquarterof2017.CR/PRatTableVIIͲ11.Inventoriesarenot unusualinthisindustrygiventhelargenumberofproductpermutationsandtheuseofcatalogues toadvertiseofferings.CRatVͲ4;PRatVͲ3.EndͲofͲperiodinventoriesinChinaandU.S.importers’ endͲofͲperiodinventorieswererelativelystable.EndͲofͲperiodinventoriesofsubjectmerchandise inChinawerepiecesin2013,piecesin2014,piecesin2015,piecesininterim2015, andpiecesininterim2016,andareprojectedtobepiecesin2016andpiecesin2017. CR/PRatTableVIIͲ6.U.S.importers’endͲofͲperiodinventoriesofsubjectmerchandisefromChina werepiecesin2013,***piecesin2014,***piecesin2015,***piecesininterim2015,and ***piecesininterim2016.CR/PRatTableVIIͲ10. 298CRatVIIͲ23;PRatVIIͲ13. 299CRatVIIͲ11;PRatVIIͲ7. 300CRatIVͲ3;PRatIVͲ3;Petitions,vol.Iat10,15. 301CRatVIIͲ11;PRatVIIͲ7. 302Confer.Tr.at34(Grimson). 303CRatVIIͲ11;PRatVIIͲ7. 304CRatVIIͲ11;PRatVIIͲ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 65 of 218
58arguesparticipatedinCommerce’sproceedings.305Wenotethatpetitionerneveridentified fourofthesefirmsinitspetitionsaspossibleproducers/exportersofsubjectmerchandisein China.306AlthoughtheCommissiondidnotreceiveaforeignproducerquestionnaire responsefromMinYue(theninthfirmreferencedbypetitioner)inthefinalphaseofthese investigations,MinYuesubmittedaquestionnaireinthepreliminaryphaseofthese investigations, 307whichwehaveconsidered.ThedatathatMinYuesubmittedinthe preliminaryphaseoftheseinvestigationsmaybeoverstatedbecausethequestionnaire predatedseveralscopeamendmentsthatnarrowedtheuniverseofimportssubjectto theseinvestigations.Nevertheless,MinYue’sdataareconsistentwiththeinformation discussedabovefortheIMTDCindustryinChina.MinYue***.308 Wealsoquestionthepremiseunderpinningpetitioner’sargumentthatthe Commission’srecorddoesnotcontainquestionnairedatafromcertainfirmsthat participatedtosomedegreeinCommerce’sproceedings.Thefactthatninefirmsidentified bypetitionersubmittedinformationonthevolumeandvalueoftheirexportsofIMTDCsto Commerceattheoutsetoftheinvestigationsisnotdeterminativeofwhetherthesefirms actuallymanufacturedorexportedsubjectmerchandise,giventhemanyinterveningscope changes.Indeed,Commerceselectedtwomandatoryrespondentstoinvestigateforits antidumpingandcountervailingdutyproceedingsinvolvingIMTDCsfromChina (PowermachandNOKWuxi)becausethey“accountedforthelargestvolumeofexportsof themerchandiseunderconsideration.” 309Oneofthem(NOKWuxi)subsequentlynotified CommerceofitsintenttowithdrawfromCommerce’sinvestigationscontingenton Commerce’sacceptanceofpetitioner’srequesttoexcludecertainTVDsfromthe investigations’scope.OnceCommerceexcludedTVDsfromthescopeinitspreliminary
305Petitioner’sPosthearingBriefat12Ͳ13,Exhibit1at25Ͳ26;HearingTr.at37,51Ͳ52 (Pickard);Petitioner’sPrehearingBriefat14,42Ͳ44.Inthesesubmissions,petitioneralsoargued thatthereareatleast15,000foundriesinChinathatcollectivelyproducedmorethan74billion poundsofironcastingsin2014.AsweexplainedinsectionVII.Babove,however,foundriesdonot existsolelytomanufactureIMTDCcastings,andU.S.importsofunfinishedIMTDCswererelatively lowoverthePOI. 306CRatVIIͲ12n.17;PRatVIIͲ7n.17. 307Inthepreliminaryphaseoftheseinvestigations,theCommissionreceivedusable questionnaireresponsesfromfourfirmsmanufacturingsubjectmerchandiseinChina:;Min Yue;BaldorMaska;andPowermach.Thesefirmscollectivelyaccountedforpercentofall IMTDCproductioninChinaandapproximately***percentofexportstotheUnitedStatesin2014. ConfidentialPreliminaryViews,EDISDoc.571266at58;USITCPub.4587at38.BaldorMaskadid notsubmitaforeignproducerquestionnaireinthefinalphaseoftheseinvestigations;itceased productionoperationsinDecember2014,asindicatedearlier.Confer.Tr.at22(McCartney);CRat IIIͲ5;PRatIIIͲ3. 308MinYue’sForeignProducerQuestionnaire,EDISDoc.570526atTableIIͲ10(Nov.25, 2015). 309See,e.g.,Commerce’sIssuesandDecisionMemorandumfortheFinalDeterminationin theCountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfrom thePeople’sRepublicofChina(Oct.21,2016),EDISDoc.594776,file1132084at2. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 66 of 218
59determinations,NOKWuxi,whichreporteditselfasprimarilyanexporterofTVDs,withdrew fromCommerce’sinvestigations. 310 Inthepreliminaryphaseoftheseinvestigations,respondentsreportedthat PowermachandMinYuewerethelargestexportersofsubjectmerchandisefromChina, andtheyreportedtheexistenceofperhapstwoorthreeotherfirmsofanysignificant size.311TheCommission’srecordincludesinformationonbothoftheselargeexportersof subjectmerchandisefromChina.Totheextentthattheinformationontherecord concerningtheIMTDCindustryinChinaisincomplete,therecorddoesnotindicatethatthe informationfromanyproducersofinͲscopeIMTDCsthatdidnotrespondtothe Commission’sforeignproducerquestionnairewouldhavebeenappreciablydifferentfrom theinformationobtainedfromtherespondingproducers(norhaspetitionersuggestedthat isthecase).Therecorddoesnotcontain(norhaspetitionerprovided)publiclyavailable informationabouttheIMTDCindustryinChina.TheGlobalTradeAtlasdataontherecord concernamuchbroaderproductcategorythanIMTDCs(flywheelsandpulleys,including pulleyblocks), 312andareinourviewlessprobativethantheinformationprovidedbythe respondingproducersinChina.Inanyevent,thesedataindicatethatexportsfromChinato theUnitedStatesofflywheelsandpulleysaccountforlessthanoneͲfifthoftotalexportsof flywheelsandpulleysfromChina,byvalue;moreover,thesedatadonotindicatethat exportsofflywheelsandpulleysfromChinatotheUnitedStates,byvalueorasa percentageoftotalexportsfromChina,areincreasing. 313Consequently,wehaverelied primarilyonthedatafromtherespondingforeignproducers,assupplementedwithother availablerecordevidence,asthefactsavailableconcerningthesubjectindustryinChina. Basedontherecord,wefindthatthevolumeofsubjectimportsfromChinaislikely tobesignificantintheimminentfuture,butwedonotfindthatthereislikelytobea significantincreaseintheseimports.Webasethisconclusiononavailableinformation aboutthebehaviorofsubjectimportsfromChinabetweenJanuary2013andJune2016, discussedabove,includingthatsubjectimportsfromChinamaintainedarelativelystable shareoftheU.S.marketandthattheUnitedStatesaccountedforadecliningshareofthe Chineseindustry’stotalshipmentsofIMTDCs(lessthanoneͲthird).TheChineseindustry’s
310CRatIͲ6n.18;PRatIͲ5n.18;Commerce’sIssuesandDecisionMemorandafortheFinal DeterminationintheInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe People’sRepublicofChina(Oct.21,2016),EDISDoc.594776;Commerce’sIssuesandDecision MemorandaforthePreliminaryDeterminationintheInvestigationofCertainIronMechanical TransferDriveComponentsfromthePeople’sRepublicofChina,EDISDoc.594778;NOK’s withdrawalletter,EDISDoc.594779. 311ConfidentialPreliminaryViews,EDISDoc.571266at62Ͳ63;USITCPub.4587at40; Confer.Tr.at34(Grimson). 312CR/PRatTableVIIͲ8;CRatVIIͲ17;PRatVIIͲ13(indicatingthatexportstatisticsunder HarmonizedTariffSchedulesubheading8483.50asreportedbyStatisticsChinaintheGTAdatabase includenotonlytheinͲscopeIMTDCsbutalsoasubstantialamountofitemsthatarenotatissuein theseinvestigations,includingsteel,plastic,andaluminumflywheelsandpulleys,includingpulley blocks).313CR/PRatTableVIIͲ8. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 67 of 218
60capacitywasalsorelativelystableduringthePOI,andtherearenoreportedincreases anticipated.Thus,thereisnobasistoconcludethatthelikelysignificantvolumeofsubject importsfromChina,whichwearenotcumulatingwithsubjectimportsfromCanadaforour threatanalysis,islikelytoincreasesignificantlyintheimminentfuture.
- LikelyPriceEffectsofSubjectImportsfromChina
SubjectimportsfromChinaundersoldthedomesticlikeproductin133of144 instances(involving14,832pieces)atmarginsthatrangedfrom0.1percentto84.8 percent.314Aswefoundabove,however,evenwhentheundersellingbysubjectimports fromChinaiscombinedwiththeundersellingbysubjectimportsfromCanada,cumulated subjectimportsfromCanadaandChinadidnothavesignificantpriceeffects,giventhe absenceofanysignificantmarketshareshiftsorevidenceindicatingthatcumulatedsubject importsdepressedpricesofthedomesticlikeproductorpreventedincreasesinpricesof thedomesticlikeproductthatotherwisewouldhaveoccurredtoasignificantdegree.In lightofourfindingthatthevolumeofsubjectimportsfromChinaisunlikelytochange significantlyintheimminentfutureandintheabsenceofevidencethatsubjectimports fromChinahavecausedsignificantpriceeffectsevenwhentheywerepresentintheU.S. marketandpervasivelyundersellingthedomesticlikeproduct,315wefindthatthese importsareunlikelytocausepriceeffectsintheimminentfuture.Consequently,therecord indicatesthatsubjectimportsfromChinaarenotlikelytoentertheU.S.marketatprices thatarelikelytohavesignificantpricedepressingorsuppressingeffectsonpricesofthe domesticlikeproductorthatarelikelytoincreasedemandforfurtherimports.
- LikelyImpactofSubjectImportsfromChina
PetitionerandotherdomesticproducersreportedthatsubjectimportsfromCanada andChinaaffectedtheirexistingdevelopmentandproductionefforts,growth,investment, andabilitytoraisecapital,andtheyanticipatedfurthereffectsintheabsenceofreliefasa resultoftheseinvestigations. 316Petitionerarguesthatthedomesticindustryis vulnerable.317Althoughthedomesticindustryexperiencedpoorfinancialperformanceand declinesinsomeofitsotherperformanceindicatorsincertainportionsofthePOI,wedid notfindinsectionVI.Eaboveacorrelationbetweenthesedomesticindustryperformance indicatorsandcumulatedsubjectimports.ShiftsinU.S.shipmentsandnetsalesforboth thedomesticindustryandcumulatedsubjectimportsoftentrackedchangesinapparent U.S.consumption,andchangesinthedomesticindustry’sfinancialperformanceappeared mostaffectedbychangesinSG&AandCOGSduetochangesinoutputassociatedwith changesinapparentU.S.consumption.
314CR/PRatTableVͲ2toTableVͲ9. 315CR/PRatTableVͲ2toTableVͲ9. 316CR/PRatAppendixF. 317Petitioner’sPosthearingBriefat12,14;Petitioner’sPrehearingBriefat40Ͳ42,48Ͳ49. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 68 of 218
61WefindnoevidenceindicatingthatsubjectimportsfromChinaarelikelytohavea significantimpactonthedomesticindustryintheimminentfuture.Asdiscussedabove,we findthatthevolumeofsubjectimportsfromChinaislikelytobesignificantbutatlevels equivalenttothoseduringthePOI.WefurtherfindthatsubjectimportsfromChinaare unlikelytoentertheU.S.marketatpricesthatarelikelytohavesignificantpricedepressing orsuppressingeffectsonpricesofthedomesticlikeproductorthatarelikelytoincrease demandforfurtherimports.Basedontheseconsiderationsandtheabsenceofany correlationbetweenthedomesticindustry’sconditionandthevolumeandpriceeffectsof cumulatedsubjectimportsduringthePOI,wefindthatsubjectimportsfromChinaarenot likelytohaveasignificantimpactonthedomesticindustryintheimminentfuture. Therefore,wedonotfindthatmaterialinjurybyreasonofsubjectimportsfromChina wouldoccurabsenttheissuanceofantidumpingandcountervailingdutyorders. Accordingly,weconcludethatthedomesticindustryisnotthreatenedwithmaterial injurybyreasonofsubjectimportsfromChina.
VIII. Conclusion
Forthereasonsstatedabove,wedeterminethatanindustryintheUnitedStatesis notmateriallyinjuredorthreatenedwithmaterialinjurybyreasonofsubjectimportsof largeͲdiameterIMTDCsfromCanadaandChinathatCommercefoundweresoldinthe UnitedStatesatlessthanfairvalueandsubsidizedbythegovernmentofChina. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 69 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 70 of 218
IͲ1 PARTI: INTRODUCTION BACKGROUND TheseinvestigationsresultfrompetitionsfiledwiththeU.S.DepartmentofCommerce (“Commerce”)andtheU.S.InternationalTradeCommission(“Commission”)byTBWood’s Incorporated(“TBW”),Chambersburg,Pennsylvania,onOctober28,2015,allegingthatan industryintheUnitedStatesismateriallyinjuredandthreatenedwithmaterialinjurybyreason oflessͲthanͲfairͲvalue(“LTFV”)importsofcertainironmechanicaltransferdrivecomponents (“IMTDCs”)1fromCanadaandChinaandsubsidizedimportsofIMTDCsfromChina.The petitionersubsequentlyamendedand/orsupplementedthepetitionsonNovember5, November6,November10,andNovember17,2015. 2Furtheramendmentsandclarificationsto thescopelanguagewereproposedbythepetitioneronMarch30,June27,August4,August 17,andAugust22,2016,concerningtheexclusionofcertainfinishedtorsionalvibration dampers(“TVDs”),certainTVDinnerrings,andcertainflywheelswithringgear.3Thefollowing tabulationprovidesinformationrelatingtothebackgroundoftheseinvestigations. 45
Effective date Action October 28, 2015 Petitions filed with Commerce and the Commission; institution of Commission investigations (80 FR 67789, November 3, 2015) November 17, 2015 Commerce’s notices of initiation (80 FR 73716-73726, November 25, 2015) April 11, 2016 Commission’s preliminary countervailing duty determination and alignment of final investigations (81 FR 21316) June 8, 2016 Commerce’s preliminary antidumping duty determinations (81 FR 36876-36881 and 36887-36890, June 8, 2016); scheduling of final phase of Commission investigations (81 FR 41318, June 24, 2016) October 18, 2016 Commission’s hearing October 28, 2016 Commerce’s final determinations (81 FR 75032-75042) November 18, 2016 Commission’s vote December 12, 2016 Commission’s views
1Seethesectionentitled“TheSubjectMerchandise”inPartIofthisreportforacomplete descriptionofthemerchandisesubjecttotheseinvestigations. 2OnNovember5,2015andNovember17,2015,thepetitionerproposedrevisingthescopelanguage tochange,amongotherthings,thedimensionandchemistryelementsofthescope. 3TheamendmentofMarch30,2016,wasaddressedinCommerce’spreliminarydeterminationscope language.SubsequentamendmentswereaddressedinCommerce’sfinaldeterminationscopelanguage. 4PertinentFederalRegisternoticesarereferencedinapp.A,andmaybefoundattheCommission’s website(www.usitc.gov). 5Alistofwitnessesthatappearedatthehearingispresentedinapp.Bofthisreport. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 71 of 218
IͲ2 STATUTORYCRITERIAANDORGANIZATIONOFTHEREPORT Statutorycriteria Section771(7)(B)oftheTariffActof1930(the“Act”)(19U.S.C.§1677(7)(B))provides thatinmakingitsdeterminationsofinjurytoanindustryintheUnitedStates,theCommissionͲͲ
shallconsider(I)thevolumeofimportsofthesubjectmerchandise,(II)the effectofimportsofthatmerchandiseonpricesintheUnitedStatesfor domesticlikeproducts,and(III)theimpactofimportsofsuch merchandiseondomesticproducersofdomesticlikeproducts,butonlyin thecontextofproductionoperationswithintheUnitedStates;and... mayconsidersuchothereconomicfactorsasarerelevanttothe determinationregardingwhetherthereismaterialinjurybyreasonof imports.
Section771(7)(C)oftheAct(19U.S.C.§1677(7)(C))furtherprovidesthatͲͲ6 Inevaluatingthevolumeofimportsofmerchandise,theCommissionshall considerwhetherthevolumeofimportsofthemerchandise,orany increaseinthatvolume,eitherinabsolutetermsorrelativetoproduction orconsumptionintheUnitedStatesissignificant....Inevaluatingthe effectofimportsofsuchmerchandiseonprices,theCommissionshall considerwhether...(I)therehasbeensignificantpriceundersellingbythe importedmerchandiseascomparedwiththepriceofdomesticlike productsoftheUnitedStates,and(II)theeffectofimportsofsuch merchandiseotherwisedepressespricestoasignificantdegreeor preventspriceincreases,whichotherwisewouldhaveoccurred,toa significantdegree....Inexaminingtheimpactrequiredtobeconsidered undersubparagraph(B)(i)(III),theCommissionshallevaluate(withinthe contextofthebusinesscycleandconditionsofcompetitionthatare distinctivetotheaffectedindustry)allrelevanteconomicfactorswhich haveabearingonthestateoftheindustryintheUnitedStates,including, butnotlimitedto...(I)actualandpotentialdeclineinoutput,sales, marketshare,grossprofits,operatingprofits,netprofits,abilitytoservice debt,productivity,returnoninvestments,returnonassets,andutilization ofcapacity,(II)factorsaffectingdomesticprices,(III)actualandpotential negativeeffectsoncashflow,inventories,employment,wages,growth, abilitytoraisecapital,andinvestment,(IV)actualandpotentialnegative effectsontheexistingdevelopmentandproductioneffortsofthe
6AmendedbyPL114Ͳ27(assigned,June29,2015),TradePreferencesExtensionActof2015. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 72 of 218
IͲ3 domesticindustry,includingeffortstodevelopaderivativeormore advancedversionofthedomesticlikeproduct,and(V)in{anantidumping investigation},themagnitudeofthemarginofdumping.
Inaddition,Section771(7)(J)oftheAct(19U.S.C.§1677(7)(J))providesthat—7
(J)EFFECTOFPROFITABILITY.—TheCommissionmaynotdeterminethat thereisnomaterialinjuryorthreatofmaterialinjurytoanindustryinthe UnitedStatesmerelybecausethatindustryisprofitableorbecausethe performanceofthatindustryhasrecentlyimproved.
Organizationofreport PartIofthisreportpresentsinformationonthesubjectmerchandise,subsidy/dumping margins,anddomesticlikeproduct.PartIIofthisreportpresentsinformationonconditionsof competitionandotherrelevanteconomicfactors.PartIIIpresentsinformationonthecondition oftheU.S.industry,includingdataoncapacity,production,shipments,inventories,and employment.PartsIVandVpresentthevolumeofsubjectimportsandpricingofdomesticand importedproducts,respectively.PartVIpresentsinformationonthefinancialexperienceof U.S.producers.PartVIIpresentsthestatutoryrequirementsandinformationobtainedforuse intheCommission’sconsiderationofthequestionofthreatofmaterialinjuryaswellas informationregardingnonsubjectcountries.
MARKETSUMMARY AnIMTDC(atermthatincludessheaves(alsoknownaspulleys),flywheels,and bushings)isanironwheelorcylinderthatmaybefittedwithabeltaroundtheouter circumference.IMTDCsareusedfortransmittingpowergeneratedbyamotor,turbine,or enginetoanothershaft(i.e.,sheave)ortostorerotationalenergy(i.e.,flywheel). TheleadingintegratedU.S.producersofIMTDCs 8identifiedbythepetitionerinclude TBWandMartinSprocket&Gear(“MartinSprocket”). 9TwoleadingU.S.foundriesproducing IMTDCcastings 10includeBrillionIronWorks(“Brillion”)andWaupacaFoundryInc.
7AmendedbyPL114Ͳ27(assigned,June29,2015),TradePreferencesExtensionActof2015. 8Forpurposesofthisreport,integratedproducersofIMTDCsarethosefirmsthatbothcast/forge andfinish/machineIMTDCs. 9Petitions,vol.I,exh.IͲ3.PetitionerTBWanddomesticproducerMartinSprocketprovided responsestotheCommission’squestionnaire.SmallerdomesticintegratedproducersofIMTDCsthat alsoprovidedaresponsetotheCommission’squestionnaireincludeBremenCastings,Inc.(“Bremen”); EnDynLtd.(“EnDyn”);andGoldens’FoundryandMachineCompany(“Goldens”). 10Forpurposesofthisreport,foundriesarefirmsthatcast/forge,butdonotfinish/machine,IMTDCs attheirmanufacturingfacilities. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 73 of 218
IͲ4 (“Waupaca”). 11LeadingdomesticfinishersofIMTDCs12identifiedbythepetitionerincludethe followingfourfirms:B&BManufacturing(“B&B”),BaldorElectricCompany(“Baldor”),Custom Machine&ToolCo.,Inc.(“Custom”),andMaureyManufacturingCorporation(“Maurey”).13 OtherleadingdomesticfinishersofIMTDCsthatrespondedtotheCommission’squestionnaire includeHiͲLoManufacturingCo.(“HiͲLo”)andSterlingIndustries,Inc.(“Sterling”).14 OfthosefirmsrespondingtotheCommission’simporterquestionnaire,thelargestU.S. importerofIMTDCsfromCanadais.15ThelargestrespondingimportersofIMTDCs fromChinaare***.LeadingimportersofIMTDCsfromnonsubjectcountriesthatrespondedto theCommission’squestionnaireinclude***. BaldorElectricCanada(“BaldorCanada”)wasaleadingproducerofIMTDCsinCanada during2015.However,BaldorCanadacloseditsSt.Claire,QuebecfacilityonMay27,2016,and relocateditsCanadianfinishingequipmenttotheBaldorfacilitiesinWeavervilleandMarion, NorthCarolina.NootherfirmsinCanadaindicatedthattheyproducedIMTDCs.BaldorCanada wasthesolemandatoryCanadianrespondentinCommerce’sinvestigation. 16 Theleadingproducers/exportersofIMTDCsinChinathatrespondedtothe Commission’squestionnaireinthefinalphaseoftheseinvestigationsincludePowermach Import&ExportCo.Ltd.(Sichuan)(“Powermach”);YueqingBethelShaftCollarManufacturing. Co.,Ltd.(“Yueqing”);andMartinSprocket&Gear(Shanghai)Co.,Ltd.(“MartinSprocket China”).17PowermachwastheonlycooperatingmandatoryChineserespondentinCommerce’s investigations. 18
11Petitions,vol.I,exh.IͲ3.AlthoughBrillionprovidedaresponsetotheCommission’squestionnaire, itwassubstantiallyincomplete.WaupacaprovidedacompleteresponsetotheCommission’s questionnairebutitsdataisbelievedtobesubstantiallyoverstated.Otherdomesticfoundriesthat respondedtotheCommission’squestionnairebutwereunabletoprovidethedataandother informationrequestedbytheCommissionincludeGreatLakesCastingsLLC(“GreatLakesCastings”); OscoIndustries,Inc.(“Osco”);andTorranceCasting,Inc.(“Torrance”). 12Forpurposesofthisreport,finishersarefirmsthatfinish/machine,butdonotcast/forge,IMTDCs attheirmanufacturingfacilities. 13Petitions,vol.I,exh.IͲ3.Ofthesefourfinishersidentifiedbythepetitioner,onlyCustomdidnot completeaproducerquestionnaire.TorqueTransmission(“Torque”)wasalsoidentifiedbythe petitionerasadomesticfinisherofIMTDCs,however,thefirmrespondedtotheCommission’s questionnaireindicatingthatitdoesnotproduceorimportironpulleysbutthatitmanufacturespulleys fromaluminumandmoldedplastic. 14FinisherSkywayPrecision,Inc.(“Skyway”)alsorespondedtotheCommission’squestionnaire; however,thefirmindicatedthat***. 15Inthepreliminaryphaseoftheseinvestigations,***werealsoidentifiedasleadingimportersof IMTDCsfromCanada.However,bothCaterpillarandGMnotifiedtheCommissionthat,basedon Commerce’spreliminarydeterminations,theirimportsarenotincludedinthescopeofthe investigations. 16CertainIronMechanicalTransferDriveComponentsFromCanada:FinalAffirmativeDetermination ofSalesatLessThanFairValue,81FR75039,October28,2016. 17SmallerfirmsinChinathatrespondedtotheCommission’sfinalphasequestionnaireinclude HaiyangJingweidaGearingCo.,Ltd.(“Haiyang”);HuadeTianjinMetalManufacture(“Huade”);Shanxi (continued...) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 74 of 218
IͲ5 Leadingpurchasersinclude***. Accordingtoquestionnairesreceivedinthefinalphaseoftheseinvestigations,apparent U.S.consumptionofIMTDCstotaledapproximatelyin2015.ReportingU.S.producers’U.S. shipmentsofIMTDCstotaledin2015,andaccountedforpercentofapparentU.S. consumptionbyquantity(inpieces)andpercentbyvalue.U.S.shipmentsofimportsfrom respondingfirmsreportingimportsfromsubjectsourcestotaledin2015andaccountedfor percentofapparentU.S.consumptionbyquantity(inpieces)andpercentbyvalue. U.S.shipmentsofimportsfromrespondingfirmsreportingimportsfromnonsubjectsources totaledin2015andaccountedforpercentofapparentU.S.consumptionbyquantity (inpieces)andpercentbyvalue.19
SUMMARYDATAANDDATASOURCES Asummaryofdatacollectedinthefinalphaseoftheseinvestigationsispresentedin appendixC,tableCͲ1.Exceptasnoted,U.S.industrydataarebasedonquestionnaireresponses offiveintegratedfirmsandfivefinishersthatareestimatedtohaveaccountedfor approximately90percentofU.S.productionoffinishedIMTDCsduring2015andapproximately twoͲthirdsofU.S.productionofunfinishedIMTDCs(basedonvalueandweightinpounds, ratherthanpieces).Inadditiontothefirmsnotedabove,theCommissionhaspresented separatelythedatasubmittedbyonefoundry(Waupaca)concerningitsU.S.castingoperations. ThesedataarenotaggregatedwiththeremainderofthedatasubmittedbytheU.S.industry becauseWaupaca’sdataappeartobesubstantiallyoverstatedbytheinclusionofexcluded
(…continued) HuaxiangGroupCo.,Ltd.(“Shanxi”);andShijiazhuangCAPTPowerTransmissionCo.,Ltd. (“Shijiazhuang”).TwofirmsinChinathatrespondedtothepreliminaryphasequestionnairedidnot respondtotheCommission’squestionnaireinthesefinalphaseinvestigations:FuzhouMinYue Mechanical&ElectricalCo.,Ltd.(“MinYue”)andMaskaPowerTransmission(Changzhou)Co.Ltd. (“Maska”).Maska,whichwasownedbyBaldor,permanentlycloseditsproductionfacilitiesinChinain late2014.Conferencetranscript,p.22(McCartney). 18CertainIronMechanicalTransferDriveComponentsFromthePeople’sRepublicofChina:Final AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016;and CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsFromthe People’sRepublicofChina:FinalAffirmativeDetermination,81FR75037,October28,2016.NOK(Wuxi) VibrationControlChinaCo.Ltd.(“NOKWuxi”)wasalsoselectedbyCommerceasamandatoryChinese respondentinitsinvestigations.However,onMarch30,2016,NOKWuxinotifiedCommerceofitsintent towithdrawfromtheinvestigations,contingentonCommerce’sacceptanceandinclusionofthe petitioner’sMarch30,2016amendmenttothescopethatsoughttoexcludecertainTVDs.OnApril19, 2016,NOKWuxiwithdrewfromCommerce’sinvestigationafterCommercepreliminarilydetermined thatTVDswereproperlyexcludedfromthescope.IssuesandDecisionMemorandumfortheFinal DeterminationintheCountervailingDutyInvestigationofCertainIronMechanicalTransferDrive ComponentsfromthePeople’sRepublicofChina,October21,2016,p.4. 19Asdiscussedbelow,smallͲdiameterIMTDCsarenotincludedinthescopeofimportedsubject merchandiseandareconsiderednonsubjectregardlessofthesourceofimports. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 75 of 218
IͲ6 merchandise,asindicatedinfootnote3inPartIIIofthisreport.Regardless,Waupaca’sdataare presentedseparatelyinappendixC(tablesCͲ2throughCͲ5),asitisaleadingsupplierofIMTDC castingsfor***.Waupaca’sunfinishedIMTDCsthatwerefinishedby***arereflectedinthe U.S.industry’sdataasfinishedIMTDCs.U.S.importsarebasedonquestionnaireresponsesof 25firmsthatareestimatedtohaveaccountedforatleastoneͲhalfofU.S.importsofIMTDCs during2015.Presentingadecisiveestimateiscomplicatedbytheinclusionofsubjectand nonsubjectmerchandiseinthevariousrelevantHTSUSprovisions,thelargenumberof potentialimportersidentifiedbyproprietaryCustomsdata(especiallycomparedtothe relativelysmallnumberofimportersidentifiedinthepetitions),thediversityofsizesand applicationsoftheproductatissue(makingitdifficulttoidentifyrelevantimportersby businesslineoraverageunitvalueonimports),andtheshiftingdefinitionofthesubject merchandiseitself.
PREVIOUSANDRELATEDINVESTIGATIONS IMTDCshavenotbeenthesubjectofanypriorantidumpingorcountervailingduty investigationsintheUnitedStates.
NATUREANDEXTENTOFSUBSIDIESANDSALESATLTFV Subsidies OnOctober28,2016,CommercepublishedanoticeintheFederalRegisterofitsfinal determinationofcountervailablesubsidiesforproducersandexportersofIMTDCsfrom China.20CommerceselectedPowermachImport&ExportCo.,Ltd.(Sichuan)(“Powermach”) andNOK(Wuxi)VibrationControlChinaCo.Ltd.(“NOKWuxi”)asmandatoryrespondents.The periodofCommerce’sinvestigationwasJanuary1,2014,throughDecember31,2014.
20CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe People’sRepublicofChina:FinalAffirmativeDetermination,81FR75037,October28,2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 76 of 218
IͲ7 Initsfinaldetermination,Commercefoundthefollowingprogramstobe countervailableandusedbyPowermach:21
- PolicyLoanstotheIMTDCIndustry
- ProvisionofInputs(pigiron,ferrousscrap,electricity,andlandͲuserightsinJiangsu andSichuanprovinces)forlessthanadequateremuneration(“LTAR”)
- ImportTariffandVATExemptionsforForeignͲInvestedEnterprises(“FIEs”)and CertainDomesticEnterprisesUsingImportedEquipmentinEncouragedIndustries
- PreferentialTaxRateforCompaniesintheWesternDevelopmentArea
- ReportedGrants
Initsfinaldeterminations,Commercefoundthefollowingprogramstobenotusedby, ornottoconferameasurablebenefitto,Powermach:22
- TreasuryBondLoansorGrants
- PreferentialLoansforKeyProjectsandTechnologies
- LoansandInterestSubsidiesProvidedPursuanttotheNortheastRevitalization Program
- ForeignTradeDevelopmentFundGrants
- ExportAssistanceGrants
- ExportInterestSubsidies
- SubsidiesforDevelopmentof“FamousBrands”andChinaWorldTopBrands
- SubͲCentralGovernmentSubsidiesforDevelopmentofFamousBrandsandChina WorldTopBrands
- FundsforOutwardExpansionofIndustriesinGuangdongProvince
- ProvincialFundforFiscalandInnovationTechnologies
- StateSpecialFundforPromotingKeyIndustriesandInnovationTechnologies
- ShandongProvince’sSpecialFundfortheEstablishmentofKeyEnterprise TechnologyCenters
- GrantsforAntidumpingInvestigations
- ShandongProvince’sAwardFundforIndustrializationofKeyEnergyͲSaving Technology
- ShandongProvince’sEnvironmentalProtectionIndustryResearchandDevelopment Funds
- WasteWaterTreatmentSubsidies
- FundsofGuangdongProvincetoSupporttheAdoptionofEͲCommercebyForeign TradeEnterprises
21IssuesandDecisionMemorandumfortheFinalDeterminationintheCountervailingDuty InvestigationofCertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina, October21,2016,pp.8Ͳ10. 22Ibid.,p.10. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 77 of 218
IͲ8 18. TechnologytoImproveTradeResearchandDevelopmentFund 19. ProvisionofWaterforLTAR 20. ProvisionofLandtoStateOwnedEnterprises(“SOEs”)forLTAR 21. IncomeTaxReductionsunderArticle28oftheEnterpriseIncomeTaxLaw(“EITL”) 22. TaxOffsetsforResearchandDevelopmentundertheEITL 23. IncomeTaxReductionsforExportͲOrientedFIEs 24. IncomeTaxBenefitsforFIEsBasedonGeographicLocations 25. LocalIncomeTaxExemptionandReductionProgramsfor“Productive”FIEs 26. TaxOffsetsforResearchandDevelopmentbyFIEs 27. TaxRefundsforReinvestmentofFIEProfitsinExportͲOrientedEnterprises 28. PreferentialTaxProgramsforFIEsRecognizedasHighorNewTechnology Enterprises 29. PreferentialIncomeTaxPolicyforEnterprisesintheNortheastRegion 30. ForgivenessofTaxArrearsForEnterprisesLocatedintheOldIndustrialBasesof NortheastChina 31. ValueAddedTax(“VAT”)RebateExemptionsonFIEPurchasesofChineseͲMade Equipment 32. VATandTariffExemptionsforPurchasesofFixedAssetsUndertheForeignTrade DevelopmentFundProgram 33. IncomeTaxCreditsforDomesticallyOwnedCompaniesPurchasingDomestically ProducedEquipment
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 78 of 218
IͲ9 TableIͲ1presentsCommerce’sfinaldeterminationofsubsidizationoflargeͲdiameter IMTDCsfromChina.
Table I-1 IMTDCs: Commerce’s final subsidy determination with respect to imports from China Company Final countervailable subsidy margin (percent) Powermach Import & Export Co., Ltd. (Sichuan), Sichuan Dawn Precision Technology Co., Ltd., Sichuan Dawn Foundry Co. Ltd., and Powermach Machinery Co., Ltd. 33.26 NOK (Wuxi) Vibration Control China Co., Ltd., and Wuxi NOK - Freudenberg Oil Seal Co., Ltd.; Changzhou Baoxin Metallurgy Equipment Manufacturing Co. Ltd.; Changzhou Changjiang Gear Co., Ltd.; Changzhou Gangyou Lifting Equipment Co., Ltd.; Changzhou Juling Foundry Co., Ltd.; Changzhou Liangjiu Mechanical Manufacturing Co Ltd.; Changzhou New Century Sprocket Group Company; Changzhou Xiangjin Precision Machinery Co., Ltd.; FIT Bearings; Fuzhou Minyue Mechanical & Electrical Co., Ltd.; Hangzhou Chinabase Machinery Co., Ltd.; Hangzhou Ever Power Transmission Group; Hangzhou Vision Chain Transmission Co., Ltd.; Hangzhou Xingda Machinery Co., Ltd.; Henan Xinda International Trading Co., Ltd.; Henan Zhiyuan Machinery Sprocket Co. Ltd.; Jiangsu Songlin Automobile Parts Co., Ltd.; Martin Sprocket & Gear (Changzhou) Co., Ltd.; Ningbo Blue Machines Co., Ltd.; Ningbo Fulong Synchronous Belt Co., Ltd.; Ningbo Royu Machinery Co., Ltd.; Praxair Surface Technologies; Qingdao Dazheng Jin Hao International Trade Co., Ltd.; Quanzhou Licheng Xintang Automobile Parts Co., Ltd. (“XTP Auto Parts”) Shangyu Shengtai Machinery Co., Ltd.; Shenzhen Derui Sourcing Co., Ltd.; Shengzhou Shuangdong Machinery Co., Ltd.; Shengzhou Xinglong Machinery; Sichuan Reach Jiayuan Machinery Co. Ltd.; Tran-Auto Industries Co. Ltd.; Ubet Machinery1 163.46 All others 33.26 1 Non-cooperative companies to which an adverse facts available rate was applied. Source: 81 FR 75037, October 28, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 79 of 218
IͲ10 SalesatLTFV OnOctober28,2016,CommercepublishednoticesintheFederalRegisterofitsfinal determinationsofsalesatLTFVwithrespecttoimportsoflargeͲdiameterIMTDCsfrom Canada23andChina. 24TablesIͲ2andIͲ3presentCommerce’sdumpingmarginswithrespectto importsofIMTDCsfromCanadaandChina. Table I-2 IMTDCs: Commerce’s final weighted-average LTFV margins with respect to imports from Canada Manufacturer/exporter Final dumping margin (percent) Baldor Electric Company Canada 1 191.34 All others 100.47 1 Non-cooperative company to which an adverse facts available rate was applied. Source: 81 FR 75039, October 28, 2016.
23CertainIronMechanicalTransferDriveComponentsfromCanada:FinalAffirmativeDetermination ofSalesatLessThanFairValue,81FR75039,October28,2016. 24CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina:Final AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 80 of 218
IͲ11 Table I-3 IMTDCs: Commerce’s final weighted-average LTFV margins with respect to imports from China Exporter Producer Final dumping margin (percent) Powermach Import & Export Co., Ltd. (Sichuan) / Sichuan Dawn Precision Technology Co., Ltd. / Sichuan Dawn Foundry Co., Ltd. / Powermach Co., Ltd. Powermach Import & Export Co., Ltd. (Sichuan) / Sichuan Dawn Precision Technology Co., Ltd. / Sichuan Dawn Foundry Co., Ltd. / Powermach Co., Ltd. 13.64 Fuqing Jiacheng Trading Corporation Limited Fuzhou Min Yue Mechanical & Electrical Co., Ltd. 13.64 Haiyang Jingweida Gearing Co., Ltd. Haiyang Jingweida Gearing Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Shijiazhuang CAPT Power Transmission Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Shanghai CPT Machinery Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Yueqing Bethel Shaft Collar Manufacturing Co., Ltd 13.64 Hangzhou Powertrans Co., Ltd. Kezheng (Fuzhou) Mechanical & Electrical Manufacture Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Handan Hengfa Transmission Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Shijiazhuang Lihua Mechanical Manufacturing Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Xingtai Shengjia Machinery and Equipment Factory 13.64 Hangzhou Powertrans Co., Ltd. Shanghai Keli Machinery Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Jiangsu Zhengya Technology Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Taizhou Feiyang Metal Spinning Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Taizhou Pengxun Machinery Manufacturing Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Guangde Ronghua Machinery Manufacturing Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Qiuxian Hengxin Machinery Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Reach Machinery Enterprise 13.64 Hangzhou Powertrans Co., Ltd. Chengdu Novo Machinery Co., Ltd. 13.64 Hangzhou Powertrans Co., Ltd. Chengdu Leno Machinery Co., Ltd. 13.64 Shijiazhuang CAPT Power Transmission Co., Ltd. Shijiazhuang CAPT Power Transmission Co., Ltd. 13.64 Xinguang Technology Co. Ltd of Sichuan Province Sichuan Dawn Precision Technology Co., Ltd. 13.64 PRC-wide entity 401.68 Source: 81 FR 75032, October 28, 2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 81 of 218
IͲ12 THESUBJECTMERCHANDISE Commerce’sscope Commercehasdefinedthescopeoftheseinvestigationsinitsfinaldeterminationsas follows:
Theproductscoveredbythisinvestigationareironmechanicaltransfer drivecomponents,whetherfinishedorunfinished(i.e.,blanksorcastings). Subjectironmechanicaltransferdrivecomponentsareintheformof wheelsorcylinderswithacenterboreholethatmayhaveoneormore groovesorteethintheiroutercircumferencethatguideormeshwitha flatorribbedbeltorlikedeviceandareoftenreferredtoassheaves, pulleys,flywheels,flatpulleys,idlers,conveyerpulleys,synchronous sheaves,andtimingpulleys.Theproductscoveredbythisinvestigation alsoincludebushings,whichareironmechanicaltransferdrive componentsintheformofacylinderandwhichfitintotheboreholesof othermechanicaltransferdrivecomponentstolockthemintodriveshafts bymeansofelementssuchasteeth,bolts,orscrews.
Ironmechanicaltransferdrivecomponentssubjecttothisinvestigation arethosenotlessthan4.00inches(101mm)inthemaximumnominal outerdiameter.
Unfinishedironmechanicaltransferdrivecomponents(i.e.,blanksor castings)possesstheapproximateshapeofthefinishedironmechanical transferdrivecomponentandhavenotyetbeenmachinedtofinal specificationaftertheinitialcasting,forgingorlikeoperations.These machiningprocessesmayincludecutting,punching,notching,boring, threading,mitering,orchamfering.
Subjectmerchandiseincludesironmechanicaltransferdrivecomponents asdefinedabovethathavebeenfinishedormachinedinathirdcountry, includingbutnotlimitedtofinishing/machiningprocessessuchascutting, punching,notching,boring,threading,mitering,orchamfering,orany otherprocessingthatwouldnototherwiseremovethemerchandisefrom thescopeoftheinvestigationifperformedinthecountryofmanufacture oftheironmechanicaltransferdrivecomponents.
Subjectironmechanicaltransferdrivecomponentsarecoveredbythe scopeoftheinvestigationregardlessofwidth,design,orirontype(e.g., gray,white,orductileiron).Subjectironmechanicaltransferdrive componentsarecoveredbythescopeoftheinvestigationregardlessof whethertheyhavenonͲironattachmentsorpartsandregardlessof Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 82 of 218
IͲ13 whethertheyareenteredwithothermechanicaltransferdrive componentsoraspartofamechanicaltransferdriveassembly(which typicallyincludesoneormoreoftheironmechanicaltransferdrive componentsidentifiedabove,andwhichmayalsoincludeotherparts suchasabelt,couplingand/orshaft).Whenenteredasamechanical transferdriveassembly,onlytheironcomponentsthatmeetthephysical descriptionofcoveredmerchandisearecoveredmerchandise,notthe othercomponentsinthemechanicaltransferdriveassembly(e.g.,belt, coupling,shaft).However,thescopeexcludesflywheelswitharinggear permanentlyattachedontotheouterdiameter.Aringgearisasteelring withconvexexternalteethcutormachinedintotheouterdiameter,and wherethediameteroftheringexceeds200mmanddoesn’texceed 2,244.3mm.
Forpurposesofthisinvestigation,acoveredproductisof“iron”where thearticlehasacarboncontentof1.7percentbyweightorabove, regardlessofthepresenceandamountofadditionalalloyingelements.
Excludedfromthescopearefinishedtorsionalvibrationdampers(TVDs). AfinishedTVDisanenginecomponentcomposedofthreeseparate components:aninnerring,arubberringandanouterring.Theinnerring isanironwheelorcylinderwithaboreholetofitacrankshaftwhich formsasealtopreventleakageofoilfromtheengine.Therubberringisa {damping}mediumbetweentheinnerandouterringsthateffectively reducesthetorsionalvibration.Theouterring,whichmaybemadeof materialsotherthaniron,mayormaynothavegroovesinitsouter circumference.ToconstituteafinishedexcludedTVD,theproductmustbe composedofeachofthethreepartsidentifiedaboveandthethreeparts mustbepermanentlyaffixedtooneanothersuchthatboththeinnerring andtheouterringarepermanentlyaffixedtotherubberring.Afinished TVDisexcludedonlyifitmeetsthephysicaldescriptionprovidedabove; merchandisethatotherwisemeetsthedescriptionofthescopeanddoes notsatisfythephysicaldescriptionofexcludedfinishedTVDsaboveisstill coveredbythescopeoftheinvestigationregardlessofenduseor identificationasaTVD.
AlsoexcludedfromthescopearecertainTVDinnerrings.Toconstitutean excludedTVDinnerring,theproductmusthaveeachofthefollowing characteristics:(1)asinglecontinuouscurveformingaprotrusionor indentationonoutersurface,alsoknownasasinelock,withaheightor Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 83 of 218
IͲ14 depthnotlessthan1.5millimetersandnotexceeding4.0millimetersand withawidthofatleast10millimetersasmeasuredacrossthesinelock fromoneedgeofthecurvetotheother;25(2)afacewidthoftheouter diameterofgreaterthanorequalto20millimetersbutlessthanorequal to80millimeters;(3)anoutsidediametergreaterthanorequalto101 millimetersbutlessthanorequalto300millimeters;and(4)aweightnot exceeding7kilograms.ATVDinnerringisexcludedonlyifitmeetsthe physicaldescriptionprovidedabove;merchandisethatotherwisemeets thedescriptionofthescopeanddoesnotsatisfythephysicaldescription ofexcludedTVDinnerringsisstillcoveredbythescopeofthis investigationregardlessofenduseoridentificationasaTVDinnerring.
ThescopealsoexcludeslightͲduty,fixedͲpitch,nonͲsynchronoussheaves (“excludableLDFPNsheaves”)witheachofthefollowingcharacteristics: MadefromgreyirondesignatedasASTM(NorthAmericanspecification) Grade30orlower,GB/T(Chinesespecification)GradeHT200orlower, DIN(Germanspecification)GG20orlower,orEN(Europeanspecification) EN–GJL200orlower;havingnomorethantwogrooves;havinga maximumfacewidthofnomorethan1.75inches,wherethefacewidthis thewidthofthepartatitsoutsidediameter;havingamaximumoutside diameterofnotmorethan18.75inches;andhavingnoteethonthe outsideordatumdiameter.ExcludableLDFPNsheavesmustalsoeither haveamaximumstraightboresizeof1.6875incheswithamaximumhub diameterof2.875inches;orelsehaveataperedboremeasuring1.625 inchesatthelargeend,amaximumhubdiameterof3.50inches,alength throughtaperedboreof1.0inches,exactlytwotappedholesthatare180 degreesapart,anda2.0Ͳinchboltcircleonthefaceofthehub.Excludable LDFPNsheavesmorethan6.75inchesinoutsidediametermustalsohave anarmorspokeconstruction. 26
25Theedgesofthesinelockcurvearedefinedasthepointswherethesurfaceoftheinnerringisno longerparalleltotheplaneformedbytheinnersurfaceoftheboreholethatattachestheringtothe crankshaft. 26Anarmorspokeconstructioniswherearmsorspokes(typically3to6)connecttheoutside diameterofthesheavewiththehubofthesheave.Thisisincontrasttoablockconstruction(inwhich thematerialbetweenthehubandtheoutsidediameterissolidwithauniformthicknessthatisthe samethicknessasthehubofthesheave)orawebconstruction(inwhichthematerialbetweenthehub andtheoutsidediameterissolidbutisthinnerthanatthehubofthesheave). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 84 of 218
IͲ15 Further,excludableLDFPNsheavesmusthaveagrooveprofileas indicatedinthetablebelow:
Size (belt profile)
Outside diameter (inches) Top width range of each groove (inches)
Maximum height (inches)
Angle MA/AK (A, 3L, 4L) ..................................................... d5.45 .................................................... 0.484–0.499 0.531 34 MA/AK (A, 3L, 4L) ..................................................... >5.45 but d18.75 .................................. 0.499–0.509 0.531 38 MB/BK (A, B, 4L, 5L) ................................................ d7.40 .................................................... 0.607–0.618 0.632 34 MB/BK (A, B, 4L, 5L) ................................................ >7.40 but d18.75 .................................. 0.620–0.631 0.635 38
Inadditiontotheabovecharacteristics,excludableLDFPNsheavesmust alsohaveamaximumweight(poundsͲperͲpiece)asfollows:For excludableLDFPNsheaveswithonegrooveandanoutsidediameterof greaterthan4.0inchesbutlessthanorequalto8.0inches,themaximum weightis4.7pounds;forexcludableLDFPNsheaveswithtwogroovesand anoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto 8.0inches,themaximumweightis8.5pounds;forexcludableLDFPN sheaveswithonegrooveandanoutsidediameterofgreaterthan8.0 inchesbutlessthanorequalto12.0inches,themaximumweightis8.5 pounds;forexcludableLDFPNsheaveswithtwogroovesandanoutside diameterofgreaterthan8.0inchesbutlessthanorequalto12.0inches, themaximumweightis15.0pounds;forexcludableLDFPNsheaveswith onegrooveandanoutsidediameterofgreaterthan12.0inchesbutless thanorequalto15.0inches,themaximumweightis13.3pounds;for excludableLDFPNsheaveswithtwogroovesandanoutsidediameterof greaterthan12.0inchesbutlessthanorequalto15.0inches,the maximumweightis17.5pounds;forexcludableLDFPNsheaveswithone grooveandanoutsidediameterofgreaterthan15.0inchesbutlessthan orequalto18.75inches,themaximumweightis16.5pounds;andfor excludableLDFPNsheaveswithtwogroovesandanoutsidediameterof greaterthan15.0inchesbutlessthanorequalto18.75inches,the maximumweightis26.5pounds.
ThescopealsoexcludeslightͲduty,variableͲpitch,nonͲsynchronous sheaveswitheachofthefollowingcharacteristics:Madefromgreyiron designatedasASTM(NorthAmericanspecification)Grade30or lower,GB/T(Chinesespecification)GradeHT200orlower,DIN(German specification)GG20orlower,orEN(Europeanspecification)EN–GJL200 orlower;havingnomorethan2grooves;havingamaximumoverall widthoflessthan2.25incheswithasinglegroove,orof3.25inchesor lesswithtwogrooves;havingamaximumoutsidediameterofnotmore than7.5inches;havingamaximumboresizeof1.625inches;having eitheroneortwoidentical,internallyͲthreaded(i.e.,withthreadsonthe insidediameter),adjustable(rotating)flange(s)onanexternallyͲthreaded Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 85 of 218
IͲ16 hub(i.e.,withthreadsontheoutsidediameter)thatenable(s)thewidth (opening)ofthegroovetobechanged;andhavingnoteethonthe outsideordatumdiameter.
ThescopealsoexcludescertainIMTDCbushings.AnIMTDCbushingis excludedonlyifithasataperedangleofgreaterthanorequalto10 degrees,wheretheangleismeasuredbetweenoneoutsidetapered surfaceandthedirectlyopposingoutsidetaperedsurface.27
Tarifftreatment BaseduponthescopesetforthbyCommerce,themerchandisesubjecttothese investigationsisimportedunderthefollowingstatisticalreportingnumbersoftheHarmonized TariffScheduleoftheUnitedStates(“HTS”):8483.30.8090,8483.50.6000,8483.50.9040, 8483.50.9080,and8483.90.8080.ThescopealsoidentifiesHTSstatisticalreportingnumber 8483.90.3000,whichcoverspartsofbearinghousingsandplainshaftbearings,otherthanparts offlanges,takeͲup,cartridge,andhangerunits.GoodsimportedundertheseHTSstatistical reportingnumbersaredutiableatgeneraldutyratesfrom2.8percentto4.5percentad valorem.CoveredmerchandisemayalsobeimportedunderthefollowingHTSstatistical reportingnumbers:7325.10.0080,7325.99.1000,7326.19.0010,7326.19.0080,8431.31.0040, 8431.31.0060,8431.39.0010,8431.39.0050,8431.39.0070,8431.39.0080,and8483.50.4000. Generaldutyratesonthesegoodsrangefromfreeto5.7percentadvalorem.28
27CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina:Final AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016. 28Decisionsonthetariffclassificationandtreatmentofimportedgoodsarewithintheauthorityof U.S.CustomsandBorderProtection. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 86 of 218
IͲ17 THEPRODUCT Descriptionandapplications CharacteristicsandfunctionsofIMTDCs IMTDCsaretypicallygrayorductileiron 29blanksorcastings(ifunfinished)orwheelsor cylinders(iffinished)knownassheaves(alsocommonlyreferredtoaspulleys)(figureIͲ1).The subjectIMTDCsarethosewithcarboncontents,byweight,of1.7percentorabove, 30regardless ofthepresenceandamountofadditionalalloyingelements.IMTDCsalsoincludebushings, whichareusedtoconnecttheshafttothesheave.UnfinishedIMTDCs(alsoreferredtoas blanksorcastings)possesstheapproximateshapeofthefinishedIMTDCs,buthavenotyet beenmachinedtothefinalspecifications.
29Nonsubjectmechanicaltransferdrivecomponentsareproducedfromothermaterials,including aluminum,plastic,andsteel.Theymayalsobemadefrompowdermetals,whichare“discreteparticles ofelementalmetalsorofmixturesofelementalmetalsorofalloys.”Thesevariousmetalshavedifferent strengthsandmaximumpossiblerimspeedsforsheaves.Forexample,agrayironsheavemayhavea maximumrimspeedof6,500to7,500feetperminute(fpm)(dependingontheclassofmaterial),a ductileironsheave8,000to9,000fpm,asteelsheave9,000to11,000fpm,apowdermetal(sintered steel)sheave7,000to9,000fpm,andaluminum11,000to15,000fpm.Conferencetranscript,p.19 (McCartney);GatesCorp.,MetalsTechnicalGuide,pp.1Ͳ5, https://www.gates.com//media/files/gates/industrial/powerͲtransmission/manuals/metalsͲtechnicalͲ guide.pdf(accessedNovember21,2015);andMetalPowderIndustriesFederationWebsite, https://www.mpif.org/AboutMPIF/mppa.asp?linkid=31(accessedNovember28,2015). 30Ironistypicallydefinedashavingacarboncontentofmorethan2percent.AtlasFoundry CompanyWebsite,http://www.atlasfdry.com/castͲirons.htm(accessedNovember27,2015);and EngineersHandbookWebsite,http://www.engineershandbook.com/Materials/castiron.htm(accessed November27,2015).Steelhasacarboncontentoflessthan2percent,withmostcommercially availablesteellessthan1percent.AtlasFoundryCompanyWebsite,http://www.atlasfdry.com/castͲ irons.htm(accessedNovember27,2015).Thefivetypesofironincludegrayiron,ductileiron,malleable iron,compactedgraphiteiron(CGI)andwhiteiron.Therecanbeoverlapinthechemicalcompositionof theseirons,andtheyaredefinedbytheirstructure.Grayiron,forexample,“containsalargeamountof carbonintheformofgraygraphiteflakes,”whileinductileiron“thegraphiteisintheshapeofspheres ornodules.”Gray,ductile,andwhiteironwithmorethan3percentofanalloyareoftenreferredtoas highͲalloyiron.GatesCorp.,MetalsTechnicalGuide,pp.1Ͳ5, https://www.gates.com//media/files/gates/industrial/powerͲtransmission/manuals/metalsͲtechnicalͲ guide.pdf(accessedNovember21,2015);AtlasFoundryCompanyWebsite, http://www.atlasfdry.com/castͲirons.htm(accessedNovember27,2015);andEngineersHandbook Website,http://www.engineershandbook.com/Materials/castiron.htm(accessedNovember27,2015). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 87 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 88 of 218
IͲ19 VͲbeltdrives AcommontypeofbeltdriveistheVͲbeltdrive.33TheVͲbeltdriveusesabeltshapedlike aVthatusuallyfitsintoshapedgroovesinthesheave(figureIͲ2).Thisconfigurationprovides advantagesinsomeapplications,suchaslowerbearingloadsandlongerbeltlife,ascompared toflatpulleys(discussedbelow).Thesheavemayhaveonegrooveormultiplegrooves. 34 Figure I-2 IMTDCs: Classical V-belt, classical banded V-belt, classical cog V-belt, and classical cog banded V-belts (from left to right)
Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. B2-13. ThemaintypesofVͲbeltdrivesareclassical,narrow,andlightduty.Classicaldrivesare theoriginalVͲbeltdrivesusedinindustry.NarrowVͲbeltdrivesweredevelopedlaterwithnew materials,suchthatathinnerbeltcouldcarrythesameloadasaclassicalVͲbelt. 35LightdutyVͲ beltdrivesaredesignedforuseinapplicationsinvolvinglessthan15horsepower,anddonot exceed18.75inchesindiameter.36
33Hearingtranscript,p.16(Juergens). 34JosephL.Foszcz,“BasicsofBeltDrives,”PlantEngineering,September1,2001, http://www.plantengineering.com/singleͲarticle/basicsͲofͲbeltͲ drives/981c1be10d400323db10aa592e4cc7b3.html;ArthurG.ErdmanandRaymondGiese,“BeltDrive,” AccessScience,2014,http://www.accessscience.com/content/beltͲdrive/078100;andTBW,“Belt Drives,Sheaves,andCouplings,”p.B2Ͳ13. 35GregCober,“UnderstandingTradeͲOffsWhenSelectingBeltedDriveSystems,”TBW,p.2, http://www.altraliterature.com/pdfs/PͲ7636ͲTBW.pdf(accessedNovember11,2015). 36Alightdutysheaveuseslessmaterialandislighterthanasheaveofthesamediameter.Certain lightdutysheavesareexcludedfromthescopeoftheinvestigation.Conferencetranscript,pp.47Ͳ48 (McCartney)and71Ͳ72(Luberda). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 89 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 90 of 218
IͲ21 Flatpulleys Flatpulleysaresheavesthatdonothavegroovesandtypicallyuseflatbelts(figureIͲ4). FlatbeltdrivesaremoreefficientthanVͲbeltdrives,buthavedrawbackssuchashigherbearing loadsandmorewearonthebelt,asnotedabove.Inmanyflatbeltdrives,pulleysarerounded sothatthecenterisslightlyraised(orcrowned)toimprovethebeltalignment. 39Inretrofit applications,itispossiblethatonlyonesheaveinthedrivewillbereplacedwithaVͲbeltsheave (withtheotherremainingaflatpulley).Inthesedrives,theflatpulleywilluseaVͲbelt.40
Figure I-4 IMTDCs: Flat pulley Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. B5-1.
39JosephL.Foszcz,“BasicsofBeltDrives,”PlantEngineering,September1,2001, http://www.plantengineering.com/singleͲarticle/basicsͲofͲbeltͲ drives/981c1be10d400323db10aa592e4cc7b3.html;andTBW,“BeltDrives,Sheaves,andCouplings,” pp.B5Ͳ5. 40TBW,“BeltDrives,Sheaves,andCouplings,”p.BEVͲ8. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 91 of 218
IͲ22 Synchronousdrives Synchronousdrives,includingtimingpulleys,usebeltswithteethandsheaveswith correspondinggrooves(figureIͲ5). 41Sheavesforsynchronousbeltdrivesmayalsoreferredto assprockets.42SynchronousdrivesaretypicallymoreexpensivethanVͲbeltdrives,butoffera numberofadvantages,includinghighefficiency,constantspeeds,lowerbearingloads,and loweroperationandmaintenancecosts.Theycanalsobeusedinapplications,suchasthose requiringmoreprecisetiming,thathavenottraditionallyusedbeltdrives. 43Therehavebeena numberofimprovementsinsynchronousdrivesovertime—includingincreasingload capacities—andtheyarethefastestgrowingportionoftheIMTDCmarket.44
Figure I-5 IMTDCs: Synchronous belt drive
Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. C1-1.
41Hearingtranscript,pp.14,16(Juergens). 42Hearingtranscript,p.16(Juergens);conferencetranscript,p.142(Price).Sprocketsthatare toothedwheelsthatengagewithchains,ratherthanbelts,andgearsthataretoothedwheelsthat transferenergybyengagingwithothergearsarenotincludedinthescopeoftheinvestigations. 43Synchronousdrivesarealsosometimesreferredtoaschainbeltdrives.TBW,“BeltDrives,Sheaves, andCouplings,”pp.C1Ͳ2Ͳ3;andGregCoper,“UnderstandingTradeͲOffsWhenSelectingBeltedDrive Systems,”TBW,pp.3Ͳ4,http://www.altraliterature.com/pdfs/PͲ7636ͲTBW.pdf(accessedNovember11, 2015). 44Conferencetranscript,p.79(McCartney). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 92 of 218
IͲ23 OtherIMTDCsforpowertransferapplications OthertypesofIMTDCsincludevariablespeeddrives 45andconveyorpulleys.Variable andadjustabledrivespermitoutputspeedchangesbyadjustingthediameterofthesheave, whichresultsinafasterorslowerspeed(figureIͲ6). 46Somedrivesrequiremanualspeed adjustment,47whereasotherscanbeadjustedwhilethedriveisinmotion. 48Conveyorpulleys, includingdrumpulleys,arecylindricallyshapedpulleysusedformovingaconveyorbelt. 49
Figure I-6 IMTDCs: Manually adjustable sheave (left) and cross section of a variable speed sheave (right) Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. D1-44 (left) and D1-14 (right).
45Thesearesometimesreferredtoasvariablepitchdrives,whilethosethatdonotallowforspeed adjustmentsarereferredtoasfixedpitchdrives.RegalPowerTransmissionSolutions,BeltDrive Monthly,vol.29,December2010, http://www.regalpts.com/PowerTransmissionSolutions/Other/Belt%20Drive%20Monthly's/Form 9406E .pdf. 46Thetermvariablespeeddriveisusedheretorefertobeltdrives,butcanalsorefertovariable frequencydrives(VFDs).VFDsvarythefrequencyandvoltagedeliveredtoanACmotortochangethe speedofthemotor.WithVFDs,themotorisoftendirectlyconnectedto,forexample,afan,whilewitha beltdrivesystemtheengineormotorisconnectedbythebelt.VFDs.comWebsite, http://www.vfds.com/blog/whatͲisͲaͲvfd(accessedSeptember9,2016). 47Forexample,certainTBWsheavesareadjustedby“looseningtheclampingscrewsandturninga singleadjustingscrew.”TBW,“BeltDrives,Sheaves,andCouplings,”pp.D1Ͳ44. 48TBW,“BeltDrives,Sheaves,andCouplings,”p.D1Ͳ44. 49MartinSprocketandGearWebsite,http://www.martinsprocket.com/products/conveyorͲpulleys (accessedNovember10,2015);andBaldorWebsite,http://www.baldor.com/brands/baldorͲ dodge/products/conveyorͲcomponents/pulleys/drumͲpulleys(accessedNovember10,2015). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 93 of 218
IͲ24 Flywheelsandidlerpulleys WhilethefunctionofmostIMTDCsistotransmitpowerfromoneshafttoanother, flywheelandidlerpulleysdonothaveapowertransmissionfunction.Flywheelsarerotating mechanicaldevicesthatareusedtostorerotationalenergy(figureIͲ7).Therotational momentumoftheflywheelisusedtoprovidecontinuousenergyinapplicationswhereenergy isvariable,suchaswithareciprocating(piston)engine.50Flywheelsandsheavesmaybe producedseparatelysothattheycanbeplacedondifferentpartsoftheshaft,ormaybe producedasapartofthesameunit(knownasaflywheelsheave).51Flywheelsheavescanbe largeinsize.Forexample,oneprojectduringtheperiodinvolvedflywheelsheavesupto62 inchesindiameterandupto7,000pounds. 52
Figure I-7 IMTDCs: Flywheel Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. B5-5. Flywheelswitharinggearpermanentlyattachedontotheouterdiameterareexcluded fromthescope.Aringgearisasteelringwithconvexexternalteethcutormachinedintothe outerdiameterthatengageswithanothergear.53
50Conferencetranscript,pp.57–58(McCartney)and138–139(Christenson);TBW,“BeltDrives, Sheaves,andCouplings,”p.B1Ͳ70;andBaldor’spostconferencebrief,exh.1,pp.17–18. 51Conferencetranscript,p.139(Christenson). 52TBW,“TBWood's&NuttallGearTeamuptoprovideCustomSheavesandShaftAssembliesfor OneWorldTradeCenterExpressElevators,”January14,2014, http://www.tbwoods.com/newsroom/2014/01/OneͲWorldͲTradeͲCenterͲElevators. 53EngineeringDictionaryWebsite,http://www.engineeringͲdictionary.org/Flywheel ring gear (accessedOctober31,2016). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 94 of 218
IͲ25 Idlerpulleysareplacedinsideoroutsideofthedrive,andareusedtoincreasetension, provideproperalignment,reducetheextenttowhichthebeltcanwhip,andredirectthebelts (figureIͲ8).Theyarenotusedtodrivethepulleysystem.Idlerpulleysareusedinarangeof applications,includingwithconveyorbelts.54
Figure I-8 IMTDCs: Schematic of a conveyor belt with idler pulleys (right) Source: Diagram developed based on information in PCI, Conveyor Pulley Selection Guide, November 2014, p. 4, http://www.pcimfg.com/wp-content/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf.
54PCI,ConveyorPulleySelectionGuide,November2014,p.4,http://www.pcimfg.com/wpͲ content/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf;andTBW,“BeltDrives,Sheaves,and Couplings,”p.BEVͲ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 95 of 218
IͲ26 Bushings Bushingsareusedtoconnecttheshafttothesheave.55Standardbushingsizesand configurationsaresetbytheMechanicalPowerTransmissionAssociation(“MPTA”).Thereare threemainbushingtypes,basedonthenumberofscrewholesinthebushing(figureIͲ9). Standarddiametersrangefrom2.0inchesto17.8inches.Standardbushinglengthsare0.7to 15.7inches.Somebushingsaretapered,withthediameterononeendwiderthanthediameter ontheotherend.MPTAstandardtaperedbushingshaveanominaltaperedangleof8degrees andlargeenddiametersrangingfrom1.4to17.2inches.Inadditiontothesebushingtypes, therearearangeofotherbushingsonthemarket,suchasthoseinmetricdimensionsand flangelessbushings. 56 Figure I-9 IMTDCs: Three standard types of bushings Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. A1-3.
55Hearingtranscript,p.16(Juergens). 56MPTA,“QuickDetachableBushing&MatingHubStandard,”MPTAͲB6iͲ2010,2010, http://www.mpta.org/MPTAPubs.htm;MPTA,“TaperͲLockBushing&MatingHubStandard,”MPTAͲB9iͲ 2013,2013,pp.4–6;andTBW,“BeltDrives,Sheaves,andCouplings,”pp.A1Ͳ3–A2Ͳ5. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 96 of 218
IͲ27 UsesforIMTDCs TestimonybythepetitioneratthestaffconferenceindicatedthatunfinishedIMTDCs areprimarilyusedintheproductionoffinishedIMTDCs. 57Theymaybefinishedatalocation adjacenttothefoundry(asdiscussedbelow),finishedatadifferentlocationbythesame company,orsoldtoacompanythatfinishestheproducts. 58 MostfinishedIMTDCsareusedtotransmitpowerfromamotororenginetoproducts suchasfans,conveyors,compressors,pumps,andmixers(figureIͲ10). 59VͲbeltdrives, synchronousdrives,andflatpulleysareallusedtoperformthisfunctionwherethespeedof thedrivedoesnotneedtobeadjusted.Wherespeedadjustmentsareneeded,variableand adjustablespeeddrivesareused.Conveyorpulleysareusedtodriveaconveyorbelt.In addition,flywheelandidlerpulleyscanbeusedinabeltdrivesystem,thoughtheirprimary functiondiffersfromthatofotherIMTDCs.Flywheelsareusedtostorerotationalenergy,as notedabove,whileidlerpulleysareusedtoincreasetension,provideproperalignment,reduce theextenttowhichthebeltcanwhip,andredirectthebelts.60
Figure I-10 IMTDCs: Synchronous belt drive connecting a motor to a vacuum pump Source: TBW, “TB Wood's Custom QT Power Chain II Synchronous Drive for Paper Mill Vacuum Pump,” December 18, 2014, http://www.tbwoods.com/newsroom/2014/12/Custom-QT-Power-Chain-II-for-Paper- Mill-Vacuum-Pump.
57Conferencetranscript,p.85(McCartney). 58Conferencetranscript,pp.10,30(Luberda)andp.101(Crist). 59Conferencetranscript,p.92(Coder);hearingtranscript,pp.13Ͳ14(Juergens). 60Certainflywheelsareexcludedfromthescopeasnotedabove.Conferencetranscript,pp.57Ͳ58 (McCartney)and138–139(Christenson);TBW,“BeltDrives,Sheaves,andCouplings,”p.B1Ͳ70;Baldor’s postconferencebrief,exh.1,pp.17Ͳ18;PCI,ConveyorPulleySelectionGuide,November2014,p.4, http://www.pcimfg.com/wpͲcontent/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf;and TBW,“BeltDrives,Sheaves,andCouplings,”p.BEVͲ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 97 of 218
IͲ28 MarketsforIMTDCs Asnotedabove,unfinishedIMTDCsareprimarilyusedintheproductionoffinished IMTDCs.ThemarketforunfinishedIMTDCs,therefore,isprimarilycomprisedofcompaniesthat finishIMTDCs. 61 FinishedIMTDCsaretypicallysoldtoeitherOEMsthatproducemachinery,orto distributors. 63DistributorstypicallysellIMTDCstosmallOEMsandintothereplacementparts market.IMTDCusersneedtoreplacebeltsmorefrequently,butoccasionallyalsoneedto replacesheavesthathavewornout.64 FinishedIMTDCsareusedinarangeofapplications,suchasmining,oilfield,material handling,agricultural,dieselengine,forestryandlogging,construction,manufacturing,other industrial,andheating,ventilating,andairconditioning(HVAC)applications. 65Inmaterial handlingapplications,forexample,conveyorpulleysareusedinapplicationssuchasmining, productpackaging,foodprocessing,powergeneration,andrecycling(figuresIͲ11andIͲ12). 66
61Conferencetranscript,pp.10,30(Luberda)andp.101(Crist).SeePartIIIregardingreportedsales ofunfinishedIMTDCsdirectlytooriginalequipmentmanufacturers(“OEMs”). 63Hearingtranscript,p.80(Christenson). 64TBWstatedthatreplacementpartsaccountforcloseto40percentofitsbusiness.Hearing transcript,pp.90Ͳ91(Christenson). 65BothsmallͲdiameterandlargeͲdiameterIMTDCsareusedinusedinarangeofapplications,some ofwhichoverlap.Petitions,p.6;MartinSprocketandGearWebsite, http://www.martinsprocket.com/products/conveyorͲpulleys(accessedNovember10,2015);conference transcript,p.79(McCartney);hearingtranscript,p.55(Christenson);BaldorMaska,“HVACProduct Catalog”December2013;BaldorWebsite,http://www.baldor.com/brands/baldorͲ maska/products/mechanicalͲdriveͲcomponents/sheaves/stepͲpulleys(accessedNovember28,2015); andTBW,“PremiumBeltDriveSystemforToughApplications,”August2014,p.2. 66MartinSprocketandGearWebsite,http://www.martinsprocket.com/products/conveyorͲpulleys (accessedNovember10,2015);andBaldorWebsite,http://www.baldor.com/brands/baldorͲ dodge/products/conveyorͲcomponents/pulleys/drumͲpulleys(accessedNovember10,2015). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 98 of 218
IͲ29 Figure I-11 IMTDCs: Material handling applications Source: TBW, “Premium V-Belt Drives,” November 2015, p. TOC-1. Figure I-12 IMTDCs: Bottling applications Source: TBW, “Synchronous Drives,” November 2015, p. cover; TBW, “V-Belt Drives,” April 2015, p. cover. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 99 of 218
IͲ30 Theoilindustryisasignificantuseroflargesheavesinupstreamapplicationssuchas drilling. 67Intheagriculturalsector,sheavesandbeltdrivesareusedinequipmentrangingfrom combinesandharvesterstoconveyorbelts. 68InHVACapplicationsIMTDCsareoftenusedto transmitpowerfromamotortoafan(figureIͲ13). 69
Figure I-13 IMTDCs: Synchronous drive in an HVAC application Source: TBW, “TB Wood's QT Power Chain II Belt Drive System For HVAC Exhaust Fan,” April 8, 2013, http://www.tbwoods.com/newsroom/2013/04/QT-Power-Chain-II-for-HVAC-Exhaust-Fan.
67Conferencetranscript,p.79–80(McCartneyandMoore)andp.93(Coder);andpetitioner’s postconferencebrief,exh.1,p.55. 68AltraIndustrialMotion,“PowerTransmissionSolutionsfortheFarmandAgricultureMarket,”p.7, http://www.altraliterature.com/pdfs/PͲ7362ͲC.pdf(accessedNovember11,2015);hearingtranscript,p. 55(Christenson). 69Thoughbeltdriveshavetraditionallybeenusedinlargefans,directdrivefansetͲups—inwhichthe motorconnectsdirectlytothefanandvariablefrequencydrives(VFDs)areusedtocontrolthespeedof themotor—areincreasinglyusedinthisapplication.TraneEngineersNewsletter,“DirectDrivePlenum FansandFanArrays,”vol.31,no.1(2010), https://www.trane.com/content/dam/Trane/Commercial/global/productsͲsystems/educationͲ training/engineersͲnewsletters/acoustics/admapn036en 0310.pdf;Conferencetranscript,p.79 (McCartney);andBaldorMaskaProductCatalog,February2014,p.58. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 100 of 218
IͲ31 Flywheelsarecommonlyusedinapplicationswhereenergyisvariable,suchaswitha reciprocating(piston)engine.70Theoilindustryisoneexampleofwhereflywheelsareused. Theflywheelisusedwithapumpjack,forexample,andiscounterbalancedontheotherendof theshaftfromthesheave.71Anotherapplicationisinflywheelsheavesusedinelevators.72
Manufacturingprocesses TransformationprocessforIMTDCs ThesubjectIMTDCsaremanufacturedinfivesteps:(1)design,(2)ironmelting,(3)mold making,(4)casting,and(5)finishing(alsoknownasmachining). 73Melting,moldmaking,and castingnormallytakeplaceatafoundry,andtheseproductionstepscombinedarecollectively referredtoas“casting.”Designandfinishingmaybeperformedatthefoundry,butthesesteps mayalsotakeplaceataseparateplant.Themanufacturingprocessesandtechnologiesusedby foreignproducersarelargelysimilartothoseofdomesticproducers.74
Design Sheavesandbushingsaredesignedbyengineersusingcomputersimulationsofmetal flowandsolidification. 75Whilecustomersusuallychoosefromanextensivecatalogofsheaves andcorrespondingbushings,someapplicationsrequirecustomizedsheavesthatmeetspecific size,strength,speedorotherrequirements.76Customersmayprovidethedesignsthemselves, ordesignengineersatthefoundrymayprovidedesignconsultationandservices.77
70Asnotedabove,certainflywheelsareexcludedfromthescopeoftheinvestigations. 71Conferencetranscript,pp.57Ͳ58(McCartney). 72TBW,“TBWood's&NuttallGearTeamuptoprovideCustomSheavesandShaftAssembliesfor OneWorldTradeCenterExpressElevators,”January14,2014, http://www.tbwoods.com/newsroom/2014/01/OneͲWorldͲTradeͲCenterͲElevators. 73Hearingtranscript,p.13Ͳ17(Juergens);andU.S.InternationalTradeCommission,“Foundry Products:CompetitiveConditionsintheU.S.Market,”InvestigationNo.332Ͳ460,May2005,pp.2Ͳ7to 2Ͳ8. 74Conferencetranscript,p.150(Crist). 75USITC,“FoundryProducts,”p.2Ͳ7. 76***. 77USITC,“FoundryProducts,”p.2Ͳ7. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 101 of 218
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IͲ38 DOMESTICLIKEPRODUCTISSUES Summaryoffindingsfrompreliminaryphase Inthepreliminaryphaseoftheinvestigations,thepartiesdiscussedthreedomesticlike productissues:(1)whethertoincludeunfinishedandfinishedIMTDCsinthesamedomestic likeproduct;(2)whethertoincludeIMTDCsunder4inchesinmaximumnominaloutside diameter(herein“smallͲdiameter”IMTDCs)inthesamedomesticlikeproductdefinitionasthe “largeͲdiameter”IMTDCsthatcorrespondtothescopeoftheseinvestigations(thosewhose maximumnominaloutsidediameterisatleast4inches);and(3)whethertoincludemechanical transferdrivecomponents(“MTDCs”)thataremanufacturedfromsinteredsteelpowderor directͲmachinedsteelbars(collectively“steelMTDCs”)inthesamedomesticlikeproduct definitionastheironMTDCscorrespondingtothescopeoftheseinvestigations.Forthe reasonsdiscussedbelow,theCommissiondefinedthedomesticlikeproductinthepreliminary determinationsasallformsofunfinishedandfinishedIMTDCsdescribedinthescopeofthese investigations,aswellassmallͲdiameterIMTDCsunder4inchesinmaximumnominaloutside diameter.TheCommissiondidnotincludesteelMTDCsthataremanufacturedfromsintered steelpowderordirectͲmachinedsteelbarsinthedomesticlikeproductdefinition. 94
UnfinishedandfinishedIMTDCs Thescopeoftheimportedmerchandisesubjecttotheseinvestigationsincludes unfinishedandfinishedIMTDCs.Basedonananalysisofthesemifinishedproductfactors,the CommissiondefinedunfinishedandfinishedIMTDCsaspartofthesamedomesticlikeproduct initspreliminaryphasedeterminations.Specifically,theCommissionfoundthatunfinishedand finishedIMTDCshavesimilarphysicalcharacteristicsandthatunfinishedIMTDCsserveno functionotherthanbeingmachinedintofinishedIMTDCs.Thatis,unfinishedIMTDCsare dedicatedtotheproductionoffinishedIMTDCs,andfinishingoperationsareanecessarystep foranunfinishedIMTDCtobeusable.TheCommissionnotedinitspreliminarydeterminations thattheextentofanyseparatemarketsforunfinishedandfinishedIMTDCswasdisputedby thepartiesandwasunclearfromtherecord.Therecordatthetimeofthepreliminaryphase investigationssuggestedthepossibleexistenceofseveralfirmsthatonlycastunfinished IMTDCsandatleastonefirmthatonlyfinishedIMTDCs,buttherecordalsoindicatedthatat leasttwoU.S.firmsmanufacturedbothunfinishedandfinishedIMTDCs.TheCommission furthernotedthatalthoughthevalueaddedbyfinishingoperationswasdisputedbytheparties inthepreliminaryphaseoftheinvestigations,thevalueoffinishingoperationswasnot insignificant. 95
94CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550 and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,pp.10and19. 95CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550 and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.13. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 108 of 218
IͲ39 SmallͲdiameterIMTDCs Basedonananalysisofthetraditionaldomesticlikeproductfactors,theCommission concludedinitspreliminarydeterminationsthatsmallͲdiameterIMTDCsarepartofthesame domesticlikeproductdefinitionasthelargeͲdiameterIMTDCscorrespondingtothe investigations’scope.Inmakingitspreliminarydeterminations,theCommissionnotedthatthe preliminaryphaserecorddidnotsupportTBW’sassertionthataclearlinedividessmallͲ diameterIMTDCsfromthelargeͲdiameterIMTDCsthatcorrespondtothescopeofthese investigations.Therecordinthepreliminaryphaseinvestigationsalsoshowedthatcertainfirms producesmallͲandlargeͲdiameterIMTDCsusingsomecommonfacilities,processes,and employees.TheCommissionnotedinitspreliminarydeterminationsthatsmallͲandlargeͲ diameterIMTDCshavesimilarphysicalcharacteristics,someoverlapintheirenduses,andare soldthroughsimilarchannelsofdistribution.Inaddition,theCommissionnotedthattherecord inthepreliminaryphaseoftheinvestigationssuggestedthatproducersandcustomersdonot differentiateamongIMTDCsbasedonafourͲinchdiameterdividingline,asshownbyavailable productcataloguesandindustrystandards.Furthermore,althoughtheCommissionrecognized thatitisnotunexpectedthatpricesdifferforsmallͲandlargeͲdiameterIMTDCsorthatsmallͲ andlargeͲdiameterIMTDCsarenotinterchangeable,itnotedthatthesamecanbesaidof IMTDCsofdifferentsizesregardlessofthediameterusedasthedividingline.96
SteelMTDCs Initspreliminarydeterminations,theCommissiondeterminednottoincludeMTDCs manufacturedfromsinteredsteelpowderordirectͲmachinedsteelbarsinthedomesticlike productdefinitionwithironMTDCs,notwithstandingsomesimilaritiesbetweenthetwotypes ofproducts.Inmakingitsdeterminations,theCommissionnotedthatalthoughcustomersand industryassociationsmaynotdifferentiatebetweenMTDCsmadefromironandsteelandall suchproductsappearedtosharechannelsofdistribution,someevidencesuggestedthatthey havedifferentphysicalqualitiesduetotheirdifferentchemicalproperties.TheCommission furtherdeterminedthatnotonlyareironMTDCspriceddifferentlythansteelMTDCs,butthat thosefirmsthatmanufactureMTDCsfromironandoneormoreofthesteelrawmaterials(i.e.,
96TheCommissionnotedthattherecordinthepreliminaryphaseoftheinvestigationsthatincluded thesmallͲdiameterIMTDCoperationsofandthefinishingoperationsconductedbysuggested thatproductionvolumesofsmallͲdiameterIMTDCsintheUnitedStateswererelativelysmallandthat smallͲdiameterMTDCswereoftenmanufacturedfromsinteredsteelpowderordirectͲmachinedsteel barsinsteadofiron,butitobservedthattherecordatthattimewasunclearastowhethertherewere additionalfirmsthatmightalsocastand/orfinishsmallͲdiameterIMTDCsusingthesameorsimilar productionequipment,processes,andequipment.CertainIronMechanicalTransferDriveComponents fromCanadaandChina,Inv.Nos.701ͲTAͲ550and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication 4587,December2015,pp.15Ͳ16;andConfidentialPreliminaryViews,EDISDoc.571242,pp.22Ͳ23.
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IͲ40 sinteredsteelpowderordirectͲmachinedsteelbar)dosousingdifferentrawmaterials, productionfacilities,processes,andemployees.97
Partyarguments Preliminaryphase Theargumentsofpartiesaresummarizedbrieflybelow.Whereaspartiesdisagreed aboutthetreatmentofsmallͲdiameterIMTDCsandnonͲironMTDCsinthepreliminaryphaseof theinvestigations,nopartyarguedthatunfinishedandfinishedIMTDCsareseparatedomestic likeproducts. 98 Inthepreliminaryphaseoftheinvestigations,thepetitionerproposedthatIMTDCs constitutedasingledomesticlikeproduct,coextensivewiththescopeoftheseinvestigationsas initiatedbyCommerce.Specifically,thepetitionernotedthattheCommissionshouldnot includeinthedomesticlikeproductIMTDCsthatarelessthanfourinchesindiameteror MTDCsthatarenotmadeofiron(suchassinteredsteelpowderMTDCsandMTDCsmadefrom directmachinedsteelbars).99
97CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550 and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.19. 98Baldor’spostconferencebrief,exh.1;ChineseRespondents’postconferencebrief,pp.11Ͳ13; Petitioner’spostconferencebrief,p.5;Petitions,vol.I,pp.20Ͳ21;andconferencetranscript,pp.32,58Ͳ 59,and110. 99Petitioner’spostconferencebrief,p.5.ThepetitioneramendeditsoriginalOctober28,2015 petitionsonNovember5,2015toproposerevisionstothescopelanguage.Aspartofthoserevisions, thepetitionerproposedexcludingitemsoflessthan4.00inches(101mm)inmaximumnominalouter diameterfromthescope.Thepetitionerarguedthattheadditionofadiameterlimittodefinethe IMTDCscoveredbythescopeimprovesthescope’sclarityandabilitytodistinguishbetweenironand steelproductssinceitarguesthatsomesmallͲdiameter(i.e.,below4.0inches)importedcomponents maybeproducedfromeithersteeloriron(ortheirproductionprocessesmaybechangedrelatively easilytoutilizesteel),whilelargeͲdiametercomponentsarepredominantlyproducedfromiron. ResponsetotheDepartment’sNovember3,2015SupplementalQuestionsRegardingVolumeIofthe PetitionfortheImpositionofAntidumpingandCountervailingDuties,November5,2015,pp.4Ͳ5.The petitioneragainamendeditspetitionsduringtheCommission’spreliminaryphaseinvestigationson November17,2015toproposefurthermodificationstothescopelanguagebyadjustingthecarbon contentthresholdfrom1.5to1.7percentbyweightoraboveforitemsincludedinthescope.Additional RevisiontotheScope,November17,2015,p.1.Aspreviouslynoted,furtheramendmentsand clarificationstothescopelanguagewereproposedbythepetitionersubsequenttoCommerce’s preliminarydeterminationsonJune27,2016,August4,2016,andAugust17,2016,andAugust22, 2016,concerningtheexclusionofcertaintorsionalvibrationdamperinnerringsandcertainflywheels withringgear. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 110 of 218
IͲ41 RespondentBaldorandChineserespondentsPowermachandMinYuearguedinthe preliminaryphaseoftheinvestigationsthatallIMTDCsshouldbeconsideredtobewithinthe samedomesticlikeproductregardlessofdiameter,andthatMTDCsmadefromsinteredsteel ormachinedsteelbarshouldalsobeincludedinthesamedomesticlikeproductasMTDCs madefromiron. 100Additionally,basedonitsproposedexpandeddomesticlikeproduct,Baldor arguedthatthedomesticindustryshouldincludethosefirmsthatproduceitemsusinga sinteringand/ordirectmachiningprocess,regardlessofthecarboncontent,andthosethat produceitemsbelow4inchesindiameter.101 Inthepreliminaryphaseoftheinvestigations,respondentCaterpillararguedthatthe petitioner’ssuggestionthattheCommission’sdomesticlikeproductmustnecessarilybe coterminouswithCommerce’sscopewasincorrect,butotherwisemadenospecificarguments astodomesticlikeproductanddomesticindustry.Itsimplynotedthatthedefinitionsremain “wideopenquestions”andarguedthatthepetitioner’schangeinthescopelanguageverylate duringthepreliminaryphaseoftheCommission’sinvestigationshinderedtheCommission’s abilitytogathertheappropriateindustryinformation. 102
Finalphase Initspreliminaryphasedeterminations,theCommissionremindedpartiestoidentifyin theircommentsonthedraftquestionnairesforthefinalphaseoftheseinvestigationsany argumentsthatwouldimplicatedatacollection,suchasrequeststodefinethedomesticlike productinadifferentmanner.103Onlyoneparty,TBW,providedcommentsonthedraft questionnairesinthefinalphaseoftheseinvestigations,noneofwhichinvolvedachangeinthe mannerinwhichtheproposeddatawerecollectedinthesefinalphaseinvestigationsthat wouldsuggestadifferentdomesticlikeproductdefinition. 104
100Baldor’spostconferencebrief,p.5;andChineserespondents’postconferencebrief,p.7. 101Baldor’spostconferencebrief,p.27. 102Caterpillar’spostconferencebrief,pp.4Ͳ7. 103CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550 and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.19. 104TBW’sCommentsonDraftQuestionnaires,June24,2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 111 of 218
IͲ42 Initsprehearingbriefinthefinalphaseoftheinvestigations,TBWarguedthatthe CommissionshouldfindthatIMTDCsconstituteasingledomesticlikeproduct,coextensivewith thescopeoftheseinvestigations.Specifically,unfinishedandfinishedIMTDCsshouldbe treatedaspartofasingledomesticlikeproductandmechanicaltransferdrivecomponentsnot madeofironshouldbeexcludedfromthedomesticlikeproductdefinition.Further,TBW arguesthattheCommissionshouldalsonotincludeIMTDCsthatarelessthanfourinchesin diameterinthedomesticlikeproduct.105 TheChinaChamberofInternationalCommerce’sadhocCoalitionofProducersand ExportersofCertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicof China,106PowermachImport&ExportCo.,Ltd.,(Sichuan);ShijiazhuangCAPTPower TransmissionCo.,Ltd.;andYueqingBethelShaftCollarManufacturing.Co.,Ltd.providedbriefs inthefinalphaseoftheseinvestigationsbutdidnotmakeanyargumentsconcerningthe definitionofthedomesticlikeproduct.
105TBW’sprehearingbrief,pp.2Ͳ3. 106ThemembersoftheCoalitionarePowermachImport&ExportCo.,Ltd.(Sichuan),Shijiazhuang CAPTPowerTransmissionCo.,Ltd.andYueqingBethelShaftCollarManufacturingCo.,Ltd. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 112 of 218
IIͲ1 PARTII: CONDITIONSOFCOMPETITIONINTHEU.S.MARKET U.S.MARKETCHARACTERISTICS IMTDCsareusedintheHVAC,mining,upstreamoilandgas,buildingandroad construction,andgeneralindustrialandagriculturalsectors.1Theycanvarysubstantiallyinsize andareincorporatedintoawiderangeofmachineryandequipment,suchasfans,conveyors, pumps,compressors,andmixers.SmallͲdiameterIMTDCsgenerallyareusedwithsmall machineryandlargeͲdiameterIMTDCsareusedinlargeͲscalemachinerysuchasthatusedin miningandoilandgasrigs. 2IMTDCsareproducedintwoprimaryphases:castingandfinishing. IMTDCsmaybecastbyonefirm,andfinishedbyanother.3 Overall,apparentU.S.consumptionofIMTDCsin2015was***percentlowerthanin 2013onavaluebasisand***percenthigheronaunit(piece)basis.U.S.PURCHASERS TheCommissionreceived24usablequestionnaireresponsesfromfirmsthathave purchasedIMTDCssinceJanuary2013. 4Sixteenrespondingpurchasersaredistributorsand eightareendusers.MostoftherespondingU.S.purchasersarelocatedintheMidwestand CentralSouthwest.Therespondingendusersrepresentfirmsproducingavarietyofproducts includingHVAC,refrigeration,conveyorequipment,vibratingscreens,andagricultural equipment.TherespondingdistributorsselltoawidevarietyofOEMsandotherindustrial customersincludingmaterialhandlingequipmentmanufacturers,HVAC,agricultural,general manufacturing,mining,petrochemicals,foodprocessing,automotive,andoilandgas.The largestrespondingpurchaserswere***. 1Conferencetranscript,pp.92Ͳ93(Coder). 2Hearingtranscript,p.17(Juergens). 3AsnotedinPartI,thisreportpresentsseparatelycertaindatasubmittedbyonefoundry(Waupaca) regardingitsU.S.castingoperationsbecauseofconcernsovertheinclusionofsubstantialamountsof excludedmerchandise.AlthoughWaupaca’sdataarepresentedseparatelyinappendixC,***. 4Eighteenofthe24respondingpurchasersreporteddatafortheirpurchasesoflargeͲdiameter IMTDCs,including14fordomesticallyͲproducedproduct,9forsubjectimportsfromCanada,9for subjectimportsfromChina,8forproductfromMexico,2forproductfromothercountries,and9for productofunknownorigin.SixteenpurchasersreporteddatafortheirpurchasesofsmallͲdiameter IMTDCs,including9fordomesticproduct,7forimportedproduct,and8forunknownoriginproduct.A numberofpurchaserswerenotabletoprovideanydatafortheirpurchasesofIMTDCs,orwerenotable toreportbysizeorbycountryoforigin. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 113 of 218
IIͲ2 CHANNELSOFDISTRIBUTION U.S.producersandimporterssoldfinishedIMTDCstobothdistributorsandendusers (tableIIͲ1).TBWstatedthatitsindustrialdistributionchannelservessmallerOEMsandthe replacementpartsbusinessandthatitsellsIMTDCsdirectlytolargerOEMs. 5Table II-1 IMTDCs: U.S. producers’ and importers’ U.S. commercial shipments, by sources and channels of distribution, 2013-15, January-June 2015, and January-June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Share of commercial U.S. shipment value (percent) U.S. producers (finished only).-- Distributors *** *** *** *** *** End users *** *** *** *** *** U.S. importers: subject Canada.-- Distributors *** *** *** *** *** End users *** *** *** *** *** U.S. importers: subject China.-- Distributor 61.9 60.5 60.7 61.6 69.8 End users 38.1 39.5 39.3 38.4 30.2 U.S. importers: Nonsubject sources 1 .-- Distributors 76.8 76.5 78.2 77.0 74.3 End users 23.2 23.5 21.8 23.0 25.7 1 Nonsubject sources includes imports of large-diameter IMTDCs from countries other than Canada and China and imports of small-diameter IMTDCs from all sources. Note.--U.S. producers' data excludes unfinished IMTDCs. Channels of distribution data were not gathered for imports by level of finishing, however the vast majority of imports were of finished IMTDCs. Source: Compiled from data submitted in response to Commission questionnaires. 5Hearingtranscript,p.90(Christenson). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 114 of 218
IIͲ3 GEOGRAPHICDISTRIBUTION U.S.producersandsubjectimportersreportedsellingIMTDCstoallregionsinthe UnitedStates(tableIIͲ2).ForU.S.producers,13percentofsaleswerewithin100milesoftheir productionfacility,68percentwerebetween101and1,000miles,and20percentwereover 1,000miles.Subjectimporterssold5percentwithin100milesoftheirU.S.pointofshipment, 62percentbetween101and1,000miles,and32percentover1,000miles. Table II-2 IMTDCs: Geographic market areas in the United States served by U.S. producers and importers Region U.S. producers Subject U.S. importers Canada China Northeast 9 5 16 Midwest 11 6 18 Southeast 10 6 17 Central Southwest 9 6 18 Mountains 8 6 15 Pacific Coast 8 6 15 Other 1 3 3 8 All regions (except Other) 7 5 14 Reporting firms 11 6 19 1 All other U.S. markets, including AK, HI, PR, and VI. Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 115 of 218
IIͲ4 SUPPLYANDDEMANDCONSIDERATIONS U.S.supply Domesticproduction Basedonavailableinformation,U.S.producersofIMTDCshavetheabilitytorespondto changesindemandwithlargechangesinthequantityofshipmentsofU.S.ͲproducedIMTDCsto theU.S.market.Themaincontributingfactorstothisdegreeofresponsivenessofsupplyare theavailabilityofunusedcapacity,availabilityofinventories,andtheabilitytoproduce alternateproducts.Industrycapacity DomesticcapacityutilizationforIMTDCsonacombinedbasisdecreasedirregularlyfrom percentin2013topercentin2015.Capacityofthedomesticindustryincreasedslightly frompiecesin2013topiecesin2015.Therelativelylowlevelofcapacityutilization suggeststhatU.S.producersmayhaveasubstantialabilitytoincreaseproductionofIMTDCsin responsetoanincreaseinprices.
Alternativemarkets U.S.producers’exportscomprisedasmallshareofthevalueoftotalshipmentsof finishedIMTDCs(percent)in2013Ͳ15,butalargershareofunfinishedIMTDCs( percent).U.S.producersindicatedthattheirprincipalexportmarketswereCanadaandMexico.
Inventorylevels U.S.producers’inventoriesoffinishedIMTDCsincreasedandwereequivalentto*** percentoftotalshipmentsin2013and***percentin2015.Whilethereissubstantialvariation amongdifferentsizesandsomeIMTDCsmaybecustomproducts,thevastmajorityofIMTDCs arestandardcatalogproducts. 6Therelativelyhighinventorylevelsandlargeproportionof standarditemssuggestthatU.S.producersmayhaveasubstantialabilitytorespondtochanges indemandwithchangesinthequantityshippedfrominventories.
Productionalternatives Sevenof11respondingU.S.producersstatedthattheycouldswitchproductionfrom IMTDCstootherproducts.Otherproductsthatproducersreportedlycanproduceonthesame 6Conferencetranscript,p.69(Beck);andNotesfromStafffieldworkatTBW’smanufacturingfacility, November12,2015. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 116 of 218
IIͲ5 equipmentasIMTDCsarecouplingsandcastingsfornonͲIMTDCproducts,adapters,covers, spacers,rotors,calipers,housings,andothermachineshopproducts.U.S.producersreported thatproductionofotherproductsbesidesIMTDCsaccountedforabout***ofproduction(in pieces)usingthesamefinishingequipmentandabout***ofproduction(inpieces)usingthe samecastingequipmentin2015.AccordingtothePetitioner,aftertheinitialinvestmentina foundryandthenecessaryequipment,itisveryeasyforfirmstoswitchproductionfromother productstoIMTDCs. 7SubjectimportsfromCanada ThesolerespondingproducerinCanada,BaldorCanada,shutdownitsIMTDCfinishing operationsonMay26,2016andrelocateditsIMTDCfinishingequipmenttoNorthCarolina. BaldorCanadadidnothavecastingoperations.***.
SubjectimportsfromChina8 Basedonavailableinformation,ChineseproducersoflargeͲdiameterIMTDCshavethe abilitytorespondtochangesindemandwithlargechangesinthequantityofshipmentsof largeͲdiameterIMTDCstotheU.S.market.Themaincontributingfactorstothisdegreeof responsivenessofsupplyaretheavailabilityofunusedcapacity,abilitytoshipamongalternate markets,availableinventories,andtheabilitytoproducealternateproducts.
Industrycapacity Chineseproducers’capacityutilizationforlargeͲdiameterIMTDCs(basedonpieces) increasedfrompercentin2013topercentin2014andthendeclinedsomewhatto*** percentin2015.ThismoderatelevelofcapacityutilizationsuggeststhatChineseproducers mayhaveanabilitytoincreaseproductionofIMTDCsinresponsetoanincreaseinprices.
Alternativemarkets Chineseproducers’reportedshipmentstothirdͲcountrymarketsincreasedmarkedly overtheperiod,risingfrompercentoftotalshipmentsin2013topercentin2015,as shipmentstotheUnitedStatesandtheChinesehomemarketdeclined.Theshareofshipments totheChinesehomemarketdeclinedfrompercentin2013andpercentin2014to*** percentin2015.ExportshipmentstotheUnitedStateswereabout***percentoftotal 7Conferencetranscript,p.145(Crist). 8FordataonthenumberofrespondingforeignfirmsandtheirshareofU.S.importsfromChina, pleaserefertoPartI,“SummaryDataandDataSources.”DatainthissectionareforlargeͲdiameter IMTDCs. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 117 of 218
IIͲ6 shipmentsin2013and2014,decliningto***percentin2015.Othermarketsidentifiedby ChineseproducerswereEurope,Canada,Australia,Asia,Africa,andtheMiddleEast.Inventorylevels Chineseproducers’inventoriesrelativetototalshipmentsdecreasedirregularlyfrom percentin2013topercentin2015.Therelativelyhighinventorylevelssuggestthat Chineseproducersmaybeabletorespondtochangesindemandwithchangesinthequantity shippedfrominventories.
Productionalternatives ChineseproducersmanufactureoutͲofͲscopeIMTDCsaswellasotherproductsonthe samemachineryusedforcastingandfinishingsubjectIMTDCs.In2015,outͲofͲscopeIMTDCs andotherproductsaccountedformorethanofproduction(inpieces)onmachineryused forcastingIMTDCsandofproduction(inpieces)onmachineryusedforfinishingIMTDCs. FiveChineseproducersreportedthattheyarenotabletoshiftproductionbetween IMTDCsandotherproductsusingthesameequipment,whiletwoChineseproducersreported thattheyareabletoshiftproduction.Chineseproducersalsoreportedbeingabletoproduce compressorparts,pumpparts,bearings,androllers.
Nonsubjectimports ThelargestsourceofnonsubjectimportsofIMTDCsduringJanuary2013ͲJune2016was Mexico,whichaccountedforpercentofreportednonsubjectimportsoflargeͲandsmallͲ diameterIMTDCs(inpieces)in2015, 9andpercentofnonsubjectimportsoflargeͲdiameter IMTDCs(inpieces).
Supplyconstraints Nearlyallpurchasers(23of24)reportednosupplyconstraintsforIMTDCsfromany source.However,purchaser***statedthatsince2012,itsCanadiansupplierhas“shorted” shipmentsbecauseoflackofavailabilityofcastings,andbecausethesupplierclosedin2015.
Newsuppliers Most(22of24)purchasersindicatedthatnonewsuppliershaveenteredtheU.S. marketsinceJanuary1,2013.TwopurchasersindicatedthatMasterDrive(animporter)and Powermach(aChineseproducer)havedoneso.
9NonsubjectimportsincludeimportsofsmallͲdiameterIMTDCsfromCanadaandChina. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 118 of 218
IIͲ7 U.S.demand Basedonavailableinformation,theoveralldemandforIMTDCsislikelytoexperience smallchangesinresponsetochangesinprice.Themaincontributingfactorsarethelackof substituteproductsandthesmallcostshareofIMTDCsinmostofitsendͲuseproducts.Enduses U.S.demandforIMTDCsdependsonthedemandforU.S.Ͳproduceddownstream products.Reportedendusesincludepumpjacks,crushersandmixers,conveyorsystems,OEM equipment,fansandblowers,HVACapplications(e.g.,exhaustventilationfans),heat exchangers,oilandgasapplications,andagriculturalapplications(e.g.,combines). Attheconference,TBWstatedthatIMTDCsareusedinawidevarietyofdownstream applications,includingfans,conveyors,pumps,compressors,rockcrushers,andmixers.10TBW statedthattheoverallU.S.belteddrivesmarketwasdividedamongthefollowingsectors: generalindustrial(***percent),airhandling(percent),pumpandcompressor( percent),oilandgas(***percent),materialshandling(***percent),constructionand agriculture(***percent),andsandandgravel(***percent).11
Costshare IMTDCsaccountforasmallshareofthecostofthedownstreamendͲuseproductsin whichtheyareused,butcanbealargershareofreplacementcomponents.Purchasers’ reportedcostsharesforsomeenduseswereasfollows:camshafts,combines,vibrating screens,conveyors,tractors,linesorters(1percent);compressors(5percent);andpumps(10 percent).
Businesscycles Mostfirms(10of11U.S.producers,20of23importers,and18of24purchasers) indicatedthattheIMTDCmarketwasnotsubjecttobusinesscycles.Afewfirmsreportedthat certainsectorsthatuseIMTDCs,includingagricultureandoilandgas,arecyclicalorseasonal. PetitionerstatedthatIMTDCdemandisderivedfromavarietyofendͲusesectorsand generallytracksoveralleconomicconditionsmorecloselythananyparticularmarketsegment (seefigureIIͲ1).Itaddedthatdemandisdrivenbygeneralindustrialandconstructiondemand, includingbuildingandroadconstruction,demandinthefoodandbeveragesectors,and demandintheoilandgassectors.12
10Conferencetranscript,pp.92Ͳ93(Coder),120(Christenson). 11Petitioner’spostconferencebrief,exh.1,p.55. 12Petitioner’spostconferencebrief,pp.9Ͳ10.Petitioner’sprehearingbrief,p.13. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 119 of 218
IIͲ8 Figure II-1 GDP: Percent change from preceding period in real GDP in the United States, seasonally adjusted at annual rates, in percent, January 2013-September 2016 Source: BEA, Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product. http://www.bea.gov/iTable/index_nipa.cfm, October 28, 2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 120 of 218
IIͲ9 Demandtrends Respondingfirmsreportedavarietyofresponseswithrespecttochangesindemandin theUnitedStatesforIMTDCssinceJanuary1,2013,thoughfewindicatedanincreasein demand(tableIIͲ3).PetitionerandChineserespondentsstatedthatU.S.demandforIMTDCs hasdecreasedsince2013. 13 Table II-3 IMTDCs: Firms’ responses regarding U.S. demand and demand outside the United States Item Number of firms reporting Increase No change Decrease Fluctuate Demand inside the United States: U.S. producers 1 1 5 4 Importers 0 4 6 8 Purchasers 1 8 6 7 Demand outside the United States: U.S. producers 2 1 2 2 Importers 2 4 3 5 Purchasers 1 5 3 2 Demand for purchasers' final products: Purchasers 2 3 4 2 Source: Compiled from data submitted in response to Commission questionnaires. Threepurchasersreportedreduceddemandintheenergysector,specificallyIMTDCs forOEMmachinesandsparepartsusedinthecoal,oil,andgasindustries.***reported reduceddemandbecauseofadownturnincertainsectorsoftheeconomy,aswellasmachines thatuseIMTDCsbeingproducedinothercountries.Ontheotherhand,purchaser***reported increaseddemandforHVACapplications(becauseofnewhomeconstructionandinolder homesforrepairsandreplacements),andpurchaser***reportedgrowingdemandforIMTDCs inmaterialhandlingconveyors.Substituteproducts SubstitutesforIMTDCsarelimited.MostU.S.producers(4of6),importers(17of21), andpurchasers(20of23)reportedthattherewerenosubstitutesforIMTDCs.Twoofthethree purchasersthatreportedsubstitutesstatedthatthesubstitutesweremoreexpensiveIMTDCs butmoreefficient.SubstituteslistedbypurchaserswerevariablefrequencydrivesfortheHVAC industry,directdrivesforoilfieldpumpingequipment,integralgearmotorsforspeedreduction applications,andrightanglegeardrivesforheattransferproducts.Nofirmreportedthat changesinthepricesofsubstituteshadaffectedpricesofIMTDCs. 13Petitioner’sprehearingbrief,pp.11Ͳ13.Respondent’sprehearingbrief,pp.19Ͳ21. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 121 of 218
IIͲ10 SUBSTITUTABILITYISSUES ThedegreeofsubstitutionbetweendomesticandimportedIMTDCsdependsuponsuch factorsasrelativeprices,quality(e.g.,appearance,durability,meetingtolerances,packaging, andperformance),andconditionsofsale(e.g.,pricediscounts/rebates,leadtimesbetween orderanddeliverydates,paymentterms,productservices,etc.).Basedonavailabledata,staff believesthatthereisahighdegreeofsubstitutabilitybetweendomesticallyproducedIMTDCs andIMTDCsimportedfromsubjectsources.Leadtimes IMTDCsaresoldbothproducedͲtoͲorderandfrominventory.MostrespondingU.S. producersreportedthatthemajorityoftheirsaleswereproducedͲtoͲorder,althoughtwo producersreportedthatlessthanhalfoftheirsaleswereproducedͲtoͲorder(***).U.S. producers’reportedproducedͲtoͲorderleadtimesaveraged52days.MostU.S.producers’ reportedleadtimesfrominventorywere1to5days.Mostimportersreportedthatthe majorityoftheirsaleswerefromU.S.inventories,withmostreportingleadtimesfromU.S inventoriesof1to7days.
Knowledgeofcountrysources TwentyͲoneof24purchasersindicatedthattheyhadmarketing/pricingknowledgeof domesticproduct,8ofCanadianproduct,9ofChineseproduct,9ofMexicanproduct,and3of productfromothercountries(GermanyandIndia). AsshownintableIIͲ4,mostpurchasersandtheircustomerssometimesornevermake purchasingdecisionsbasedontheproducerorcountryoforigin.Ofthethreepurchasersthat reportedthattheyalwaysmakedecisionsbasedonthemanufacturer,statedthatitonly purchasesfromfirmsonitsapprovedsupplierlist, 14statedthatitselectssuppliersbased onqualityandvalue,and***didnotgiveareason.***answered“usually,”explainingthatit stocksU.S.ͲproducedIMTDCsforcustomersthatstateapreferencefordomesticproduct,anda morecostͲeffectivesolutionforothercustomers.
Table II-4 IMTDCs: Purchasing decisions based on producer and country of origin Purchaser/customer decision Always Usually Sometimes Never Purchaser makes decision based on producer 3 6 6 10 Purchaser’s customers make decision based on producer 0 3 10 8 Purchaser makes decision based on country 0 3 9 11 Purchaser’s customers make decision based on country 0 2 13 8 Source: Compiled from data submitted in response to Commission questionnaires. 14***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 122 of 218
IIͲ11 Factorsaffectingpurchasingdecisions Themostoftencitedtopthreefactorsfirmsconsiderintheirpurchasingdecisionsfor IMTDCswereprice(19firms),quality(19firms),andavailability(16firms)asshownintableIIͲ 5.QualitywasthemostfrequentlycitedfirstͲmostimportantfactor(citedby7firms),followed byprice(5firms);pricewasthemostfrequentlyreportedsecondͲmostimportantfactor(7 firms);andprice,wasthemostfrequentlyreportedthirdͲmostimportantfactor(7firms).Table II-5 IMTDCs: Ranking of factors used in purchasing decisions as reported by U.S. purchasers, by factor Factor First Second Third Total Price 5 7 7 19 Quality 7 6 6 19 Availability 4 6 6 16 Delivery/lead time 1 2 1 4 Product range 1 0 2 3 Traditional supplier 1 0 0 1 Other 1 5 2 1 8 1 Other factors include customer preference, distribution agreement, brand, and relationship with supplier. Source: Compiled from data submitted in response to Commission questionnaires. Purchasersreportedthatthecharacteristicstheyconsiderindeterminingquality included:appearance,castingquality,durability,dimensionalconsistency,labeling,meeting tolerances,packaging,andperformanceinapplications.Severaldistributorsnotedthatthey maynotdirectlyassessqualitybutinsteadrelyonbrandreputation,supplierhistory,and feedbackfromtheircustomers.statedthatitassessesqualitybasedonindustrystandards, andthatovertime,Chineseproducthasmetthosestandards“soitcomesdowntoprice.” Themajorityofpurchasers(14of24)reportedthatthey“sometimes”purchasethe lowestͲpricedproduct,while8indicated“usually,”2“always,”and1“never.” WhenaskediftheypurchasedlargeͲdiameterIMTDCsfromonesourcealthougha comparableproductwasavailableatalowerpricefromanothersource,13purchasers reportedreasonsincludingavailability,consistencyofsupply,customerpreference,delivery, andrelationshipwithvendor.Severalpurchasersreportedsometimespurchasingdomestic producteventhoughitwaspricedhigherbecauseofareputationforbetterquality,requests fordomesticproduct,reliabilityofdelivery,andpreferencesforuseincriticalapplications.Only 1of22respondingpurchasersindicatedthatcertaintypesofIMTDCswereonlyavailablefrom asinglesource.15 15statedthatlesspopularstylesandsizesareonlyavailabledomestically. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 123 of 218
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IIͲ13 Suppliercertification Mostpurchasers(19of24)donotrequiretheirsupplierstobecomecertifiedor qualifiedtosellIMTDCstotheirfirm.Thepurchasersthatdidreportaqualificationprocess reportedthatthetimetoqualifyanewsupplierrangedfrom30daystooneyear.Nopurchaser reportedthatasupplierhadfailedinitsattempttoqualifyproduct,orhadlostitsapproved statussince2013.Changesinpurchasingpatterns Purchaserswereaskedaboutchangesintheirpurchasingpatternsfromdifferent sourcessince2013(tableIIͲ7);reasonsreportedforchangesinsourcingincludedprice,quality, declineindemand,availability,brandsupport,focusonkeybrands,theclosureofBaldor Canada,andcustomerdemand.Sixof24respondingpurchasersreportedthattheyhad changedsupplierssinceJanuary1,2013.
Table II-7 IMTDCs: Changes in purchase patterns from U.S., subject, and nonsubject countries Source of purchases Did not purchase Decreased Increased Constant Fluctuated United States 0 8 4 7 4 Canada 7 4 2 4 2 China 5 2 6 3 2 Mexico 7 1 2 5 3 All other sources 8 2 1 4 1 Sources unknown 6 1 1 4 3 Source: Compiled from data submitted in response to Commission questionnaires. reportedthatasalargedistributorwithmanycustomers,itsmixofsuppliers changes,butthatmostofitspurchasesaresourcedtolongͲtermsuppliers.reportedthat withover25suppliersinthisproductcategory,itsbusinessmovesbackandforthbasedoncost andcustomerpreference.reporteddroppingforcustommanufacturedflywheelsin favorofbasedonbetterpricingandshorterdeliverytimes.16notedtheclosureofits Canadiansupplier.reporteddroppingand***assuppliers.
16***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 125 of 218
IIͲ14 Importanceofpurchasingdomesticproduct Nineof21respondingpurchasersreportednodomesticrequirementsforanyoftheir purchases.Fivepurchasersreportedthatdomesticproductwasrequiredbylaw(for1to7 percentoftheirpurchases).Elevenpurchasersreportedthatdomesticproductwasrequiredby theircustomers(for6ofthesepurchasers,1to14percentoftheirpurchases,for4purchasers, 50Ͳ55percent,andforonepurchaser,90percent).17Threepurchasersreportedother preferencesfordomesticproduct(for1to25percentofpurchases).Threepurchasers(***)did notanswerthequestion.Comparisonsofdomesticproducts,subjectimports,andnonsubjectimports PurchaserswereaskedanumberofquestionscomparingIMTDCsproducedinthe UnitedStates,subjectcountries,andnonsubjectcountries.Purchaserswereaskedfora countryͲbyͲcountrycomparisonoflargeͲdiameterIMTDCsonthesame15factors(tableIIͲ8)for whichtheywereaskedtoratetheimportance.MostpurchasersreportedthatU.S.and Canadianproductwerecomparableonallfactorsexceptprice(forwhich6ratedtheCanadian productaslowerpricedand5ratedthemascomparable)andreliabilityofsupply(forwhich5 of11firmsratedtheU.S.productassuperior).IncomparingU.S.andChineseproducts,a majorityorpluralityofpurchasersratedtheproductscomparableon7factors,theU.S.product assuperioron6factors(availability,deliverytime,productrange,qualityexceedsindustry standards,reliabilityofsupply,andtechnicalsupport/service),theChineseproductassuperior onprice(i.e.,lowerpriced).Onproductconsistency,anequalnumberoffirmsratedtheU.S. productassuperiorasratedtheproductsascomparable.IncomparingproductfromCanada andChina,amajorityofpurchasersratedthemascomparableon9factors,Canadaassuperior on5factors(deliveryterms,deliverytime,productconsistency,reliabilityofsupply,and technicalsupport/service),andChinaassuperioronprice. 17Thepurchasersreporting50Ͳ55percentweredistributors***,whichservecustomersinawide varietyofindustriesincludingoilandgas,agricultural,HVAC,generalmanufacturing,andmining,and enduser***.Distributor***reported90percent. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 126 of 218
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IIͲ18 Sixpurchasersprovidedadditionalexplanationsregardingdifferencesotherthanprice.18 ***statedthattheUnitedStatesandCanadaareperceivedassimilarwhileMexico,China,and Indiaareconsideredlowerquality.***reporteddifficultieswithavailabilityandtransportation forspecialtyproductsimportedfromChina.***statedthatasadistributor,transportation, quality,supplychainrisk,andleadtimesarechallengesinsourcingfromnonͲNAFTAcountries. ***indicatedthatU.S.productishigherqualitythanChineseproduct,andthatChinese productishigherqualitythanMexicanproduct.***indicatedthatavailabilitywasalwaysa significantfactorinitspurchasesofIMTDCs.ELASTICITYESTIMATES Thissectiondiscusseselasticityestimates;partiesdidnotcommentontheseestimates. U.S.supplyelasticity Thedomesticsupplyelasticity19forIMTDCsmeasuresthesensitivityofthequantity suppliedbyU.S.producerstochangesintheU.S.marketpriceofIMTDCs.Theelasticityof domesticsupplydependsonseveralfactorsincludingthelevelofexcesscapacity,theeasewith whichproducerscanaltercapacity,producers’abilitytoshifttoproductionofotherproducts, theexistenceofinventories,andtheavailabilityofalternatemarketsforU.S.Ͳproduced IMTDCs.AnalysisofthesefactorsearlierindicatesthattheU.S.industryhastheabilityto increaseordecreaseshipmentstotheU.S.marketgreatly;anestimateintherangeof4to7is suggested.
U.S.demandelasticity TheU.S.demandelasticityforIMTDCsmeasuresthesensitivityoftheoverallquantity demandedtoachangeintheU.S.marketpriceofIMTDCs.Thisestimatedependsonfactors discussedearliersuchastheexistence,availability,andcommercialviabilityofsubstitute products,aswellasthecomponentshareoftheIMTDCsintheproductionofanydownstream products.Basedontheavailableinformation,theaggregatedemandforIMTDCsislikelytobe inelastic;arangeofͲ0.5toͲ0.9issuggested. 18Oneofthesepurchasers,***,indicatedthatitscomparisonsarebasedontotalcost,quality, delivery,andleadtime,notoncountryoforigin. 19AsupplyfunctionisnotdefinedinthecaseofanonͲcompetitivemarket. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 130 of 218
IIͲ19 Substitutionelasticity Theelasticityofsubstitutiondependsupontheextentofproductdifferentiation betweenthedomesticandimportedproducts. 20Productdifferentiation,inturn,dependsupon suchfactorsasquality(e.g.,appearance,packaging,performance,etc.)andconditionsofsale (e.g.,availability,salesterms/discounts/promotions,etc.).Basedonavailableinformation,the elasticityofsubstitutionbetweenU.S.ͲproducedlargeͲdiameterIMTDCsandimportedlargeͲ diameterIMTDCsislikelytobeintherangeof3to5. 20ThesubstitutionelasticitymeasurestheresponsivenessoftherelativeU.S.consumptionlevelsof thesubjectimportsandthedomesticlikeproductstochangesintheirrelativeprices.Thisreflectshow easilypurchasersswitchfromtheU.S.producttothesubjectproducts(orviceversa)whenprices change. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 131 of 218
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IIIͲ1 PARTIII: U.S.PRODUCER’SPRODUCTION,SHIPMENTS,AND EMPLOYMENT
TheCommissionanalyzesanumberoffactorsinmakinginjurydeterminations(see19 U.S.C.§§1677(7)(B)and1677(7)(C)).Informationonthesubsidiesanddumpingmarginswas presentedinPartIofthisreportandinformationonthevolumeandpricingofimportsofthe subjectmerchandiseispresentedinPartIVandPartV.Informationontheotherfactors specifiedispresentedinthissectionand/orPartVIand(exceptasnoted)isbasedonthe questionnaireresponsesof10producersthatareestimatedtohaveaccountedfor approximately90percentofU.S.productionoffinishedIMTDCsduring2015andapproximately twoͲthirdsofU.S.productionofunfinishedIMTDCs.
U.S.PRODUCERS TheCommissionissuedU.S.producers’questionnairesto233foundries,integrated firms,andfinishersidentifiedaspotentialproducersofunfinishedand/orfinishedIMTDCsby TBWinitspetitions,byinterestedpartiesparticipatingintheseinvestigations,orbyother availableindustrysources. 1FiveintegratedfirmsthatbothcastandfinishIMTDCsprovideda responsetotheCommission’sproducerquestionnaire:Bremen,EnDyn,Goldens,Martin Sprocket,andTBW.Inaddition,fivefinishersthatfinishIMTDCsintheirfacilitiesfrom purchasedcastingsprovidedausableresponsetotheCommission’sproducerquestionnaire: B&B,Baldor,HiͲLo,Maurey,andSterling.2 Onefoundry(Waupaca)thatcastsIMTDCsbutdoesnotfinishtheitemsinits manufacturingfacilitiesalsoprovidedacompleteresponsetotheproducerquestionnaireand indicated***.Waupaca,whichiswhollyownedby***,reportedthatitsfoundryproduced***
1Thelistofpossibleproducerstowhichquestionnairesweresentincludesintegratedfirms, foundries,andfinishers.SeventyͲsevenfirmsrespondedthattheydidnotproduceIMTDCs.ofthe firmstowhichquestionnaireswereissuedbutthatdidnotrespondwerefirmsidentifiedinthe preliminaryphaseoftheseinvestigationsbyBaldorasmajordomesticsuppliersofunfinishedIMTDCs ()andfinishedIMTDCs().listedbyBaldorthatsuppliedacompletedproducerquestionnaire responsetotheCommission.BaldornotedthataccountedforpercentofitsunfinishedIMTDC purchasesin2015.Inaddition,firmsidentifiedbyCaterpillarinthepreliminaryphaseofthese investigationsasitsmajordomesticsuppliersoffinishedIMTDCs()didnotrespondtothe Commission’sproducerquestionnaireinthesefinalphaseinvestigations,althoughfourfirmsit identifiedassuppliers()indicatedthattheydonotproduceIMTDCs.Caterpillarhasnotifiedthe Commissioninthesefinalphaseinvestigationsthat,withthemostrecentchangeinthescope,theitems itimportsarenolongersubjectmerchandise. 2FinisherSkywayalsorespondedtotheCommission’sproducerquestionnairereportingdata concerningits.However,accordingtoadditionallanguageconcerningtheexclusionofsuchitemsin Commerce’sfinaldeterminations,theitemsproducedbySkywayarenolongerinͲscopemerchandise. Therefore,Skyway’squestionnaireresponseisnotincludedintheaggregatedatapresentedinthis report. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 133 of 218
IIIͲ2 ofcastingsduring2015,percentofwhicharebelievedtobeinͲscopeIMTDCs.Italso reportedthat.However,becauseWaupaca’squestionnaireresponsewithrespecttoinͲ scopeIMTDCsisbelievedtobeoverstatedbytheinclusionofoutͲofͲscopeitems,itsdataand otherfirmͲspecificinformationarenotaggregatedwiththeU.S.industrydatapresentedinthe bodyofthisreportbutarepresentedseparatelyinappendixC,tablesCͲ2throughCͲ5. 3 Waupaca’sunfinishedIMTDCsthatwerefinishedbyarereflectedintheU.S.industry’sdata asfinishedIMTDCs. ThefollowingfouradditionaldomesticfoundriesrespondedtotheCommission’s producerquestionnairebutwereunabletoprovidecompletedataandotherinformation requestedbytheCommission:Brillion,GreatLakesCastings,Osco,andTorrance.reported thatitproducedapproximatelyofIMTDCsin2015andthatitsfoundryhasanoverall castingcapacityofpounds.reportedthatitsfoundryhasanoverallcastingcapacityof .Itnotedthatitproduces“numerous”otherproducts,suchashydraulicbrakecomponents, oilpumpbodies,oilpumpcovers,valvebodies,pumpbodies,endbells,pillowblocks,elbows, andnumerousotherparts.Itstatedthat“mostfoundriesproduceavarietyofcastingsnotjust oneproductlinesuchassheaves,pulleys,etc.”reportedthatitsoverallcastingbusiness amountstoapproximately,ofwhichIMTDCsareestimatedtoaccountfor. reportedthatitshipped***ofIMTDCcastingsin2015tocustomersthatincorporatedthe castingsascomponentsintheirproductlinesratherthansellingthemachinedpart.
3OfthetoptenfirmsthatWaupacalistedasitmaincustomersofIMTDCs(***),threefirms(i.e., ***)havereportedthatinͲscopemerchandiseisnotpartoftheirproductlinepurchases.Inaddition, isafirmthatisnotlikelytoincludeinͲscopeitemsinitsproductlinesbasedonareviewofthefirm’s webpagesandreportedsourcingIMTDCsonlyfromU.S.finishersandnotfromcastingoperations. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 134 of 218
IIIͲ3 TableIIIͲ1listsrespondingintegratedU.S.producersandfinishersofIMTDCs,their productionlocations,positionsonthepetitions,andsharesofreported2015production.
Table III-1 IMTDCs: U.S. producers, their position on the petitions, location of production, and share of reported production, 2015 Firm Position on petition Production location(s) Share of casting production (percent) Share of finishing production (percent) Based on pieces Based on pounds Based on pieces Based on pounds B&B *** La Porte, IN *** *** *** *** Baldor *** Weaverville, NC 1 *** *** *** *** Bremen *** Bremen, IN *** *** *** *** EnDyn *** Alice, TX San Antonio, TX *** *** *** *** Goldens *** Columbus, GA *** *** *** *** Hi-Lo *** Stacy, MN *** *** *** *** Martin Sprocket *** Arlington, TX Abilene, TX Ft. Worth, TX Dallas, TX *** *** *** *** Maurey *** 3 Holly Springs, MS *** *** *** *** Sterling *** Columbus, IN *** *** *** *** TBW 4 Petitioner Chambersburg, PA *** *** *** *** Total *** *** *** *** 1 Baldor closed its Canadian facility and relocated the production finishing equipment to its facilities in Weaverville and Marion, North Carolina. 2 Less than 0.05 percent. 3 ***. 4 ***. Source: Compiled from data submitted in response to Commission questionnaires.
Relatedand/oraffiliatedfirms TableIIIͲ2presentsinformationonU.S.producers’ownershipandrelatedand/or affiliatedfirms.Asshown,***are(orwere)relatedtoforeignproducersofthesubject merchandise.However,aspreviouslynoted,BaldorCanadacloseditsSt.Claire,Quebecfacility onMay27,2016andrelocateditsCanadianfinishingequipmenttotheBaldorfacilitiesin WeavervilleandMarion,NorthCarolina.AlsoBaldorChina/Maskapermanentlyclosedits Changzhou,ChinafacilityinDecember2014anddisposedofalloftheproductionequipment. 4 Table III-2 IMTDCs: U.S. producers' ownership, related and/or affiliated firms
4Conferencetranscript,p.22(McCartney). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 135 of 218
IIIͲ4 Changesinoperations Severalrespondingdomesticproducersreportedchangesintheiroperationsrelatedto theproductionofIMTDCssinceJanuary1,2013.Detailsconcerningthechangesreportedare presentedintableIIIͲ3.
Table III-3 IMTDCs: U.S. producers' reported changes in operations, since January 1, 2013
WithregardstotheclosureofitsCanadianfacility,Baldorreportedthat,.5This decisiontocloseitsSt.ClairefacilityandrelocateitsequipmenttoNorthCarolinawasreported byparentABBpubliclyinanApril2016pressrelease.6Inthatannouncement,thecompany notedthat“Thecurrenteconomiccontext,theslowdowninworldmarketsandinstabilityinoil andgaspricesareallfactorsthathaveledtoadeclineindemandforproductsmadeinthe installationofSt.Claire.Inaddition,thepetitionlaunchedintheU.S.inautumn2015tothe impositionofantidumpingdutiesoncertaincomponentsusedininstallationsSt.Claireledto furtheruncertainties.Therefore,thisconsolidationofoperationswillallowustotake advantageoftheexcesscapacityofourotherfacilities,toenhanceourcompetitivenessand improvetheservicetoourNorthAmericancustomers.”7 BaldorreportedtotheCommissionthattherelocationoftheCanadianfacilitytothe UnitedStateswasdoneto.Infact,BaldorreportedthattheSt.Clairemanufacturingfacility inCanadais***.Baldorreportedthatitcurrentlysourcescastingsforthepartsmachinedon thefinishingequipmentmovedfromCanadatotheUnitedStatesprimarilyfrom***.8
PRODUCTIONͲRELATEDACTIVITIES IntheCommission’sproducerquestionnaire,firmswithfinishingoperationsbutnot castingoperationswereaskedtodescribethesourceandextentoftheircapitaland investment,thequantityandtypeofpartssourcedintheUnitedStates,thevalueͲadded operationsperformedintheUnitedStates,thetechnicalexpertiseinvolvedintheU.S.finishing operations,andanyothercostsoractivitiesintheUnitedStatesdirectlyleadingtothe productionoffinishedIMTDCs.Inaddition,firmswithbothcastingandfinishingoperationsin
5***. 6“ABBconsolidesesactivitésdeSainteͲClaireauxÉtatsͲUnis,”CNWTelbic,April26,2016,accessed athttp://www.newswire.ca/fr/newsͲreleases/abbͲconsolideͲsesͲactivitesͲdeͲsainteͲclaireͲauxͲetatsͲ unisͲ577168771.html. 7Ibid.(translatedfrompressreleaseinFrench). 8***.Inthepreliminaryphaseoftheseinvestigations,Baldorreportedthatitsourcedcastingsforits U.S.facilitysolelyfromU.S.foundries.Conferencetranscript,pp.17Ͳ18(McCartney). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 136 of 218
IIIͲ5 theUnitedStateswereaskedtodescribeandquantifytheamountofcapitalinvestment neededtoproduceIMTDCsforcastingandforfinishingseparately.TheresponsesofU.S. producerstotheseitemsaresummarizedbelow.
Capitalinvestments Fivedomesticproducerswithfinishingoperationsbutnotcastingoperationsprovided feedbackontheCommission’srequesttodescribethesourceandextentoftheircapitaland investments.TheresponsesofthesefivefinishersaresummarizedintableIIIͲ4. Table III-4 IMTDCs: U.S. finishers' source and extent of capital investment
Fiveintegratedproducers(i.e.,firmsthatoperatebothcastingandfinishingoperations intheUnitedStates)providedfeedbackontheCommission’srequesttodescribeandquantify theamountofcapitalinvestmentneededtoproduceIMTDCsforcastingandforfinishing separately.TheresponsesofthesefiveintegratedproducersarelistedintableIIIͲ5.
Table III-5 IMTDCs: U.S. integrated producers' extent of capital investment
Technicalexpertise TendomesticproducersprovidedfeedbackontheCommission’srequesttodescribethe technicalexpertiseinvolvedintheU.S.finishingoperations.AllfivefirmsthatfinishIMTDCsbut donotalsocasttheitemsindicatedintheirquestionnaireresponsesthattechnicalexpertiseis requiredtomachineIMTDCsfromtheunfinishedcastings.Threeintegratedfirms() reportedthatnosubstantialtechnicalexpertiseisrequiredtomachineIMTDCsfromthe unfinishedcastingsandthreesmallerintegratedfirms()indicatedthatsuchexpertiseis required.TheresponsesofthesefirmsaresummarizedintableIIIͲ6.
Table III-6 IMTDCs: U.S. producers' technical expertise
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IIIͲ6 Valueadded SixdomesticproducersprovidednarrativefeedbackontheCommission’srequestto describethevalueaddedoperationsbyfinishersintheUnitedStates.Theresponsesofthese firmsaresummarizedintableIIIͲ7.
Table III-7 IMTDCs: U.S. finishers' value added
TheCommissionexaminedconverting/finishingoperationsandthevalueaddedtothe rawmaterialspurchasedorprovidedbythefirmusingsuchservices(atolleetotoller relationship,forexample).ThevalueͲaddedanalysisusestworatios:(1)theratioofconversion costs,whicharedirectlaborandotherfactorycosts(factoryoverhead)tototalCOGS;and(2) theratioofthesumofconversioncostsplusSG&AexpensestothesumoftotalCOGSplus SG&Aexpenses.Theanalysisreliesontheseparationofcostsoftheinputrawmaterialfrom costsrelatedtothatrawmaterial’sconversiontofinishedproduct.Intheseinvestigations,the coststructureofthefirmsthatperformfinishingoperationsreflectstheirpurchasesofcastings andtheirfinishingoperationsonly. 9TableIIIͲ8depictsvalueͲaddedcalculationsforthefive finishersandMartinSprocket.AvalueͲaddedcalculationisshownseparatelyforTBW’sMexico finishingoperations.
Table III-8 IMTDCs: Value-added analysis of U.S. firms performing finishing operations in the United States, and TBW’s Mexico finishing operations, fiscal years 2013-15, January-June 2015, and January- June 2016
Employmentlevels Theemploymentlevelsreportedbyintegratedproducers(Bremen,EnDyn,Goldens, MartinSprocket,andTBW)andfinishers(B&B,Baldor,HiͲLo,Maurey,andSterling)are presentedseparatelybytypeofproducerintableIIIͲ9.Apresentationoffullaggregate employmentindicatorsforalldomesticproducersispresentedlaterinPartIII(seetableIIIͲ18).
9Fivereportingfirmsthatarefinishersonly,i.e.,thosethatdonothavecastingcapabilityandrelyon purchasesofcastblanks,wereidentifiedinfootnote1ofPartVI:B&B,Baldor,HiͲLo,Maurey,and Sterling.MartinSprocketalsoutilizescastings***.Additionally,TBWfinishescastingsthatweremadeat itsU.S.facilityatafacilityinMexico. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 138 of 218
IIIͲ7 Table III-9 IMTDCs: U.S. production and related workers, by type of producer, 2013-15, January to June 2015, and January to June 2016
Sourcingofparts WithregardtotheCommission’srequestoffinisherBaldortodescribethequantityand typeofpartssourcedintheUnitedStates,thefirmresponded***.10Thedomesticfoundries fromwhichBaldorpurchasedunfinishedIMTDCcastingsin2015withthepercentageeach representedofthefirm’stotalunfinishedcastingpurchasesisasfollows:.11During2015, Baldor’sU.S.purchasesofunfinishedcastingsproducedintheUnitedStatesamountedto$. FinisherSterlingreportedthatofitscastings/forgingsforIMTDCsaresourcedinthe UnitedStatesandlistedthefollowingdomesticsuppliersofunfinishedIMTDCs:.During 2015,Sterling’sU.S.purchasesofunfinishedcastingsproducedintheUnitedStatesamounted toalmost$. FinisherMaurey,whichreported$ofU.S.purchasesofunfinishedcastingsproduced intheUnitedStatesin2015,listeditsdomesticsuppliersofunfinishedIMTDCsasfollows:. MaureyreportedthatofitsproductionoffinishedIMTDCsin2015(basedonquantityin pieces)werefromdomesticallyproducedcastingsandtheremainingwerefromimported castings. FinisherHiͲLoreportedthatofitscastings/forgingsforIMTDCsaresourcedinthe UnitedStatesfrom***.AlthoughHiͲLodidnotprovidedataconcerningtheamountofitsU.S. purchasesofcastings,itreportedthatU.S.shipmentsoffinishedIMTDCs(producedfrom domesticcastings)amountedto$in2015. During2015,percentofU.S.producers’combinedfinishedIMTDCproductionin termsofpieceswasfromunfinishedIMTDCs.ApproximatelyofU.S.producers’ combinedfinishedIMTDCproductionin2015wasfromcastIMTDCs.Onlypercentwas fromunfinishedIMTDCsandpercentwasfromunfinishedIMTDCs.
Othercostsandactivities OthercostsoractivitiesintheUnitedStatesdescribedbyIMTDCproducersasdirectly leadingtotheproductionoffinishedIMTDCsincludethefollowing:sourcing,manufacturing, designengineering,machinesetͲup,productionscheduling,maintenance(plant,tooling,and equipment),staffing,humanresources,insurance,overhead,SG&Aexpenses,and subcontractedspecifications,suchaspaintingorplating.
10However,BaldorreportedtotheCommissionthat***.Baldor’sresponsetosupplemental questions,EDISDocumentNumber593979. 11Allofthesefoundrieswereissuedproducerquestionnaires***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 139 of 218
IIIͲ8 U.S.PRODUCTION,CAPACITY,ANDCAPACITYUTILIZATION CombinedU.S.capacity,production,andcapacityutilizationdataforallfinishedand unfinishedIMTDCsarepresentedintableIIIͲ10andfigureIIIͲ1.Thecapacityandproduction presentedisreportedonacombinedor“merged”basis,removingthedoubleͲcountingfor castingproductionandcapacitythatiseitherreflectedinfinishers’capacityandproduction because(1)thefirminternallyconsumesunfinishedIMTDCsthatitproduces,or(2)thefinisher reportedcapacityandproductionofproductsthatitmanufacturedfromunfinishedIMTDCs thatitpurchasedatanarm’slengthfromadomesticfoundry.Thereporteddatashowthatthe domesticproducers’aggregatecapacityincreasedfrom2013to2015,whilereporteddomestic productionincreasedfrom2013to2014,butfellin2015toalevelhigherthanreportedin 2013.Capacityutilizationincreasedfrompercentin2013topercentin2014butfellto ***percentin2015.Capacity,production,andcapacityutilizationwerelowerduringthefirst halfof2016thaninthecomparableperiodof2015.
Table III-10 IMTDCs: U.S. producers' capacity, production, and capacity utilization, 2013-15, January to June 2015, and January to June 2016
Figure III-1 IMTDCs: U.S. producers' capacity, production, and capacity utilization, 2013-15, January to June 2015, and January to June 2016
Alternativeproducts FinishedIMTDCs PresentedintableIIIͲ11aredataconcerningdomesticfirms’overallcapacityand productionintheirfinishingoperations.Thesedatashowthatduring2015,(intermsof pounds)andapproximately(intermsofpieces)offinisheditemsproducedbyresponding U.S.firmsareIMTDCs,regardlessofsize,whereas***(intermsofpounds)andapproximately (intermsofpieces)ofproductionareothernonͲIMTDCitems.Sixdomesticproducers reportedtheproductionofotherproductsfinishedonthesameequipmentasIMTDCs.These otherproductsinclude.SixrespondingfirmsthatfinishIMTDCs()indicatedthatthey wereabletoswitchproductionfromIMTDCstootherproductsusingthesameequipmentand labor,whereasfourfirms()indicatedthattheycouldnot. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 140 of 218
IIIͲ9 Table III-11 IMTDCs: U.S. firms’ overall finishing capacity and production on the same equipment as in-scope finished IMTDC production, 2013-15, January to June 2015, and January to June 2016
UnfinishedIMTDCs PresentedintableIIIͲ12aredataconcerningdomesticfirms’overallcastingcapacityand production.Thesedatashowthatduring2015,percent(intermsofpieces)ofunfinished items(i.e.,castings)producedbyrespondingU.S.firmsareIMTDCs,regardlessofsize,whereas percent(intermsofpieces)ofproductionareothernonͲIMTDCcastings.OthernonͲIMTDC castingsinclude.ThreerespondingfirmsthatcastIMTDCs()indicatedthattheywere abletoswitchproductionfromIMTDCcastingstootherproductsusingthesameequipment andlabor,whereastwofirms(***)indicatedthattheycouldnot.
Table III-12 IMTDCs: U.S. firms’ overall casting capacity and production on the same equipment as in-scope unfinished IMTDC production, 2013-15, January to June 2015, and January to June 2016
U.S.PRODUCERS’U.S.SHIPMENTSANDEXPORTS TotalU.S.shipmentsofIMTDCs TableIIIͲ13presentstotalU.S.shipmentsofIMTDCsforpurposesoftheapparentU.S. consumptioncalculation.TheseU.S.shipmentdatareflectU.S.producers’U.S.shipmentsof finishedIMTDCsproducedfrominternallyconsumedunfinishedIMTDCsandfromdomestically purchasedunfinishedIMTDCs.ThedataalsoincludecommercialU.S.shipmentsofunfinished IMTDCsnetofthoseusedandreportedbyfinishersasfinishedIMTDCs.ThevalueofU.S. producers’U.S.shipmentsforapparentU.S.consumptionpurposesreflectsthetotalshipment valuesofthequantitymeasuresdescribedabove,butalsoaddsintheincrementalvalue attributabletofinishingoperationsconductedintheUnitedStatesonimportsofunfinished IMTDCs.However,theaverageunitvalueofU.S.producers’U.S.shipmentsdoesnotinclude thevalueaddedtotheimportedunfinishedIMTDCs,asthequantitiesarecountedasimportsin apparentU.S.consumption.ThesedatashowthattotalU.S.producers’U.S.shipmentsof IMTDCsdeclinedirregularlyintermsofquantityandvaluefrom2013to2015.U.S.shipments werelowerinthefirsthalfof2016intermsofpiecesandvaluethaninthecomparableperiod of2015. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 141 of 218
IIIͲ10 Table III-13 IMTDCs: U.S. producers' U.S. shipments for use in apparent U.S. consumption, 2013-15, January to June 2015, and January to June 2016
FinishedIMTDCs TableIIIͲ14presentsU.S.producers’U.S.shipments,exportshipments,andtotal shipmentsoffinishedIMTDCs.VirtuallynointernalconsumptionorU.S.companytransfersof finishedIMTDCswerereportedbyU.S.producers.U.S.producers’totalshipments,ofwhich morethanpercentwereU.S.shipmentsduring2013Ͳ15,increasedfrom2013to2014,but fellin2015toalevelthatwashigherthanreportedin2013.U.S.producers’totalshipments werelowerinthefirsthalfof2016thaninthefirsthalfof2015.TotalU.S.producers’U.S. shipmentsoffinishedIMTDCsintermsofquantity(inpieces)andvaluelikewiseincreasedfrom 2013to2014,butdeclinedin2015tolevelshigherthanthosereportedin2013.TotalU.S. producers’U.S.shipmentsoffinishedIMTDCswerelowerinthefirsthalfof2016thanthey wereinthecomparableperiodof2015intermsofquantity(inpieces)andvalue.Unitvaluesof U.S.shipments,whichwereconsistentlylowerthanU.S.producers’exportunitvalues,fellfrom 2013to2014butincreasedin2015.TheunitvalueofU.S.shipmentsinthefirsthalfof2016 waslowerthantheunitvalueinthefirsthalfof2015. firmsreportedexportshipmentsoftheIMTDCstheyfinished.Principalexport marketsidentifiedinclude,whereas***.didnotidentifytheirprincipalexport markets.wasthelargestexporteroffinishedIMTDCs,accountingformorethanof domesticproducers’U.S.exportsduring2015intermsofvalue.Exportsaccountedfor percentofU.S.producers’combinedtotalshipmentsoffinishedIMTDCsintermsofpieces during2015and***percentintermsofvalue. Table III-14 IMTDCs: U.S. producers' U.S. shipments, export shipments, and total shipments of finished IMTDCs, 2013-15, January to June 2015, and January to June 2016
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IIIͲ11 UnfinishedIMTDCs(notfurtherfinishedbyfirmintheUnitedStates) TableIIIͲ15presentsU.S.producers’U.S.shipments,exportshipments,andtotal shipmentsofunfinishedIMTDCs.TworespondingIMTDCintegratedproducerswithcasting operationsreportedcommercialU.S.shipmentsofunfinishedIMTDCsproducedintheir facilities(***).wastheonlyrespondingIMTDCcasterthatreportedexportsofunfinished castings..U.S.producers’U.S.shipmentsofunfinishedIMTDCsgenerallydeclinedfrom 2013to2015intermsofquantity(inpieces)andvalue.Inaddition,suchshipmentsduringthe firsthalfof2016werelowerthanreportedinthecomparableperiodin2015.
Table III-15 IMTDCs: U.S. producers' U.S. shipments, export shipments, and total shipments of unfinished IMTDCs, 2013-15, January to June 2015, and January to June 2016
U.S.PRODUCERS’INVENTORIES TableIIIͲ16presentsU.S.producers’endͲofͲperiodinventoriesoffinishedIMTDCsand theratiooftheseinventoriestoU.S.producers’production,U.S.shipments,andtotal shipmentsduring2013Ͳ15,JanuarytoJune2015,andJanuarytoJune2016.Sevendomestic producersheldinventoriesoffinishedIMTDCsduring2015,ofwhichaccountedfor percentofthetotalheldininventory.AggregatedatashowthatinventoriesoffinishedIMTDCs increasedduring2013Ͳ15andwerehigherinthefirsthalfof2016thaninthefirsthalfof2015. U.S.producers’inventorieswereequivalenttobetweenpercentofU.S.producers’total shipmentsduring2013Ͳ15,andreachedpercentduringthefirsthalfof2016.Therewere noreportedinventoriesofunfinishedcastingsheldbyU.S.producers.
Table III-16 IMTDCs: U.S. producers' inventories of finished IMTDCs, 2013-15, January to June 2015, and January to June 2016
U.S.PRODUCERS’IMPORTS U.S.producers’importsofIMTDCsarepresentedintableIIIͲ17.
Table III-17 IMTDCs: U.S. producers' imports, 2013-15, January to June 2015, and January to June 2016
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IIIͲ12 U.S.EMPLOYMENT,WAGES,ANDPRODUCTIVITY TableIIIͲ18showsU.S.producers’employmentͲrelateddata.CombinedU.S.producers’ employmentmeasuredbyproductionandrelatedworkers(“PRWs”)increasedoverallfrom 2013to2015,butwaslowerduringthefirsthalfof2016ascomparedwiththefirsthalfof 2015.Totalhoursworked,hoursworkedperPRW,andwagespaidfollowedthissamegeneral trend.Productivityshowedoveralldeclinessince2013beforepartiallyrecoveringinJanuaryͲ June2016;however,hourlywagesandunitlaborcostshowedconsistentincreases.
Table III-18 IMTDCs: U.S. producers' employment related data, 2013-15, January to June 2015, and January to June 2016
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IVͲ1 PARTIV: U.S.IMPORTS,APPARENTU.S.CONSUMPTION,ANDMARKET SHARES U.S.IMPORTERS TheCommissionissuedimporterquestionnairesto91firmsbelievedtobepossible importersofsubjectlargeͲdiameterIMTDCs,aswellastoanadditional212firmsthatwere identifiedaspossibleU.S.producersofIMTDCs. 1Usablequestionnaireresponseswerereceived from25companiesindicatingthattheyhadimportedIMTDCs,whileanadditional120firms reportedthattheyhadnotimportedIMTDCssinceJanuary1,2013.TableIVͲ1listsall respondingU.S.importersofIMTDCsfromCanada,China,andothersources,theirlocations, andtheirsharesofreportedU.S.importsofIMTDCsin2015. 2 Forpurposesofidentifyingpossibleimportersofthesubjectmerchandisetowhich questionnaireswereissuedintheseinvestigations,stafffocusedonavailableinformation pertainingtothefollowingthreeHTSstatisticalreportingnumbers:8483.50.6000, 8483.50.9040,and8483.90.8080.Thepetitionerreliedonthesethreenumbersasthebest availableforitscalculationofU.S.importsinitspetitions,althoughitnotedthatthesenumbers arebroaderproductcategorieswhichlikelyincludemerchandisethatisoutsidethescopeof thepetitions. 3 1TheCommissionissuedquestionnairesto18firmsidentifiedinthepetitions,alongwithadditional firmsthat,basedonareviewofdataprovidedbyU.S.CustomsandBorderProtection(“Customs”),are leadingimportersofitemsimportedunderHTSstatisticalreportingnumbers8483.50.6000, 8483.50.9040,and8483.90.8080(theprimaryHTSstatisticalreportingnumbersidentifiedinthe petitions)since2013.Inaddition,allfirmsreceivingaU.S.producerquestionnairealsoreceivedaU.S. importerquestionnaire. 2Inadditiontothe25companieslistedintableIVͲ1thatprovidedusableimporterquestionnaire responses,LorenCookCo.(“Cook”)alsoprovidedaquestionnaireresponsethatincluded***. 3Petitions,vol.I,p.10. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 145 of 218
IVͲ2 Table IV-1 IMTDCs: U.S. importers, their headquarters, and share of total imports by source (based on pieces), 2015 Firm Headquarters Share of imports by source (percent) Canada China Subject sources Non- subject large- diameter Total large- diameter Total small- diameter Total all sizes AMEC Industry Ontario, CA *** *** *** *** *** *** *** ATP Inc. Elk Grove Village, IL *** *** *** *** *** *** *** B&B Laporte, IN *** *** *** *** *** *** *** Baart Industrial Group Boise, ID *** *** *** *** *** *** *** Baldor Ft. Smith, AR *** *** *** *** *** *** *** Bando USA Inc. Itasca, IL *** *** *** *** *** *** *** CNH Industrial Racine, WI *** *** *** *** *** *** *** Cummins Inc. Columbus, IN *** *** *** *** *** *** *** Daimler Trucks North America Portland, OR *** *** *** *** *** *** *** Detroit Diesel Detroit, MI *** *** *** *** *** *** *** Martin Sprocket Arlington, TX *** *** *** *** *** *** *** MasterDrive, Inc. Fort Atkinson, WI *** *** *** *** *** *** *** Maurey Holly Springs, MS *** *** *** *** *** *** *** McGuire Bearing Portland, OR *** *** *** *** *** *** *** MTU America Inc. Novi, MI *** *** *** *** *** *** *** New Standard Power Transmission Ontario, CA *** *** *** *** *** *** *** New Hampshire Industries Lebanon, NH *** *** *** *** *** *** *** Nord Gear Corp. Waunakee, WI *** *** *** *** *** *** *** RAK Ind., Inc., dba Power Rite Products New Brunswick, NJ *** *** *** *** *** *** *** Regal Beloit Corp. Beloit, WI *** *** *** *** *** *** *** Schaeffler Group USA Fort Mill, SC *** *** *** *** *** *** *** Scott Engineering Loveland, OH *** *** *** *** *** *** *** TBW Chambersburg, PA *** *** *** *** *** *** *** The Crosby Group Tulsa, OK *** *** *** *** *** *** *** U.S. Tsubaki Wheeling, IL *** *** *** *** *** *** *** Total *** *** *** *** *** *** *** 1 ***. Source: Compiled from data submitted in response to Commission questionnaires.
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IVͲ3 Staffissuedquestionnairestoleadingcompaniesidentifiedinthattogether accountedfor61.0percentofthetotalvalueofimportsfromallcountriesunderthethree primaryHTSprovisionsidentifiedbypetitioner.4Companiesthatrespondedtothe Commission’squestionnaires,eitherwithdataorbycertifyingthattheydidnotimportthe subjectmerchandise,accountedforthefollowingsharesof2015imports(byvalue)under thoseprovisions,accordingto:
• Canada:82.2percent • China:40.0percent • Subjectcountries(CanadaandChina):55.7percent • Nonsubjectcountries:40.4percent • Total(subjectandnonsubject):46.2percent
Staffalsoissuedquestionnairestoallcompaniesidentifiedasimportersinthepetitions (basedonabroaderproposedscopethanthatonwhichCommercemadeitspreliminary determinations).Fifteenoftheeighteencompaniesidentifiedinthepetitionsasimporters responded(83percent),eitherwithdataorbycertifyingthattheydidnotimportthesubject merchandise. Staffestimatesimporters’questionnairedatacoveragetobeatleast50percent. However,presentingadecisiveestimateiscomplicatedbytheinclusionofsubjectand nonsubjectmerchandiseinthevariousrelevantHTSprovisions,thelargenumberofpotential importersidentifiedbyproprietaryCustomsdata(especiallycomparedtotherelativelysmall numberofimportersidentifiedinthepetitions),thediversityofsizesandapplicationsofthe productatissue(makingitdifficulttoidentifyrelevantimportersbybusinesslineoraverage unitvalueonimports),andtheshiftingdefinitionoftheimportedsubjectmerchandiseitself.
U.S.IMPORTS U.S.importsfromsubjectandnonsubjectsources IMTDCs TableIVͲ2andfigureIVͲ1presentdataforU.S.importsofIMTDCsfromCanada,China, andallothersources.ThesedatashowthatimportsofinͲscopeIMTDCs(i.e.,atleast4inchesin outsidediameter)fromthesubjectcountriesincreasedby7.4percentbasedonquantity(in pieces)and10.3percentbasedonvaluefrom2013to2015.Theseimportswere23.1percent lowerbasedonquantity(inpieces)and28.2percentlowerbasedonvalueduringthefirsthalf of2016comparedwiththefirsthalfof2015.Theaverageunitvalueofsubjectimports 4Theremaining39percentofthetotalvalueofimportsunderthethreeprimaryHTSprovisionswere importedbymorethan3,000smallerimportingfirms. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 147 of 218
IVͲ4 increasedoverallfrom2013to2015,butwaslowerinthefirsthalfof2016comparedwiththe firsthalfof2015.
Table IV-2 IMTDCs: U.S. imports, by source, 2013-15, January to June 2015, and January to June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Quantity (pieces) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 1,461,606 1,525,610 1,569,599 757,013 582,468 Nonsubject sources large-diameter 636,044 652,449 633,414 321,527 346,244 Nonsubject sources small-diameter 2,645,744 2,836,622 2,873,882 1,431,003 1,586,087 Nonsubject sources of all sizes 3,281,788 3,489,071 3,507,296 1,752,530 1,932,331 All sources all sizes 4,743,394 5,014,681 5,076,895 2,509,543 2,514,799 Value (1,000 dollars) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 34,241 35,732 37,778 18,456 13,246 Nonsubject sources large-diameter 24,544 24,998 23,578 11,880 11,213 Nonsubject sources small-diameter 28,050 34,476 21,116 10,581 9,930 Nonsubject sources of all sizes 52,594 59,474 44,693 22,461 21,143 All sources all sizes 86,835 95,205 82,471 40,917 34,388 Unit value (dollars per piece) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 23.43 23.42 24.07 24.38 22.74 Nonsubject sources large-diameter 38.59 38.31 37.22 36.95 32.39 Nonsubject sources small-diameter 1 10.60 12.15 7.35 7.39 6.26 Nonsubject sources of all sizes 16.03 17.05 12.74 12.82 10.94 All sources all sizes 18.31 18.99 16.24 16.30 13.67 Table continued on next page. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 148 of 218
IVͲ5 Table IV-2--Continued IMTDCs: U.S. imports, by source, 2013-15, January to June 2015, and January to June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Share of quantity (percent) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 30.8 30.4 30.9 30.2 23.2 Nonsubject sources large-diameter 13.4 13.0 12.5 12.8 13.8 Nonsubject sources small-diameter 55.8 56.6 56.6 57.0 63.1 Nonsubject sources of all sizes 69.2 69.6 69.1 69.8 76.8 All sources all sizes 100.0 100.0 100.0 100.0 100.0 Share of value (percent) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 39.4 37.5 45.8 45.1 38.5 Nonsubject sources large-diameter 28.3 26.3 28.6 29.0 32.6 Nonsubject sources small-diameter 32.3 36.2 25.6 25.9 28.9 Nonsubject sources of all sizes 60.6 62.5 54.2 54.9 61.5 All sources all sizes 100.0 100.0 100.0 100.0 100.0 Ratio to U.S. production (percent) U.S. imports from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources *** *** *** *** *** Nonsubject sources large-diameter *** *** *** *** *** Nonsubject sources small-diameter *** *** *** *** *** Nonsubject sources of all sizes *** *** *** *** *** All sources all sizes *** *** *** *** *** 1 The increase in unit value for U.S. imports of small-diameter IMTDCs from nonsubject sources from 2013 and 2014 and the decline in unit value from 2014 to 2015 is largely attributable to a change in imported product mix by ***, which accounted for ***. Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 149 of 218
IVͲ6 Figure IV-1 IMTDCs: U.S. import volumes and prices, 2013-15, January to June 2015, and January to June 2016 Source: Compiled from data submitted in response to Commission questionnaires.
AsashareoftotalIMTDCimports(intermsofpieces),inͲscopeimportsfromCanada andChinacombineddecreasedfrom30.8percentin2013to30.4percentin2014,before increasingto30.9percentin2015.InͲscopeimportsfromsubjectcountriesaccountedfor30.2 percentoftotalimports(intermsofpieces)inthefirsthalfof2015and23.2percentoftotal U.S.importsinthefirsthalfof2016.AsashareoftotalIMTDCimports(intermsofvalue),inͲ scopeimportsfromCanadaandChinacombineddecreasedfrom39.4percentin2013to37.5 percentin2014,beforeincreasingto45.8percentin2015.InͲscopeimportsfromsubject countriesaccountedfor45.1percentoftotalimports(intermsofvalue)inthefirsthalfof2015 and38.5percentoftotalU.S.importsinthefirsthalfof2016. MexicowasoneofthelargestreportednonsubjectsourcesforU.S.importsofIMTDCs, accountingforpercentoftotalU.S.importsoflargeͲdiameterIMTDCsin2015intermsof quantity(inpieces),percentoftotalU.S.importsofsmallͲdiameterIMTDCs,and percentofthequantityoftotalU.S.importsofIMTDCsin2015. 5U.S.importsofIMTDCsfrom allnonsubjectcountriesincreasedoverallfrom2013to2015(intermsofquantityinpieces), andwerehigherduringthefirsthalfof2016thaninthecomparableperiodof2015.The averageunitvaluesofnonsubjectimportsdecreasedfrom2013to2015,andwerelowerinthe firsthalfof2016comparedwiththefirsthalfof2015. ThecombinedratioofinͲscopeimportsfromCanadaandChinatoU.S.production(on thebasisofquantityinpieces)fellfrompercentin2013topercentin2014,but increasedtopercentin2015.Thecombinedratiowaslowerinthefirsthalfof2016at*** percentthaninthefirsthalfof2015at***percent.Adecliningoveralltrendintheratioof 5ThesedatadonotincludeTBW’simportsofIMTDCsfinishedinMexicofromcastingsproducedin theUnitedStates. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 150 of 218
IVͲ7 importstoU.S.productionwasobservedforCanadaindividually,withtheratioofinͲscope importsfromCanadatoU.S.productionfallingfrompercentin2013topercentin 2015.AnoverallincreasingtrendintheratioofimportstoU.S.productionwasobservedfor Chinaindividually,withtheratioofinͲscopeimportsfromChinatoU.S.productionincreasing frompercentin2013topercentin2015.TheratiosforCanadaandChinawerelowerin thefirsthalfof2016atpercentandpercentthaninthefirsthalfof2015atpercent andpercent,respectively.
FinishedandunfinishedIMTDCs TableIVͲ3presentsdataforU.S.shipmentsofimports,bysourceandbylevelof finishing(i.e.,finishedandunfinished).ThesedatashowthatalmostallIMTDCimports(*** percentofU.S.shipmentsofimportsin2015basedonquantityinpiecesandpercentof U.S.shipmentsofimportsin2015basedonvalue)arefinished.Ofthelimitedvolumeof unfinishedIMTDCs,U.S.shipmentsofinͲscopeimportsfromChinaaccountedforthemajority ofthetotalU.S.shipmentsofunfinishedIMTDCimports().ForfinishedIMTDCs, Commerce’sscopeindicatesthatthecountryoforiginforimportedITDCsisthecountrywhere thefinishedIMTDCwascast/forged,sotheCommission’squestionnairedatawerecollectedon thatbasis. Table IV-3 IMTDCs: U.S. importers' U.S. shipments by source and finishing, 2013-15, January to June 2015, and January to June 2016
Table continued on following page. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 151 of 218
IVͲ8 Table IV-3--Continued IMTDCs: U.S. importers' U.S. shipments by source and finishing, 2013-15, January to June 2015, and January to June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Quantity (pieces) U.S. shipments of IMTDCs imported from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 1,319,110 1,405,280 1,349,482 695,379 521,554 Nonsubject sources large-diameter 578,694 588,300 561,421 281,534 305,140 Nonsubject sources small-diameter 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258 Nonsubject sources of all sizes 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398 All sources all sizes 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952 Value (1,000 dollars) U.S. shipments of IMTDCs imported from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 42,171 44,129 40,231 21,036 15,612 Nonsubject sources large-diameter 28,290 27,518 26,430 13,170 13,191 Nonsubject sources small-diameter 33,645 39,695 25,623 12,964 12,107 Nonsubject sources of all sizes 61,934 67,213 52,053 26,135 25,298 All sources all sizes 104,105 111,342 92,284 47,170 40,910 Unit value (dollars per piece) U.S. shipments of IMTDCs imported from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 31.97 31.40 29.81 30.25 29.93 Nonsubject sources large-diameter 48.89 46.78 47.08 46.78 43.23 Nonsubject sources small-diameter 13.26 15.36 10.03 10.00 9.49 Nonsubject sources of all sizes 19.88 21.19 16.70 16.56 16.00 All sources all sizes 23.48 24.32 20.66 20.75 19.45 Share of total (percent) U.S. shipments of IMTDCs imported from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 29.7 30.7 30.2 30.6 24.8 Nonsubject sources large-diameter 13.1 12.9 12.6 12.4 14.5 Nonsubject sources small-diameter 57.2 56.4 57.2 57.0 60.7 Nonsubject sources of all sizes 70.3 69.3 69.8 69.4 75.2 All sources all sizes 100.0 100.0 100.0 100.0 100.0 1 ***. 2 ***. Note.--U.S. shipments of imports of small-diameter IMTDCs are included in the nonsubject sources small- diameter aggregate as these imports from subject countries are out-of-scope and therefore not considered subject imports. Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 152 of 218
IVͲ9 Negligibleimports Thestatuterequiresthataninvestigationbeterminatedwithoutaninjury determinationifimportsofthesubjectmerchandisearefoundtobenegligible. 6Negligible importsaregenerallydefinedintheTariffActof1930,asamended,asimportsfromacountry ofmerchandisecorrespondingtoadomesticlikeproductwheresuchimportsaccountforless than3percentofthevolumeofallsuchmerchandiseimportedintotheUnitedStatesinthe mostrecent12Ͳmonthperiodforwhichdataareavailablethatprecedesthefilingofthe petitionortheinitiationoftheinvestigation.However,ifthereareimportsofsuchmerchandise fromanumberofcountriessubjecttoinvestigationsinitiatedonthesamedaythatindividually accountforlessthan3percentofthetotalvolumeofthesubjectmerchandise,andifthe importsfromthosecountriescollectivelyaccountformorethan7percentofthevolumeofall suchmerchandiseimportedintotheUnitedStatesduringtheapplicable12Ͳmonthperiod,then importsfromsuchcountriesaredeemednottobenegligible. 7 TableIVͲ4presentsdataonU.S.importsofIMTDCsduringthe12Ͳmonthperiod precedingthefilingofthepetitionsforwhichdataareavailable.Threeseparatesetsofimport dataarepresentedforcomparisonpurposes:(1)Importdatacompiledfromofficialimport statisticsfortheperiodOctober2014ͲSeptember2015,whicharevastlyoverstatedwiththe inclusionofalargeamountofoutͲofͲscopemerchandise;(2)Importdatacompiledfrom preliminaryphasequestionnairesfortheperiodOctober2014ͲSeptember2015,whichare somewhatoverstatedbecausetheydonotreflectcertainscopeexclusionssubsequentlymade byCommerce;and(3)Importdatacompiledfromfinalphasequestionnairesforcalendaryear 2015,whicharemorealignedwithCommerce’scurrentscopebutarenotfortheexacttime periodimmediatelyprecedingthefilingofthepetitions.Thesedatashowthatreportedimports fromCanadaandChinaindividuallyaccountedformorethan3percentoftotalimportsof largeͲdiameterIMTDCsandcollectivelyaccountedformorethan7percentoftotalimportsof largeͲdiameterIMTDCs.
6Sections703(a)(1),705(b)(1),733(a)(1),and735(b)(1)oftheAct(19U.S.C.§§1671b(a)(1), 1671d(b)(1),1673b(a)(1),and1673d(b)(1)). 7Section771(24)oftheAct(19U.S.C§1677(24)). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 153 of 218
IVͲ10 Table IV-4 IMTDCs: U.S. imports in the 12-month period immediately preceding the filing of the petitions, October 2014 through September 2015 Item October 2014 through September 2015 Calendar year 2015 Official import statistics Preliminary phase questionnaire data Final phase questionnaire data Value (1,000 dollars) Share of value (percent) Value (1,000 dollars) Share of value (percent) Value (1,000 dollars) Share of value (percent) U.S. imports from-- Canada 123,849 16.3 *** *** *** *** China 167,412 22.1 *** *** *** *** Subtotal, subject sources 291,261 38.4 38,905 47.9 37,778 45.8 Nonsubject sources 467,016 61.6 42,320 52.1 44,693 54.2 All sources 758,277 100.0 81,225 100.0 82,471 100.0 Source: Compiled from data submitted in response to Commission questionnaires, and official U.S. import statistics using HTS statistical reporting numbers 8483.50.6000, 8483.50.9040, and 8483.90.8080, accessed September 10, 2016. Cumulation Inassessingwhetherimportsshouldbecumulated,theCommissiondetermines whetherU.S.importsfromthesubjectcountriescompetewitheachotherandwiththe domesticlikeproductandhasgenerallyconsideredfourfactors:(1)fungibility,(2)presenceof salesorofferstosellinthesamegeographicalmarkets,(3)commonorsimilarchannelsof distribution,and(4)simultaneouspresenceintheU.S.market.Certaininformationconcerning thesefactorsispresentedinPartIIofthisreport.Informationconcerningfungibilityandsalesin thegeographicalmarketsispresentedbelow. DataconcerningU.S.importers’U.S.shipmentsofsmallͲandlargeͲdiameterIMTDCs werepresentedpreviouslyintableIVͲ3.Thesedatashowthatduring2015,57.2percentofU.S. importers’U.S.shipmentsweresmallͲdiameterIMTDCs,percentwerelargeͲdiameter ChineseIMTDCs(inͲscope),percentwerelargeͲdiameterCanadianIMTDCs(inͲscope),and 12.6percentwerelargeͲdiameterIMTDCsfromnonsubjectcountries.U.S.producersprovided productiondataconcerningsmallͲandlargeͲdiameterIMTDCs.Thesedatawerepresented previouslyinPartIIIofthisreportintableIIIͲ11(finished)andtableIIIͲ12(unfinished).These datashowthatduring2015,percentofU.S.productionoffinishedIMTDCsandpercent ofU.S.productionofunfinishedIMTDCswerelargeͲdiameterandpercentofU.S. productionoffinishedIMTDCsandpercentofU.S.productionofunfinishedIMTDCswere smallͲdiameter. DataconcerningU.S.importers’U.S.shipmentsoffinishedandunfinishedIMTDCswere presentedpreviouslyintableIVͲ3.Thesedatashowthatduring2015,percentofU.S. importers’U.S.shipmentswerefinishedIMTDCsandpercentwereunfinished.U.S. producers’U.S.shipmentsofunfinishedandfinishedIMTDCswerepresentedpreviouslyinPart IIIofthisreportintableIIIͲ14(finished)andtableIIIͲ15(unfinished).Thesedatashowthat during2015,U.S.producers’U.S.shipmentsoffinishedIMTDCsamountedtopiecesand U.S.producers’U.S.shipmentsofunfinishedIMTDCsthatwerenotfurtherfinished(internally consumed)bytheirfirmintheUnitedStatesamountedtopieces. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 154 of 218
IVͲ11 TableIVͲ5presentsofficialU.S.importstatisticsbyCustomsdistrictsofentry.These dataarebasedonimportsenteringtheUnitedStatesunderthreebroadHTSstatistical reportingnumbers(8483.50.6000,8483.50.9040,and8483.90.8080)thatincludeasubstantial amountofmerchandisethatfallsoutsidethescopeoftheseinvestigations.Regardless,these datashowthat,althoughasubstantialshareofimportsfromCanada,China,andother countriesunderthesebroadcategoriesentertheUnitedStatesinCustomsdistrictslocatedin Midweststates(e.g.,Illinois,Ohio,andMichigan),theseimportsalsoenterCustomsdistrictsin Northeast,Mountains,Southeast,PacificCoast,andCentralSouthwestgeographicalareas(e.g., NewYork,Montana,Georgia,SouthCarolina,California,Louisiana,andTexas). Table IV-5 IMTDCs: U.S. imports by customs districts of entry, 2015 Customs entry district Calendar year 2015 Value (1,000 dollars) Share of value (percent) U.S. imports from Canada.-- Detroit, MI 107,828 89.1 Buffalo, NY 3,341 2.8 Great Falls, MT 2,990 2.5 Ogdensburg, NY 1,678 1.4 New Orleans, LA 1,546 1.3 All other districts 3,615 3.0 Total U.S. imports from Canada 120,998 100.0 U.S. imports from China.-- Chicago, IL 67,339 40.0 Cleveland, OH 22,116 13.1 Los Angeles, CA 13,928 8.3 Charleston, SC 13,131 7.8 Savannah, GA 8,970 5.3 All other districts 43,061 25.5 Total U.S. imports from China 168,545 100.0 U.S. imports from nonsubject sources.-- Chicago, IL 114,533 25.2 Cleveland, OH 39,510 8.7 New York, NY 37,976 8.4 Laredo, TX 31,197 6.9 New Orleans, LA 28,815 6.3 All other districts 201,753 44.5 Total U.S. imports from nonsubject sources 453,784 100.0 Source: Official U.S. import statistics using HTS statistical reporting numbers 8483.50.6000, 8483.50.9040, and 8483.90.8080, accessed September 10, 2016.
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IVͲ12 APPARENTU.S.CONSUMPTIONANDMARKETSHARES ApparentU.S.consumption TableIVͲ6andfigureIVͲ2presentcalculateddataonapparentU.S.consumptionof IMTDCs.TheU.S.componentoftheconsumptioncalculationreflectsU.S.producers’U.S. shipmentsoffinishedIMTDCsproducedfromunfinishedIMTDCscastintheUnitedStatesplus U.S.producers’U.S.shipmentsofunfinishedIMTDCsproducedintheUnitedStatesnotalready reportedasafinishedIMTDC.TheU.S.componentalsoincludesU.S.importers’U.S.shipments offinishedIMTDCsthatwerecast/forgedintheUnitedStatesbutfinishedabroad(e.g.,in Mexico).ThisquantitymeasureexcludesanyIMTDCsfinishedintheUnitedStatesfrom importedunfinishedIMTDCs,asthosearereportedforthepurposesofapparentU.S. consumptionasimports;asdiscussedabove,IMTDCsfinishedintheUnitedStatesfrom importedunfinishedIMTDCswerenominal. Table IV-6 IMTDCs: Apparent U.S. consumption, 2013-15, January to June 2015, and January to June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Quantity (pieces) U.S. producers' U.S. shipments *** *** *** *** *** U.S. importers' U.S. shipments from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 1,319,110 1,405,280 1,349,482 695,379 521,554 Nonsubject sources large-diameter 578,694 588,300 561,421 281,534 305,140 Nonsubject sources small-diameter 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258 Nonsubject sources of all sizes 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398 All sources all sizes 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952 Apparent U.S. consumption *** *** *** *** *** Value (1,000 dollars) U.S. producers' U.S. shipments *** *** *** *** *** U.S. importers' U.S. shipments from.-- Canada large-diameter *** *** *** *** *** China large-diameter *** *** *** *** *** Subtotal, subject sources 42,171 44,129 40,231 21,036 15,612 Nonsubject sources large-diameter 28,290 27,518 26,430 13,170 13,191 Nonsubject sources small-diameter 33,645 39,695 25,623 12,964 12,107 Nonsubject sources of all sizes 61,934 67,213 52,053 26,135 25,298 All sources all sizes 104,105 111,342 92,284 47,170 40,910 Apparent U.S. consumption *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Figure IV-2 IMTDCs: Apparent U.S. consumption, 2013-15, January to June 2015, and January to June 2016
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IVͲ13 ApparentU.S.consumption(intermsofquantityinpieces)increasedbypercent from2013to2014,butdeclinedbypercentin2015.ApparentU.S.consumptionintermsof pieceswaspercentlowerduringthefirsthalfof2016thaninthecomparableperiodof 2015.Similarly,apparentU.S.consumptionintermsofvalueincreasedbypercentfrom 2013to2014,butdeclinedbypercentin2015.ApparentU.S.consumptionintermsof valuewaspercentlowerduringJanuaryͲJune2016ascomparedwithJanuaryͲJune2015.
U.S.marketshares CalculatedU.S.marketsharedataforIMTDCsarepresentedintableIVͲ7.Onthebasis ofquantity,thesedatashowthattheU.S.producers’Ͳpercentmarketsharein2013 increasedbypercentagepointsin2014beforedroppingbacktopercentin2015.The marketshareheldbyU.S.producersintermsofpiecesduringthefirsthalfof2016was percentagepointslessthanthatheldduringthefirsthalfof2015.Onthebasisofvalue,U.S. producersheldaͲpercentmarketsharein2013Ͳ14,whichincreasedtopercentin2015. ThemarketshareheldbyU.S.producersintermsofvalueduringthefirsthalfof2016(*** percent)waspercentagepointsmorethanthatheldduringthefirsthalfof2015. Themarketshareheldbysubjectsourcesintermsofpiecesincreasedby percentagepointsfrompercentin2013topercentin2015.Themarketshareheldby subjectsourcescombinedintermsofpieceswasloweratpercentininthefirsthalfof2016 whencomparedtopercentinthefirsthalfof2015.Themarketshareheldbysubject sourcesintermsofvaluefellfrompercentin2013topercentin2014beforeincreasing topercentin2015.Themarketshareheldbysubjectsourcescombinedintermsofvalue wasloweratpercentinthefirsthalfof2016whencomparedto***percentinthefirsthalf of2015. Nonsubjectsourcesshowedanoveralldeclineinmarketshareduring2013Ͳ15,butthe marketshareheldbynonsubjectsourcesduringthefirsthalfof2016washigherthanthat reportedinthecomparableperiodof2015. Table IV-7 IMTDCs: Market shares, 2013-15, January to June 2015, and January to June 2016
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VͲ1 PARTV: PRICINGDATA FACTORSAFFECTINGPRICES Rawmaterialandenergycosts Forallofthe10reportingU.S.firmstogether,producingbothcastingsandfinished IMTDCs,rawmaterialcostsasashareoftotalcostofgoodssold(“COGS”)increasedfrom*** percentin2013topercentin2015.ForU.S.reportingfirmswithcastingandintegrated castingandfinishingoperations,thatratioincreasedfrompercentin2013topercent in2015,whileforU.S.firmswithfinishingoperationsonly,theratiodeclinedfrompercent in2013to***percentin2015. Pigiron,scrapiron,andferrousscrapmetalaretheprincipalrawmaterialsusedin production. 1PigironandferrousscrappricesareshowninfigureVͲ1.Electricityandnaturalgas arealsocosts, 2andtheirpricesareprovidedinfigureVͲ2. Figure V-1 Raw materials: Prices of imported pig iron and of ferrous scrap, January 2013-September 2016
1Petition,p.9. 2Conferencetranscript,p.104(Christenson),and***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 159 of 218
VͲ2 Figure V-2 Energy prices: Prices of industrial electricity and natural gas, January 2013-August 2016
Source: Energy Information Administration and staff calculations.
Source: Energy Information Administration and staff calculations. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 160 of 218
VͲ3 Overall,pigironandscrappriceswerestablein2013andinto2014,fellinlate2014and 2015,andthenincreasedsomewhatin2016.Naturalgaspriceswerestableduringmostof 2013,increasedsharplyinlate2013andearly2014,andthendeclinedthroughJune2016 beforeincreasingslightlyinJulyandAugust2016.Electricitypricesweregenerallystablewith seasonalfluctuations. U.S.producersgenerallyreportedthatrawmaterialpriceshaddecreasedorhad fluctuatedsinceJanuary2013. 3***reportedthatrawmaterialpricesgenerallyincreasedfrom 2013to2014,decreasedsomewhatin2015,andthenbegantoincreaseinthefirsthalfof 2016.
TransportationcoststotheU.S.market In2015,transportationcoststotheU.S.marketwere0.7percentforIMTDCsfrom Canada,6.4percentforIMTDCsfromChina,and0.9percentforIMTDCsfromMexico.4
U.S.inlandtransportationcosts Sixof11U.S.producersand13of21importerstypicallyarrangetransportationtotheir customers,while5producersand9importersreportedthattheirpurchaserstypicallyarrange transportation.U.S.producersandimportersgenerallyreportedU.S.inlandtransportation costsof1to5percentofthetotaldeliveredcostofIMTDCs. PRICINGPRACTICES Pricingmethods U.S.producersandimportersreportedusingtransactionͲbyͲtransactionnegotiations, contracts,andpricelists(tableVͲ1).TBWandBaldordescribedsellingIMTDCsbycatalogueas wellasthroughcustomorders.TBWaddedthatcustomordersofteninvolvesmallervolumes withlowerprofitmargins5andaneconomicconsultantforBaldorstatedthatbothfirmssell moreproductsfromtheircataloguesthanfromcustomorders.6***reportedthatitspricesto OEMsaresettransactionbytransactionwhereasitspricestodistributorsaresetbypricelists. ***reportedthateachofitsdistributioncustomershasadifferentmultiplieraddedtothelist pricetodeterminetheactualsellingprice.ItalsostatedthatitspricingtoendusersandOEMs
3Fiveproducersreportedthatrawmaterialpricesdecreased,fourreportedthattheyfluctuated,one reportednochange,andonereportedthattheyincreased. 4Transportationcostsweredeterminedbycomparingthec.i.f.valueofimportstotheCustomsvalue ofimportsforHTScodes8483.50.6000,8483.50.9040,and8483.90.8080. 5Conferencetranscript,pp.21and69(McCartney),andp.100(Crist). 6Conferencetranscript,p.69(Beck). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 161 of 218
VͲ4 ismorecompetitivethanpricingtodistributors,andthat***.7Somesuppliersalsooffer multiplebrandsofIMTDCsthataresoldatdifferentpricepoints. 8 Table V-1 IMTDCs: U.S. producers and importers reported price setting methods, by number of responding firms 1 Method U.S. producers U.S. importers Transaction-by-transaction 8 10 Contract 3 7 Set price list 4 16 Other 2 2 Total responding firms 11 21 1 The sum of responses in each column may not add up to the total number of responding firms, as each firm was instructed to check all applicable price setting methods employed. Note.—. Source: Compiled from data submitted in response to Commission questionnaires. Atthehearing,TBWstatedthatinthepastOEMsalmostalwayspurchasedthelowestͲ pricedproductwhereasdistributorsconsideredfactorssuchasquality,brand,andavailability butthatthesefactorshavebecomelessimportanttodistributors. 9Italsostatedthatthe IMTDCindustryusedtohavestandardizedpricingwithlistanddiscountstructuresparticularly inthedistributionchannel,butthatpricingnowmorecommonlyoccursthroughtransaction basednegotiations. 10 Eightofthe11respondingproducersand12of18respondingimportersreported sellingmainlyonaspotorshortͲtermcontractbasis.soldexclusivelyonaspotbasisin 2015,whilewereonanannualorlongͲtermcontractbasis.Importersalsosoldmostly onanannualorlongͲtermcontractbasis. LongͲtermcontractlengthrangedfromoneyeartotwoyearsanduptothree ormoreyears(***).U.S.producers’andimporters’annualandlongͲtermcontractstypically allowedpricerenegotiationduringthecontract,butdidnothavemeetͲorͲreleaseprovisions. Thirteenof24purchasersreportedthattheypurchaseIMTDCsdaily,8weekly,and2 monthly.Mostpurchasers(20of24)reportednochangeintheirpurchasingfrequencysince 2013.Mostpurchasersreportedcontacting1to5suppliersbeforemakingapurchase.
7***. 8Forexample,BaldorsellsIMTDCsundertheMaskaandDodgebrandsandRegalBeloitsellsIMTDCs undertheBrowningandLeesonbrands..Emailsfromandpurchaserquestionnaireresponses. 9Hearingtranscript,p.19(Crist). 10Hearingtranscript,pp.86Ͳ87(Christenson). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 162 of 218
VͲ5 Salestermsanddiscounts U.S.producersandamajorityofimporterstypicallyquotepricesonanf.o.b.basis,but oneͲthirdofrespondingimportersalsoquotepricesonadeliveredbasis. Fiveofthe11respondingU.S.producersofferquantitydiscounts,and3ofthese producersalsooffertotalvolumeand/orotherdiscounts.Theothersixproducersreported havingnodiscountpolicy.Mostrespondingimportersreportedofferingquantity,totalvolume, orotherdiscounts.Mostproducersandimportersalsoreportedsalestermsofnet30days.
Priceleadership Seventeenof24purchaserslistedoneormorepriceleaders.Thefirmsmostfrequently reportedtobepriceleaderswereBaldor(listedby10purchasers),TBW(listedby8 purchasers),andRegalBeloit(listedby5purchasers).Onepurchaserstatedthatthemajor manufacturerswerefirsttoannouncepriceincreases.SeveralfirmslistingBaldor(including specifyingBaldor’sDodgebrandandMaskabrand)statedthatBaldorofferedgoodqualityata reasonableprice,onestatedthatitwasanindustryleaderandprimarybrandforIMTDCs,and onepurchaserstatedthatBaldor’sMaskabrandwasaleaderin"down"pricing.Firmslisting TBWnotedthatithadnotincreasedpriceinthelast3years,offeredgoodvalue(qualityand cost),andthatitmaintainedpricesandresistedpricedecreases.Onepurchaserstatedthat RegalBeloit(Browningbrand)wasthehighestpricedsupplier.
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VͲ6 PRICEDATA TheCommissionrequestedU.S.producersandimporterstoprovidequarterlydatafor thetotalquantityandf.o.b.valueofthefollowingIMTDCproducts 11shippedtounrelatedU.S. distributorsandendusers/OEMsduringJanuary2013ͲJune2016.
Product1.ͲͲNarrow"3V"groovesheave,witha6.0Ͳinchoutsidediameterandthreegrooves, suitableforusewithTypeSDSbushing
Product2.ͲͲNarrow"5V"groovesheave,witha23.6Ͳinchoutsidediameterandeightgrooves, suitableforusewithTypeJbushing
Product3.ͲͲNarrow"5V"groovesheave,witha50Ͳinchoutsidediameterandsixgrooves, suitableforusewithTypeMbushing
Product4.ͲͲNarrow"5V"groovesheave,witha50Ͳinchoutsidediameterandeightgrooves, suitableforusewithTypeMbushing
Product5.ͲͲTypeEbushing,with3Ͳ3/8Ͳinchbore
Product6.ͲͲTypeFbushing,with3Ͳ3/8Ͳinchbore
FourU.S.producers12and11importers13providedusablepricingdataforsalesofthe requestedproducts,althoughnotallfirmsreportedpricingforallproductsforallquarters.14 Pricingdatareportedbythesefirmsaccountedforapproximately0.6percentofU.S.producers’ shipmentsofIMTDCs(smallͲandlargeͲdiameter),1.7percentofU.S.shipmentsofsubject importsfromCanadaand0.9percentofU.S.shipmentsofsubjectimportsfromChinain 2015. 15 Pricedataforproducts1Ͳ6arepresentedintablesVͲ2toVͲ7andfiguresVͲ3toVͲ8. NonsubjectcountrypricesarepresentedinAppendixD.
11ThepricingproductsaredifferentfromthoseinthepreliminaryͲphaseinvestigationsandinclude bushings,whichwerenotamongthepricingitemsinthepreliminaryphase,aswellassheaves.Basedon informationprovidedbythepetitionerincommentsonthedraftquestionnaires,staffselectedthefive largestvolumeproductsforTBWandMartinSprocket,aswellasasixthproduct(product1). 12U.S.producersreportingdatawere. 13ElevenimportersreporteddataforChina,one()reporteddataforCanada,andtwo() reporteddataforMexico. 14PerͲunitpricingdataarecalculatedfromtotalquantityandtotalvaluedataprovidedbyU.S. producersandimporters.Theprecisionandvariationofthesefiguresmaybeaffectedbyrounding, limitedquantities,andproducerorimporterestimates. 15PetitionernotedthatsincetherearemanyIMTDCspecifications,itssuggestedpricingproducts accountforasmallshareoftotalIMTDCsales.ItstatedthatTBW’sandotherproducers’catalogueslist thousandsofdifferentpartnumbers.TBW’sCommentsonDraftQuestionnaires,pp.5Ͳ6. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 164 of 218
VͲ7 Table V-2 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Table V-3 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Table V-4 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Table V-5 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Table V-6 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 5 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Table V-7 IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 6 and margins of underselling/(overselling), by quarters, January 2013-June 2016
Figure V-3a IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to distributors, by quarters, January 2013-June 2016
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VͲ8 Figure V-3b IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to end users, by quarters, January 2013-June 2016
Figure V-4a IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to distributors, by quarters, January 2013-June 2016
Figure V-4b IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to end users, by quarters, January 2013-June 2016
Figure V-5a IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to distributors, by quarters, January 2013-June 2016
Figure V-5b IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to end users, by quarters, January 2013-June 2016
Figure V-6a IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to distributors, by quarters, January 2013-June 2016
Figure V-6b IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to end users, by quarters, January 2013-June 2016
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VͲ9 Figure V-7a IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to distributors, by quarters, January 2013-June 2016
Figure V-7b IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to end users, by quarters, January 2013-June 2016
Figure V-8a IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to distributors, by quarters, January 2013-June 2016
Figure V-8b IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to end users, by quarters, January 2013-June 2016
Someofthepricingdatasubmittedbyfirmsshowedlargevariations.Severalfirms explainedthattheirpricescanvarysubstantiallydependingonfactorsincludingthebrand,the customer,theapplication,andtheleadtime.16Becauseofsuchvariationsforanindividual supplieraswellasamongsuppliers,pricesshowninthetablescanvarywidelyforsome productsandsomequarters.
Pricetrends PricesfluctuatedduringJanuary2013ͲJune2016,anddidnotshowacleartrend.Table VͲ8summarizesthepricetrends,bycountryandbyproduct.Asshowninthetable,fiveofthe priceseriesfordomesticproductshowedoverallincreasesandsixshowedoveralldecreases. PricedataforCanadaalsoshowedmixedtrends,whilepricedataforChinashowedoverall increases.
16***.
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VͲ10 Table V-8 IMTDCs: Summary of weighted-average f.o.b. prices for products 1-6 from the United States, Canada, and China
Pricecomparisons AsshownintableVͲ9,pricesforIMTDCsimportedfromsubjectcountrieswerebelow thoseforU.S.Ͳproducedproductin217of228instances(36,831pieces);marginsof undersellingrangedfrom0.1to84.8percent.Intheremaining11instances(253pieces),prices forIMTDCsimportedfromsubjectcountrieswere0.8to57.9percentabovepricesforthe domesticproduct.The11instancesofoversellingwereallforChineseproduct,andmostlyin product3,arelativelyhighͲvaluelowͲvolumeproduct. Table V-9 IMTDCs: Instances of underselling/overselling and the range and average of margins, by country, January 2013-June 2016 Source Underselling Number of quarters Quantity 1 (pieces) Average margin (percent) Margin range (percent) Min Max Canada 84 21,999 33.8 8.4 63.3 China 133 14,832 39.6 0.1 84.8 Total, underselling 217 36,831 37.4 0.1 84.8 Source (Overselling) Number of quarters Quantity1 (pieces) Average margin (percent) Margin range (percent) Min Max Canada 0 0 --- --- --- China 11 253 (15.6) (0.8) (57.9) Total, overselling 11 253 (15.6) (0.8) (57.9) 1 These data include only quarters in which there is a comparison between the U.S. and subject product. Source: Compiled from data submitted in response to Commission questionnaires. Forsalestodistributors,subjectimportpriceswerebelowthoseforU.S.Ͳproduced productin120of126instances(22,331pieces,marginsof0.1to81.2percent);andabove thosefordomesticproductin6instances(199pieces,marginsof0.8to24.7percent).Forsales toendusers,subjectimportpriceswerebelowthoseforU.S.Ͳproducedproductin97of102 instances(14,500pieces,marginsof8.4to84.8percent);andabovethosefordomesticproduct in5instances(54pieces,marginsof2.6to57.9percent). Forsheaves(products1Ͳ4),subjectimportpriceswerebelowthoseforU.S.Ͳproduced productin105of116instances(12,336pieces,marginsof0.1to84.8percent);andabove thosefordomesticproductin11instances(253pieces,marginsof0.8to57.9percent).For Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 168 of 218
VͲ11 bushings(products5Ͳ6),subjectimportpriceswerebelowthoseforU.S.Ͳproducedproductin all112instances(24,465pieces,marginsof8.4to52.5percent).
LOSTSALESANDLOSTREVENUE Inthefinalphaseoftheinvestigations,8ofthe11respondingU.S.producersreported thattheyhadtoreduceprices,3reportedtheyhadtorollbackannouncedpriceincreases,and 8reportedthattheyhadlostsales. 17AsnotedinPartII,theCommissionreceivedpurchaser questionnaireresponsesfrom24purchasers.18Respondingpurchasersreportedpurchasing$93 millionofIMTDCs,ofwhich$62millionwerelargeͲdiameterIMTDCs,during2015(tableVͲ10). Asnotedinthetable,somepurchasershaddifficultyinprovidingdataontheirIMTDC purchasesfortotalIMTDCpurchases,orbylargeͲandsmallͲdiameterIMTDCs,and/orby countryoforigin. 19 Table V-10 Large-diameter IMTDCs: Purchasers’ responses to purchasing patterns
Ofthe23respondingpurchasers,13reportedthattheyhadpurchasedsubjectimports insteadofIMTDCsfromU.S.producerssince2013,with13reportingpurchasingimportsfrom Canadaand10reportingpurchasingimportsfromChina(tableVͲ11). 20Elevenofthe13 purchasersthatreportedpurchasingsubjectimportsinsteadofdomesticproductreportedthat subjectimportswerepricedlowerthandomesticproduct.21 Table V-11 Large-diameter IMTDCs: Purchasers’ responses to shifting supply sources
17Threeproducersreportedthattheydidnotreduceprices;sevenreportedthattheydidnotroll backannouncedpriceincreases;and2reportedthathadnotlostsales. 18Twopurchasers()submittedlostsaleslostrevenuesurveyresponsesinthepreliminaryphase, andoneofthesefirms()submittedapurchaserquestionnaireresponseinthefinalphase. 19FirmswereinstructedtoreportcountryoforiginoffinishedIMTDCsbasedonthelocationwhere theIMTDCwascast/forged. 20Onepurchaser(***)didnotprovidearesponsetothisquestion. 21TenfirmsreportedthattheCanadianproductwaspricedlowerthandomesticproductand9firms reportedthattheChineseproductwaspricedlowerthandomesticproduct. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 169 of 218
VͲ12 Sixofthese13purchasersreportedthatpricewasthereasonforpurchasingsubject imports. 22Onlyonefirmprovidedanestimateofthequantityshiftedtosubjectimports;*** reportingshiftingpiecestoCanadaandtoChina.Otheridentifiedreasonsforshifting fromU.S.producerswerecustomerdemandandavailability. Ofthe24respondingpurchasers,4reportedthatU.S.producershadreducedpricesin ordertocompetewithlowerͲpricedimportsfromCanadaandChina(tableVͲ12;14reported thattheydidnotknow).Thereportedestimatedpricereductionrangedfrom4to30percent. Twofirmsreported4and9percentrespectivelyforbothCanadaandChina,andonereported 30percentforCanada.Indescribingthepricereductions,purchasersnotedincreaseddiscounts frompricelists,thatTBWheldpricessteady,andthatTBWandMartinSprocketloweredtheir pricestocompetewithBaldor’slowͲpricedMaskabrandsheavesfromCanada. Table V-12 Large-diameter IMTDCs: Purchasers’ responses to U.S. producer price reductions
22SixpurchasersreportedthatpricewasaprimaryreasonforCanada,and5reportedthatitwasa primaryreasonforChina. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 170 of 218
VIͲ1 PARTVI: FINANCIALEXPERIENCEOFU.S.PRODUCERS BACKGROUND TenU.S.producersprovideduseablefinancialdata.Theseincludefiveintegratedfirms thatproducecastingsandperformfinishingoperationsontheirowncastings 1andfivefirms thatperformfinishingoperationsonpurchasedcastings. 2Differencesbetweenthetradeand financialsectionsoftheCommission’squestionnaireare***.Asexplainedbelow,thedatain thissectionofthereportareforthesalesandcostsofsmallͲandlargeͲdiameter,finishedand unfinishedIMTDCs. 3OPERATIONSONIMTDCS Thepresentationofdataisorganizedasfollows: 4 x TableVIͲ1presentsaggregateddataontheintegrated(fivefirmsreporting integratedcastingandfinishing)andstandͲalonefinishing(fivefirmsreporting finishingoperationsonly)operationsofthereportingU.S.producers’operations inrelationtoIMTDCsandtableVIͲ2providesacalculationofchangesinthe averageunitvaluesforselectedfinancialelementspresentedintableVIͲ1.
x TableVIͲ3presentsprofitͲandͲlossdataofU.S.producerswithintegratedcasting andfinishingoperations, 5andtableVIͲ4(liketableVIͲ2)providesacalculationof changesintheaverageunitvaluesofselectedfinancialelements. x TableVIͲ5providesprofitͲandͲlossdataofthefivereportingfirms()with finishingoperationsonly.6TableVIͲ6providesacalculationofchangesinthe averageunitvaluesofselectedfinancialelementsfortableVIͲ5. 1Therewerefivereportingfirmsthatareintegratedproducers,i.e.,castandfinishthefirm’sown castings(althoughtheirfinishingoperationsmaybesupplementedbypurchasesofcastings):Bremen ();EnDyn();Goldens’Foundry();MartinSprocket();andTBW()... 2Therewerefivereportingfirmsthatarefinishersonly,thatdonothavecastingcapabilityandrely onpurchasesofcastblanks:B&B();Baldor();HiͲLo();Maurey();andSterling().A sixthfirm,. 3TherespondingfirmsgenerallyproduceproductsotherthanIMTDCsintheirfacilities,hencethe datarepresentallocations.Generallyspeaking,thepercentageofsalesvalueaccountedforbyIMTDCs rangesfrom***.SeeU.S.producers’questionnaireresponses,sectionIIIͲ5. 4Datapresentedheredifferfromthoseintheprehearingstaffreport:asdiscussedinsectionIIIof thereport,thedatafor***.ThedataforWaupacaseparatelyareprovidedinappendixC. 5***.FirmͲbyͲfirmdataontheirintegratedoperationsarepresentedinappendixE,tableEͲ1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 171 of 218
VIͲ2 Table VI-1 IMTDCs: Results of operations of U.S. producers, all firms, fiscal years 2013-15, January-June 2015, and January-June 2016 ******* Table VI-2 IMTDCs: Changes in average unit values for all firms, between fiscal years 2013-15, and between January-June 2015 and January-June 2016 ******* Table VI-3 IMTDCs: Results of operations of U.S. producers with integrated casting and finishing operations, fiscal years 2013-15, January-June 2015, and January-June 2016 ******* Table VI-4 IMTDCs: Changes in average unit values for U.S. producers with integrated casting and finishing operations, between fiscal years 2013-15, and between January-June 2015 and January-June 2016 ******* Table VI-5 IMTDCs: Results of operations of U.S. producers with finishing operations only, fiscal years 2013- 15, January-June 2015, and January-June 2016 ******* Table VI-6 IMTDCs: Changes in average unit values for U.S. producers with finishing operations only, between fiscal years 2013-15, and between January-June 2015 and January-June 2016 *******(…continued) 6Thesedataareforfirmswithfinishingoperationsonly,i.e.,thefirmspurchasecastingsfromwhich theyproducefinishedproduct.Includedinthesedataare***.FirmͲbyͲfirmdataontheirfinishing operationsarepresentedinappendixE,tableEͲ2. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 172 of 218
VIͲ3 Netsales BasedonthedataintablesVIͲ1(allfirms),totalnetsalesbyquantityandvalue increasedirregularlyfrom2013to2015andwerelowerinJanuaryͲJune2016(“interim2016”) thaninJanuaryͲJune2015(“interim2015”).Theaverageunitvalueofsalesforallreporting firmsincreasedfrom2013to2015andwas***higherininterim2016.SalesbyU.S.integrated firms(tableVIͲ3)declinedbyquantitybutincreased***from2013to2015andwerelowerin interim2016comparedwithinterim2015.SalesbyU.S.finishers(tableVIͲ5)increased irregularlyfrom2013to2015butwerelowerininterim2016comparedtointerim2015. BasedonthedataintableEͲ1(integratedcastingandfinishingoperations),*** reportedlowersalesbetween2013and2015;the***.Theaverageunitvalueofsales increasedirregularlyfrom2013to2015andwas***higherininterim2016thanintheperiod oneyearearlier(tablesVIͲ3andEͲ1).Thischangealsowasledbythedatareportedby***. BasedonthedataintablesVIͲ5andEͲ2,salesbyfinishersincreasedfrom2013to2015, accountedforbythedataof***.Theaverageunitvalueofsalesofthefinishersdeclinedfrom 2013to2015butwashigherininterim2016thanininterim2015.Costsandexpenses BasedonthedataintableVIͲ1,totalCOGSirregularlyincreasedfrom2013to2015and waslowerininterim2016comparedtotheperiodoneyearearlier.TheratiooftotalCOGSto totalnetsalesrosebypercentagepointsovertheannualperiodsbutwas*** percentagepointslowerininterim2016comparedwithinterim2015.Theaverageunitvalueof totalCOGSfollowedthatsametrends.ChangesintotalCOGS,theratiooftotalCOGStonet sales,andtheaverageunitvalueoftotalCOGSintablesVIͲ3andVIͲ5aresimilartothosein tableVIͲ1.ChangesintotalCOGSweregenerallyduetothedataof***(tableEͲ1).Among finisherfirmsthedataofaccountedformuchoftheincreaseintotalCOGSbetweenthe yearlyperiods(tableEͲ2).Changesinrawmaterialcostsgenerallyledtothechangesintotal COGS.Rawmaterials,asinputstotheproductionofcastingsoraspurchasedblanks,accounted forapproximatelypercentoftotalCOGSand***percentoftotalnetsalesduringthe periodsforwhichdataweregathered.ThevalueofSG&Aexpensesincreasedduring2013Ͳ15 butwaslowerininterim2016comparedtointerim2015.TheratioofSG&Aexpensestototal netsalesandperͲunitvaluesincreasedbetweentheannualperiodsandwerehigherininterim 2016.
Profitability BasedonthedataintableVIͲ1,operatingincomeandnetincomeofallfirmstogether fellfrom2013toalossin2015,butthetwoindicatorswerehigherininterim2016thanin interim2015;changesinthesemeasureswerelowerwhenexpressedasaratiotototalnet salesandonaperͲunitbasisfollowedthetrendsinvalue.Twofirms,,accountedfor.
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VIͲ4 Varianceanalysis AvarianceanalysisfortheoperationsofallU.S.producersofIMTDCsispresentedin tableVIͲ7thatcorrespondstothedataintableVIͲ1. 7Avarianceanalysisisamethodtoassess thechangesinprofitabilityfromperiodtoperiodbymeasuringtheimpactofchangesinthe relationshipsbetweenprice,cost,andvolume.Acalculationismadeoftheimpactofeach factorbyvaryingonlythatfactorwhileholdingallotherfactorsconstant.Thecomponentsof netsalesvariancesareeitherfavorable(positive),resultinginanincreaseinnetsalesand profitabilityorunfavorable(negative)resultingintheopposite. Table VI-7 IMTDCs; Variance analysis for U.S. producers, all firms, fiscal years 2013-15, January-June 2015, and January-June 2016 ******* TheanalysisintableVIͲ7indicatesthattheindustry’soperatingincomeandnetincome declinedbetween2013and2015becauseunfavorableoperatingcostsvariances(unitcosts increased)weregreaterthanfavorablepricevariances(unitsalesvaluesincreased).The industry’soperatingandnetincomeincreasedbetweentheinterimperiodsbecausethe favorablepricevariancewasgreaterthantheunfavorablenetcost/expensevariance.The analysisalsoindicatesthatthemixoffavorableandunfavorablevarianceschangedbetween periods—boththepricevarianceandnetcost/expensevarianceswereunfavorablebetween 2013and2014andcausedadeclineinoperatingincomewhileonlythepricevariancewas unfavorablebutwasgreaterthanthefavorablenetcost/expensevarianceandcausedadecline innetincomebetweenthosetwoyears.Althoughnotshown,avarianceanalysisforthe integratedfirms(correspondingtothedataintableVIͲ3)andforthefirmswithfinishing operationsonly(correspondingtothedataintableVIͲ5)issimilartothatpresentedhere. 7TheCommission’svarianceanalysisiscalculatedinthreeparts:Salesvariance,costofsales variance(COGSvariance),andSG&Aexpensevariance.Eachpartconsistsofapricevariance(inthecase ofthesalesvariance)oracostorexpensevariance(inthecaseoftheCOGSandSG&Aexpense variance),andavolumevariance.Thesalesorcost/expensevarianceiscalculatedasthechangeinunit priceorperͲunitcost/expensetimesthenewvolume,whilethevolumevarianceiscalculatedasthe changeinvolumetimestheoldunitpriceorperͲunitcost/expense.Summarizedatthebottomofeach table,thepricevarianceisfromsales,thecost/expensevarianceisthesumofthoseitemsfromCOGS andSG&Avariances,respectively,andthevolumevarianceisthesumofthevolumecomponentsofthe netsales,COGS,andSG&Aexpensevariances.Theoverallvolumecomponentofthevarianceanalysisis generallysmall. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 174 of 218
VIͲ5 CAPITALEXPENDITURESANDRESEARCHANDDEVELOPMENTEXPENSES TableVIͲ8presentscapitalexpendituresandresearchanddevelopment(“R&D”) expensesbyfirm. Table VI-8 IMTDCs: Capital expenditures and R&D expenses of U.S. producers, by firm, fiscal years 2013-15, January-June 2015, and January-June 2016 *******Capitalexpenditures,whichareincludedinafirm’sstatementofcashflowswithinthe section,“cashflowsfrominvestingactivities,”increasethevalueofspecificplantand equipmentandtotalassets,whilechargesfordepreciationandamortization,impairments,and divestitures,retirementorabandonmentofpropertydecreasethevalueofassets.Capital expendituresaremadeandR&Dexpensesareincurredtoachieveimprovementsinequipment orreduceoperatingcostsandthequalityofproductsproduced.Totalcapitalexpendituresfell from2013to2015butweregreaterininterim2016thanininterim2015. Firms’commentsaboutthenature,focus,andsignificanceoftheircapitalexpenditures andtheirR&DexpensesareshowninintableVIͲ9.
Table VI-9 IMTDCS: Narrative responses by U.S. producers on their capital expenditures and R&D expenses
ASSETSANDRETURNONINVESTMENT TablesVIͲ10andVIͲ11presentdataontheU.S.producers’totalassetsandtheirreturn oninvestment(“ROI”)forfirmswithcastingoperationsandfinishingoperations,respectively.
Table VI-10 IMTDCs: Total assets and ratio of operating income to assets for U.S. producers with integrated casting and finishing operations, fiscal years 2013-15
Table VI-11 IMTDCs: Total assets and ratio of operating income to assets for U.S. producers with finishing operations only, fiscal years 2013-15
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VIͲ6 ThedataforoperatingincomearefromtableVIͲ3,andtheratiotototalnetassets followedthetableVIͲ3data.Itfellsteadilyfrom2013to2015.Theassetturnoverratioisthe ratiooftotalnetsalestototalnetassetsandisameasureofefficiencybecauseitprovidesan indicationofhowefficiently$1ofassetsgenerates$1ofsales.IntableVIͲ10,onaverage$1of assetsgeneratedapproximately$***ofsalesin2015forintegratedU.S.producers. ThedataforoperatingincomearefromtableVIͲ5,andtheratiotototalnetassetsfell from2013to2015,partlybecausethetotalvalueofassetsincreased.Theassetturnoverratio istheratiooftotalnetsalestototalnetassetsandistermedameasureofefficiencybecauseit providesanindicationofhowefficiently$1ofassetsgenerates$1ofsales.IntableVIͲ11,$1of assetsgeneratedapproximately$***ofsalesin2015forU.S.producerswithfinishing operationsonly.CAPITALANDINVESTMENT TheCommissionrequestedU.S.producersofIMTDCstodescribeanyactualorpotential negativeeffectsofimportsofIMTDCsfromChinaorCanadaontheirfirms’growth,investment, abilitytoraisecapital,developmentandproductionefforts,orthescaleofcapitalinvestments. AppendixFpresentsU.S.producers’responses. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 176 of 218
VIIͲ1 PARTVII: THREATCONSIDERATIONSANDINFORMATIONON NONSUBJECTCOUNTRIES
Section771(7)(F)(i)oftheAct(19U.S.C.§1677(7)(F)(i))providesthat—
IndeterminingwhetheranindustryintheUnitedStatesisthreatened withmaterialinjurybyreasonofimports(orsalesforimportation)ofthe subjectmerchandise,theCommissionshallconsider,amongother relevanteconomicfactors 1ͲͲ
(I) ifacountervailablesubsidyisinvolved,suchinformationasmay bepresentedtoitbytheadministeringauthorityastothenature ofthesubsidy(particularlyastowhetherthecountervailable subsidyisasubsidydescribedinArticle3or6.1oftheSubsidies Agreement),andwhetherimportsofthesubjectmerchandiseare likelytoincrease, (II) anyexistingunusedproductioncapacityorimminent,substantial increaseinproductioncapacityintheexportingcountryindicating thelikelihoodofsubstantiallyincreasedimportsofthesubject merchandiseintotheUnitedStates,takingintoaccountthe availabilityofotherexportmarketstoabsorbanyadditional exports, (III) asignificantrateofincreaseofthevolumeormarketpenetration ofimportsofthesubjectmerchandiseindicatingthelikelihoodof substantiallyincreasedimports, (IV)whetherimportsofthesubjectmerchandiseareenteringatprices thatarelikelytohaveasignificantdepressingorsuppressing effectondomesticprices,andarelikelytoincreasedemandfor furtherimports, (V) inventoriesofthesubjectmerchandise,
1Section771(7)(F)(ii)oftheAct(19U.S.C.§1677(7)(F)(ii))providesthat“TheCommissionshall consider{thesefactors}...asawholeinmakingadeterminationofwhetherfurtherdumpedor subsidizedimportsareimminentandwhethermaterialinjurybyreasonofimportswouldoccurunless anorderisissuedorasuspensionagreementisacceptedunderthistitle.Thepresenceorabsenceof anyfactorwhichtheCommissionisrequiredtoconsider...shallnotnecessarilygivedecisiveguidance withrespecttothedetermination.Suchadeterminationmaynotbemadeonthebasisofmere conjectureorsupposition.” Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 177 of 218
VIIͲ2 (VI)thepotentialforproductͲshiftingifproductionfacilitiesinthe foreigncountry,whichcanbeusedtoproducethesubject merchandise,arecurrentlybeingusedtoproduceotherproducts, (VII) inanyinvestigationunderthistitlewhichinvolvesimportsofboth arawagriculturalproduct(withinthemeaningofparagraph (4)(E)(iv))andanyproductprocessedfromsuchrawagricultural product,thelikelihoodthattherewillbeincreasedimports,by reasonofproductshifting,ifthereisanaffirmativedetermination bytheCommissionundersection705(b)(1)or735(b)(1)with respecttoeithertherawagriculturalproductortheprocessed agriculturalproduct(butnotboth), (VIII) theactualandpotentialnegativeeffectsontheexisting developmentandproductioneffortsofthedomesticindustry, includingeffortstodevelopaderivativeormoreadvancedversion ofthedomesticlikeproduct,and (IX) anyotherdemonstrableadversetrendsthatindicatethe probabilitythatthereislikelytobematerialinjurybyreasonof imports(orsaleforimportation)ofthesubjectmerchandise (whetherornotitisactuallybeingimportedatthetime).2 Informationonthenatureofthesubsidieswaspresentedearlierinthisreport; informationonthevolumeandpricingofimportsofthesubjectmerchandiseispresentedin PartsIVandV;andinformationontheeffectsofimportsofthesubjectmerchandiseonU.S. producers’existingdevelopmentandproductioneffortsispresentedinPartVI.Informationon inventoriesofthesubjectmerchandise;foreignproducers’operations,includingthepotential for“productͲshifting;”anyotherthreatindicators,ifapplicable;andanydumpinginthirdͲ countrymarkets,follows.Alsopresentedinthissectionofthereportisinformationobtained forconsiderationbytheCommissiononnonsubjectcountries.
2Section771(7)(F)(iii)oftheAct(19U.S.C.§1677(7)(F)(iii))furtherprovidesthat,inantidumping investigations,“...theCommissionshallconsiderwhetherdumpinginthemarketsofforeigncountries (asevidencedbydumpingfindingsorantidumpingremediesinotherWTOmembermarketsagainstthe sameclassorkindofmerchandisemanufacturedorexportedbythesamepartyasunderinvestigation) suggestsathreatofmaterialinjurytothedomesticindustry.” Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 178 of 218
VIIͲ3 THEINDUSTRYINCANADA Overview Initsopinioninthepreliminaryphaseoftheseinvestigations,theCommissioninvited thepartiesinanyfinalphaseoftheseinvestigations,toidentify“foundriesandanyotherfirms thatmaybeproducingunfinishedorfinishedIMTDCsinCanada.” 3Intheircommentsonthe draftquestionnaires,nopartyidentifiedanyadditionalfirmsthatmightbeproducing unfinishedorfinishedIMTDCsinCanada.Inthefinalphaseoftheseinvestigations,the Commissionissuedforeignproducers’orexporters’questionnairestotwentyͲthreefirms, includingninefirmsidentifiedinthepetitions,believedtoproduceand/orexportIMTDCsfrom Canada.45UseableresponsestotheCommission’squestionnairewerereceivedfromonefirm: BaldorElectricCanada(“BaldorCanada”).Accordingtoestimatesprovidedbytheresponding Canadianproducerinitsquestionnaireresponse,BaldorCanadaaccountedforapproximately percentofallproductionofIMTDCsinCanadaandapproximatelypercentofCanadian exportstotheUnitedStatesduring2015.Thefirm’sreportedexportstotheUnitedStateswere equivalentto***percentofU.S.importsofIMTDCsfromCanadaduring2015asreportedin Commissionimporterquestionnaireresponses. Aspreviouslynoted,BaldorCanadacloseditsSt.Claire,QuebecfacilityonMay27,2016 andrelocateditsCanadianfinishingequipmenttotheBaldorfacilitiesinWeavervilleand Marion,NorthCarolina.Thepetitionerhasargued,however,thattheclosedBaldorCanada plantwasonlyafinishingfacility,andtheclosurehashadnoeffectonCanadiancasting capacity.6Thepetitionercitedanadditional42ironcastingplantsinCanada,atleast29of whichitclaimsalreadycastIMTDCsorhavethecapabilitytodoso. 7Thepetitioneralsonoted thatLaforoIronFoundryhadaclosesupplierrelationshipwithBaldorCanada. 8Furthermore,in itspostͲhearingbrief,thepetitionerprovidedthenamesof14Canadianmachiningfacilities andalludedtothepresenceofover500machiningoperationsthatcouldpossiblyhavethe capacitytofinishIMTDCs. 9Baldorreportedthatitcurrentlysourcescastingsfortheparts
3PreliminaryOpinionatfootnote230. 4Thesefirmswereidentifiedthroughareviewofinformationsubmittedinthepetitionand containedin***records. 5FirmsreportedproductionoflargeͲdiameterIMTDCstomatchCommerce’sscope.Forpurposesof determiningoverallplantcapacity,dataonoutͲofͲscopeitems(includingsmallͲdiameterIMTDCs) producedusingthesameequipmentandemployeeswerecollected. 6Hearingtranscript,pp.43Ͳ44(Pickard). 7Petitioner’sposthearingbrief,pp.19Ͳ20. 8Petitioner’sprehearingbrief,exh.3. 9Petitioner’sposthearingbrief,exhs.14and15.Initspetition,thepetitioneridentifiedonlynine possibleproducersofIMTDCsinCanada,fourofwhichindicatedintheirresponsetotheCommission’s questionnairethattheyhadnotproducedIMTDCs. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 179 of 218
VIIͲ4 machinedonthefinishingequipmentmovedfromCanadatotheUnitedStatesprimarilyfrom foundriesin***.10 TableVIIͲ1presentsinformationonBaldor’sIMTDCoperationsinCanadaandcertain 2015summarydatareportedinitsquestionnaireresponse. Table VII-1 IMTDCs: Summary data on the responding firm in Canada, 2015
Changesinoperations BaldorCanadashutdownoperationsinCanadaeffectiveMay27,2016anditsfinishing equipmentwasrelocatedtotheBaldorplantsinWeaverville,NorthCarolinaandMarion,North Carolina.***.11 OperationsonIMTDCs TableVIIͲ2presentsinformationontheIMTDCoperationsofBaldorCanada.Thedata presentedforCanadaaretheportionoffinishedIMTDCsmachinedinBaldor’sCanadian finishingfacilityfromunfinishedIMTDCscast/forgedinCanada. Table VII-2 IMTDCs: Data on the industry in Canada, 2013-15, January to June 2015, January to June 2016, and projected calendar years 2016 and 2017
BaldorCanada’sproductionandshipmentsrosefrom2013to2014beforedecreasing below2013levelsin2015followingthe***.Capacitydidnotchangeandcapacityutilization roseandfellbutdidnotfallbelow2013levelsin2015.Production,capacityutilization,and shipmentswerehigherduringthefirsthalfof2015thaninthecomparableperiodof2016. Capacitydidnotchange.BaldorCanada’sexportstotheUnitedStatesaccountedforofthe firm’stotalshipments,risingfrompercentoftotalshipmentsin2013topercentof totalshipmentsin2015.Thefirm’sexportstotheUnitedStatesaccountedforpercentof totalshipmentsduringJanuaryͲJune2016.ExportsofIMTDCstotheUnitedStatesbyBaldor Canadaincreasedbypercentfrompiecesin2013topiecesin2015,butwere percentloweratpiecesinthefirsthalfof2016comparedwithpiecesinthefirsthalfof 2015.Homemarketshipmentsaccountedforofthefirm’sshipments,decreasingfrom percentoftotalshipmentsin2013to***percentoftotalshipmentsin2015.Thefirm’shome
10***. 11***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 180 of 218
VIIͲ5 marketshipmentsaccountedforpercentofitstotalshipmentsduringJanuaryͲJune2016. BaldorCanadaexportIMTDCstomarketsotherthantheUnitedStates.
Alternativeproducts AsshownintableVIIͲ3,IMTDCsconstitutereportedproductiononshared equipmentbyBaldorinCanada.InͲscope(large)IMTDCsrepresentslightlylessthanof productionvolumebyweight,andslightlymorethan***bypiececount. Table VII-3 IMTDCs: Canada producer’s overall capacity and production on the same (finishing) equipment as subject production, 2013-15, January to June 2015, and January to June 2016
Exports GlobalTradeAtlas(“GTA”)dataforthevalueoftotalexportsfromCanadaby destinationmarketfor2013to2015arepresentedintableVIIͲ4. 12Theseofficialexports statistics,whichcoveritemsexportedunderHSsubheading8483.50(“flywheelsandpulleys, includingpulleyblocks”),includenotonlytheinͲscopeIMTDCsbutalsoasubstantialamountof itemsthatarenotcoveredbythescopeoftheseinvestigations(e.g.,steel,plastic,and aluminumpulleys).InͲscopeIMTDCsmayalsobeexportedunderothersubheadings.Thedata presentedintableVIIͲ4showthatCanada’stopexportmarketfortheseproductsistheUnited States,accountingfor44.8percentoftotalexportsfromCanadaduring2015.Thenexttwo largestdestinationmarketsforexportsofflywheelsandpulleysfromCanadaareJapanand China,accountingfor14.5percentand10.2percentoftotalexportsfromCanadain2015, respectively.
12Onlyvaluedataarepresentedbecausequantitydataarenotconsistentlyavailableforall destinationmarkets. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 181 of 218
VIIͲ6 Table VII-4 Flywheels and pulleys: Canada exports by destination markets, 2013-15 Item Calendar year 2013 2014 2015 Value (1,000 dollars) Canada's exports to the United States 181,355 197,320 193,345 Canada's exports to other major destination markets.-- Japan 38,587 56,185 62,478 China 29,912 42,978 43,938 Germany 31,802 36,625 34,172 Korea 14,520 25,479 21,658 France 24,784 20,114 13,985 Poland 10,061 12,275 10,553 Mexico 1,558 1,071 8,937 Italy 6,021 4,633 6,601 All other destination markets 31,401 48,445 35,620 Total Canada exports 370,001 445,126 431,287 Share of value (percent) Canada's exports to the United States 49.0 44.3 44.8 Canada's exports to other major destination markets.-- Japan 10.4 12.6 14.5 China 8.1 9.7 10.2 Germany 8.6 8.2 7.9 Korea 3.9 5.7 5.0 France 6.7 4.5 3.2 Poland 2.7 2.8 2.4 Mexico 0.4 0.2 2.1 Italy 1.6 1.0 1.5 All other destination markets 8.5 10.9 8.3 Total Canada exports 100.0 100.0 100.0 Source: Official Canada exports statistics under HTS subheading 8483.50, as reported by Statistics Canada in the GTIS/GTA database, accessed September 10, 2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 182 of 218
VIIͲ7 THEINDUSTRYINCHINA Overview TheCommissionissuedforeignproducers’orexporters’questionnairestosixtyͲone firms,includingthirtyͲonefirmsidentifiedinthepetitions(includingrevisionstothepetitions) believedtoproduceand/orexportIMTDCsfromChina. 1314Useableresponsestothe Commission’squestionnairewerereceivedfromsevenfirms:HaiyangJingweidaGearingCo., Ltd.(“Jingweida”),HuadeTianjinMetalManufacture(“HuadeTianjin”),MartinSprocket&Gear (Shanghai)Co.,Ltd.(“MartinSprocketShanghai”),PowermachImport&ExportCo.Ltd.Sichuan (“Powermach”),ShanxiHuaxiangGroupCo.Ltd.(“ShanxiHuaxiang”),ShijiazhuangCAPTPower TransmissionCo.,Ltd.(“ShijiazhuangCAPT”),andYueqingBethelShaftCollarMfgCo("Yueqing Bethel").15 AccordingtoestimatesprovidedbyrespondingChineseproducersinquestionnaire responses,aggregatedataonIMTDCsproducedinChinaaccountedforapproximately*** percentofallproductionofIMTDCsinChina 16andapproximatelypercentofexportstothe UnitedStatesduring2015.Thesefirms’exportstotheUnitedStateswereequivalentto percentofU.S.importsofIMTDCsfromChinaduring2015asreportedinresponsestothe Commission’simporterquestionnaire.Thepetitionerbelievesthattheseresponses substantiallyunderstatetheactualChinesemarket,identifyingnineadditionalChinese producersthatfailedtoprovidetheCommissionwithquestionnaireresponses. 1718 TableVIIͲ5liststheChineseproducersofIMTDCsthatrespondedtotheCommission’s questionnaireandcertain2015summarydatareportedinresponsetoCommission questionnaires.
13Thesefirmswereidentifiedthroughareviewofinformationsubmittedinthepetitionsand containedinrecords. 14FirmsreportedproductionoflargeͲdiameterIMTDCstomatchCommerce’sscope.Forpurposesof determiningoverallplantcapacity,dataonoutͲofͲscopeitems(includingsmallͲdiameterIMTDCs) producedusingthesameequipmentandemployeeswerecollected. 15Aresponsewasreceivedfromoneotherfirm,ShenzhenInͲsailPrecisionPartsCo.,Ltd.butdata werenotinuseablecondition. 16Coveragewasbasedonthemarketsizeestimatedby. 17Thepetitionerindicatedthateightfirms(FuqingJiachengTradingCorp.Ltd.;HangzhouPowertrans Co.,Ltd.;XinguangTechnologyCo.LtdofSichuanProvince;YantaiHenryHardwareCo.,Ltd.;Zhejiang DongzingAutoPartsCo.,Ltd.;ChangzhouJulingFoundryCo.,Ltd.;TranͲAutoIndustriesCo.,Ltd.;and ChangzhouLiangjiuMechanicalManufacturing)participatedinCommerce’sproceedings.Onlyfourof thesefirmswereidentifiedbythepetitionerinitspetitionsaspossibleIMTDCproducers/exportersin China.ThepetitionerfurthernotedthatFuzhouMinYueMechanicalandElectricalCo.Ltd.participated intheCommission’spreliminaryphaseoftheinvestigationsbutdidnotprovidearesponsetothe Commission’squestionnaireinthefinalphase.Petitioner’sposthearingbrief,exh.1,p.26.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 183 of 218
VIIͲ8 Table VII-5 IMTDCs: Summary data on firms in China, 2015
Changesinoperations OnerespondingproducerinChinareportedinitsquestionnaireresponseinthefinal phaseoftheseinvestigationsthatithadexperiencedachangeinitsoperationsrelatedtothe productionofIMTDCssinceJanuary1,2013..Initsquestionnaireresponseinthe Commission’spreliminaryphaseoftheinvestigations,Baldorreported.
OperationsonIMTDCs TableVIIͲ6presentsinformationontheIMTDCoperationsoftheresponding producers/exportersinChina.Chinesecapacity,production,capacityutilization,inventories, andshipmentsincreasedfrom2013to2015,withproductionandshipmentspeakingin2014. Capacity(inpieces)washigherinthefirsthalfof2016thaninthecomparableperiodof2015 butproduction,capacityutilization(basedonpieces),andshipmentswerelowerduringthe firsthalfof2016comparedwiththefirsthalfof2015. 19
Table VII-6 IMTDCs: Data on the industry in China, 2013-15, January to June 2015, January to June 2016, and projected calendar years 2016 and 2017
HomemarketsalesaccountedforoftotalshipmentsbytheChineseproducersin 2015,decliningfrompercentoftotalshipmentsin2013.Homemarketsalesbyresponding Chineseproducersaccountedforpercentoftotalsalesduringthefirsthalfof2016.Export marketsotherthantheUnitedStatesaccountedforbetweenpercentandpercentof therespondingChineseproducers’totalshipmentssince2013.Othermajorexportmarkets identifiedbytheproducersinChinainclude. ExportsofIMTDCstotheUnitedStatesbytheproducersinChinadecreasedby*** percentfrompiecesin2013topiecesin2015,andwerepercentlowerat piecesinthefirsthalfof2016comparedwithpiecesinthefirsthalfof2015.Asashareof Chineseproducers’totalshipments,exportstotheUnitedStatesdecreasedfrompercentin
19ThepetitionerassertstheunderreportingofcapacityonthepartofPowermachandCAPT. Respondentdeniesthisallegation.Petitioner’sprehearingbrief,pp.43Ͳ44,Respondent’sposthearing brief,exh.1,p.1. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 184 of 218
VIIͲ9 2013topercentin2015,andwerepercentoftotalshipmentsduringthefirsthalfof 2016. 20
Alternativeproducts AsshownintableVIIͲ7,approximatelyofallreportedIMTDCproductiononshared equipmentbyrespondingChineseproducersissubjectmerchandise.Otherproductsreportedly producedinChinaonthesameequipmentasfinishedIMTDCsinclude. Table VII-7 IMTDCs: Chinese producers' overall capacity and production on the same (finishing) equipment as subject production for IMTDCs, 2013-15, January to June 2015, and January to June 2016
Exports GlobalTradeAtlas(“GTA”)dataforthevalueoftotalexportsfromChinabydestination marketfor2013to2015arepresentedintableVIIͲ8. 21Aspreviouslynoted,theseofficial exportsstatistics,whichcoveritemsexportedunderHSsubheading8483.50(“flywheelsand pulleys,includingpulleyblocks”),includenotonlytheinͲscopeIMTDCsbutalsoasubstantial amountofitemsthatarenotcoveredbythescopeoftheseinvestigations(e.g.,steel,plastic, andaluminumpulleys).InͲscopeIMTDCsmayalsobeexportedunderothersubheadings.The datapresentedintableVIIͲ8showthatChina’stopexportmarketfortheseproductsisthe UnitedStates,accountingfor18.5percentoftotalexportsfromChinaduring2015.Thenext twolargestdestinationmarketsforexportsofflywheelsandpulleysfromChinaareJapanand Germany,accountingfor16.5percentand8.0percentoftotalexportsfromChinain2015, respectively.
20RespondentarguesthatexportstothirdͲcountrymarketsroseasshipmentstotheUnitedStates declinedtoaccountforclaimsofexcessChinesecapacityarguedbythepetitioner.Respondent’s posthearingbrief,pp.13Ͳ14. 21Onlyvaluedataarepresentedbecausequantitydataarenotconsistentlyavailableforall destinationmarkets. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 185 of 218
VIIͲ10 Table VII-8 Flywheels and pulleys: China exports by destination markets, 2013-15 Item Calendar year 2013 2014 2015 Value (1,000 dollars) China's exports to the United States 53,912 55,374 51,106 China's exports to other major destination markets.-- Japan 46,391 50,288 45,616 Germany 12,604 14,909 22,087 Korea South 14,765 15,347 16,903 Spain 8,756 10,809 9,679 Netherlands 7,370 11,033 9,007 Italy 9,558 9,506 8,807 Mexico 5,964 6,643 6,414 United Kingdom 8,931 7,329 5,818 All other destination markets 121,923 108,774 100,387 Total China exports 290,174 290,011 275,823 Share of value (percent) China's exports to the United States 18.6 19.1 18.5 China's exports to other major destination markets.-- Japan 16.0 17.3 16.5 Germany 4.3 5.1 8.0 Korea South 5.1 5.3 6.1 Spain 3.0 3.7 3.5 Netherlands 2.5 3.8 3.3 Italy 3.3 3.3 3.2 Mexico 2.1 2.3 2.3 United Kingdom 3.1 2.5 2.1 All other destination markets 42.0 37.5 36.4 Total China exports 100.0 100.0 100.0 Source: Official China exports statistics under HTS subheading 8483.50, as reported by Statistics China in the GTIS/GTA database, accessed September 10, 2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 186 of 218
VIIͲ11 THECOMBINEDSUBJECTINDUSTRIES TableVIIͲ9presentsinformationontheIMTDCoperationsoftherespondingproducers andexportersinbothCanadaandChinacombinedfor2013Ͳ15,JanuaryͲJune2015,and JanuaryͲJune2016,aswellasprojectionsfor2016Ͳ17. Table VII-9 IMTDCs: Data on industry in subject countries, 2013-15, January to June 2015, and January to June 2016 and projection calendar years 2016 and 2017 Item Actual experience Projections Calendar year January to June Calendar year 2013 2014 2015 2015 2016 2016 2017 Quantity (1,000 pounds) Capacity 72,513 72,785 73,476 36,678 36,651 65,693 58,510 Production 53,205 59,794 56,237 24,677 27,262 51,789 47,355 Quantity (pieces) Capacity 4,549,125 4,560,219 4,651,946 2,295,336 2,309,543 4,149,952 3,704,722 Production 3,037,945 3,569,464 3,348,696 1,669,901 1,475,656 2,963,413 2,592,641 End-of-period inventories 985,407 1,005,513 961,179 985,026 891,973 937,041 773,429 Shipments: Home market shipments: Internal consumption/ transfers *** *** *** *** *** *** *** Commercial shipments *** *** *** *** *** *** *** Subtotal, home market shipments *** *** *** *** *** *** *** Export shipments to: United States 1,064,424 1,180,027 963,908 497,218 354,373 693,203 543,509 All other markets *** *** *** *** *** *** *** Total exports *** *** *** *** *** *** *** Total shipments 3,059,531 3,549,358 3,393,030 1,690,388 1,544,862 2,996,381 2,787,377 Ratios and shares (percent) Capacity utilization (based on pounds) 73.4 82.2 76.5 67.3 74.4 78.8 80.9 Capacity utilization (based on pieces) 66.8 78.3 72.0 72.8 63.9 71.4 70.0 Inventories/production 32.4 28.2 28.7 29.5 30.2 31.6 29.8 Inventories/total shipments 32.2 28.3 28.3 29.1 28.9 31.3 27.7 Share of shipments: Home market shipments: Internal consumption/ transfers *** *** *** *** *** *** *** Commercial shipments *** *** *** *** *** *** *** Subtotal, home market shipments *** *** *** *** *** *** *** Export shipments to: United States 34.8 33.2 28.4 29.4 22.9 23.1 19.5 All other markets *** *** *** *** *** *** *** Total exports *** *** *** *** *** *** *** Total shipments 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 187 of 218
VIIͲ12 U.S.IMPORTERS’INVENTORIES TableVIIͲ10presentsdataonU.S.importers’reportedinventoriesofIMTDCs.During 2015,CanadianandChineseinͲscopeIMTDCsaccountedforandpercent,respectively, ofallinventoriesofimportedlargediameterIMTDCsheldintheUnitedStates.Canadianand ChineseinͲscopeIMTDCinventoriesintheaggregatedeclinedfrom2013to2014,increasedin 2015,andwerehigherinJanuaryͲJune2016thaninthecomparableperiodin2015. Table VII-10 IMTDCs: U.S. importers' end-of-period inventories of imports by source, 2013-15, January to June 2015, and January to June 2016 Item Calendar year January to June 2013 2014 2015 2015 2016 Imports from Canada: Inventories (pieces) *** *** *** *** *** Ratio to U.S. imports (percent) *** *** *** *** *** Ratio to U.S. shipments of imports (percent) *** *** *** *** *** Ratio to total shipments of imports (percent) *** *** *** *** *** Imports from China: Inventories (pieces) *** *** *** *** *** Ratio to U.S. imports (percent) *** *** *** *** *** Ratio to U.S. shipments of imports (percent) *** *** *** *** *** Ratio to total shipments of imports (percent) *** *** *** *** *** Imports from subject sources: Inventories (pieces) 690,333 654,579 743,681 661,113 749,396 Ratio to U.S. imports (percent) 47.2 42.9 47.4 43.7 64.3 Ratio to U.S. shipments of imports (percent) 52.3 46.6 55.1 47.5 71.8 Ratio to total shipments of imports (percent) 47.8 42.4 50.0 43.2 62.8 Imports from nonsubject large diameter: Inventories (pieces) 176,354 147,331 105,798 128,361 146,045 Ratio to U.S. imports (percent) 27.7 22.6 16.7 20.0 21.1 Ratio to U.S. shipments of imports (percent) 30.5 25.0 18.8 22.8 23.9 Ratio to total shipments of imports (percent) 26.7 21.6 15.7 18.9 20.0 Imports from all sources large diameter: Inventories (pieces) 866,687 801,910 849,479 789,474 895,441 Ratio to U.S. imports (percent) 41.3 36.8 38.6 36.6 48.2 Ratio to U.S. shipments of imports (percent) 45.7 40.2 44.5 40.4 54.2 Ratio to total shipments of imports (percent) 41.2 36.0 39.3 35.7 46.6 Imports from all sources small diameter: Inventories (pieces) 1,036,124 909,715 812,555 854,732 900,288 Ratio to U.S. imports (percent) 39.2 32.1 28.3 29.9 28.4 Ratio to U.S. shipments of imports (percent) 40.9 35.2 31.8 33.0 35.3 Ratio to total shipments of imports (percent) 35.9 30.9 27.4 28.6 29.6 Imports from all sources all sizes: Inventories (pieces) 1,902,811 1,711,625 1,662,034 1,644,206 1,795,729 Ratio to U.S. imports (percent) 40.1 34.1 32.7 32.8 35.7 Ratio to U.S. shipments of imports (percent) 42.9 37.4 37.2 36.2 42.7 Ratio to total shipments of imports (percent) 38.1 33.1 32.4 31.6 36.1 Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 188 of 218
VIIͲ13 U.S.IMPORTERS’CURRENTORDERS TheCommissionrequestedimporterstoindicatewhethertheyhadimportedor arrangedfortheimportationofinͲscopeIMTDCsfordeliveryafterJune30,2016.Fifteenfirms reporteddataconcerningsuchimportsorarrangementsofimportsofIMTDCs,2ofwhich 22 reportedimportsfromCanadaand15ofwhichreportedsuchimportsfromChina.Data concerningU.S.importssubsequenttoJune30,2016arepresentedintableVIIͲ11.Thesedata showadeclineinarrangedU.S.importsfromCanadaandChinafromthethirdquarterof2016 tothesecondquarterof2017.TherearenoarrangedimportsfromCanadaexpectedafterthe fourthquarterof2016. Table VII-11 IMTDCs: Arranged imports, July 2016 through June 2017
DUMPINGINTHIRDͲCOUNTRYMARKETS TheCommissionaskedquestionnairerecipientstoidentifywhethertheproducts subjecttothisproceedinghavebeenthesubjectofanyotherimportreliefproceedingsinthe UnitedStatesorinanyothercountries.Nofirmsparticipatinginthisproceedinghaveidentified anyotherimportreliefproceedingsorordersintheUnitedStatesorinanyothercountrieswith regardtoIMTDCs.
INFORMATIONONNONSUBJECTCOUNTRIES GlobalproductionofIMTDCsisgeographicallydispersed,withproductioninmultiple countriesinEurope,LatinAmerica,andAsia.23Globalexportsbynonsubjectproducerstotaled $4.0billionin2015,downslightlyfrom$4.3billionin2013,althoughthesedataincludea substantialportionofnonsubjectproductssuchassteel,aluminum,andplasticpulleys(table VIIͲ12).
22***. 23CompiledfromdatasubmittedinresponsetoCommissionquestionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 189 of 218
VIIͲ14 Table VII-12 IMTDCs: Flywheels and pulleys: Global exports by destination markets, 2013-15 Item Calendar year 2013 2014 2015 Value (1,000 dollars) United States 408,439 1,155,746 1,152,645 Subject exporters.-- Canada 370,001 445,126 431,287 China 290,174 290,011 275,823 All subject exporters 660,175 735,138 707,110 All other major exporting countries.-- Germany 1,478,996 1,522,121 1,377,492 Japan 562,918 483,617 402,330 France 425,396 417,878 395,568 Italy 360,497 386,824 339,760 South Korea 200,457 228,369 245,526 Slovakia 135,554 158,036 159,335 Belgium 191,885 175,867 156,715 Czech Republic 86,387 91,576 119,395 Thailand 77,575 83,968 78,208 Poland 33,963 53,837 60,716 All other exporting countries. 768,497 760,581 647,493 Total global exports 5,390,738 6,253,556 5,842,294 Share of value (percent) United States 7.6 18.5 19.7 Subject exporters.-- Canada 6.9 7.1 7.4 China 5.4 4.6 4.7 All subject exporters 12.2 11.8 12.1 All other major exporting countries.-- Germany 27.4 24.3 23.6 Japan 10.4 7.7 6.9 France 7.9 6.7 6.8 Italy 6.7 6.2 5.8 South Korea 3.7 3.7 4.2 Slovakia 2.5 2.5 2.7 Belgium 3.6 2.8 2.7 Czech Republic 1.6 1.5 2.0 Thailand 1.4 1.3 1.3 Poland 0.6 0.9 1.0 All other exporting countries. 14.3 12.2 11.1 Total global exports 100.0 100.0 100.0 Note.--Includes nonsubject products such as steel, plastic, and aluminum pulleys. IMTDCs may also be exported under other subheadings. Source: Official exports statistics under HTS subheading 8483.50 as reported by various national statistical authorities in the IHS/GTA database, accessed September 10, 2016. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 190 of 218
VIIͲ15 Germanywastheleadingnonsubjectglobalexporter,with$1.4billionin2015exports. 24 Japanwasthesecondlargestexporter,with$402millioninexportsin2015, 25andFrancewas thethirdlargestexporter,with$396millioninexports.TheEUandMexicoarediscussedin moredetailbelow.
Mexico TheindustryinMexicoproducescastingsandfinishedsheaves.Firmsengagedin productioninMexicoincludethesubsidiariesofmultinationalfirmsaswellasMexicoͲbased firms.26MexicobasedfirmsincludemachiningͲonlyshops(e.g.Magonza),andintegratedfirms offeringbothfoundryandmachiningservices(e.g.FundiciónQualyandValcon).27***.28
24OfficialexportsstatisticsunderHTSsubheading8483.50asreportedbyvariousnationalstatistical authoritiesintheIHS/GTAdatabase,accessedSeptember10,2016.IMTDCsmayalsobeexportedunder othersubheadings. 25JapanesemanufacturersproducebothcastingsandfinishedIMTDCs.BusinessInformationin HiroshimaWebsite,http://www.hitec.city.hiroshima.jp/EE/ee00268.html;KinoshitaManufacturing CompanyWebsite,http://www.kinoshitaseisakusho.co.jp/en/profile/(accessedNovember10,2015); ProtechnologyWebsite,http://protechnology.jp/companies/partsͲmanufacturing/kinseiͲengineering (accessedNovember10,2015);TheLeadingJapanFoundriesCatalog,http://www.japanͲ foundries.com/TheͲLeadingͲJapanͲFoundriesͲCatalog.pdf(accessedNovember10,2015);JͲGoodTech Website,https://jgoodtech.smrj.go.jp/corporations/90?locale=en(accessedNovember9,2015). 26DirectoriodeExportadoresWebsite,http://www3.promexico.gob.mx(accessedNovember20, 2015);TBWWebsite,http://www.tbwoods.com/Company WorldWide Locations.asp(accessed November12,2015;MartinSprocketandGearWebsite, http://www.martinsprocket.com/locations/mexico(accessedNovember21,2015);Petitioners’ postconferencebrief,exh.1,p.53. 27Valconwebsite,http://valcon.com.mx/?lang=en(accessedOctober24,2016);Magonzawebsite, http://www.magonza.com.mx/(accessedOctober24,2016);andFundicionQualywebsite, http://www.qualy.com.mx/(accessedOctober24,2016). 28***. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 191 of 218
VIIͲ16 EuropeanUnion TheEUhassubstantialsheavemanufacturing,withEUͲ28productionofflywheelsand pulleys—includingnonsubjectproducts—totaling86,800metrictons(95,700shorttons)in 2015,upslightlyfrom85,400metrictons(94,100shorttons)in2013.ThevalueofEU production(excludinggoodsretainedforinternaluse)totaled$568millionin2015,with Germany($225million),Slovakia($171million),andFrance($62million)combinedaccounting foramajorityofEUproduction. 29TheEUindustryproducesvarioustypesofsubjectproducts, suchasVͲbeltsheaves,synchronousdrives,adjustablespeeddrives,andflywheels,andhas productioncapabilitiesrangingfromlessthan10inchesindiametertomorethan100inches. 30
29FormanyEUmemberstates,reportedexportsexceededreportedproductionin2015.Eurostat database,http://ec.europa.eu/eurostat/data/database(accessedSeptember2,2016);andBoardof GovernorsoftheFederalReserveSystemWebsite,HistoricalRatesfortheEUEuro, http://www.federalreserve.gov/releases/h10/hist/dat00 eu.htm(accessedSeptember2,2016). 30GeorgeTaylorandCo.Website,http://www.gtham.co.uk(accessedSeptember6,2016);Profil IndustrieWebsite,http://www.profilindustrie.com(accessedSeptember6,2016);PTPIndustryWebsite, http://www.ptpindustry.com(accessedSeptember6,2016);WaltherFlenderGroupWebsite, http://waltherͲflenderͲgruppe.de(accessedSeptember7,2016). Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 192 of 218
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APPENDIXA FEDERALREGISTERNOTICES
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TheCommissionmakesavailablenoticesrelevanttoitsinvestigationsandreviewsonits website,www.usitc.gov.Inaddition,thefollowingtabulationpresents,inchronologicalorder, FederalRegisternoticesissuedbytheCommissionandCommerceduringthecurrent proceeding. Citation Title Link 80FR67789, November3,2015 CertainIronMechanicalTransfer DriveComponentsFromCanadaand China;InstitutionofAntidumpingand CountervailingDutyInvestigations andSchedulingofPreliminaryPhase Investigations http://www.gpo.gov/fdsys/pkg/FRͲ 2015Ͳ11Ͳ03/pdf/2015Ͳ27956.pdf 80FR73716, November25,2015 CertainIronMechanicalTransfer DriveComponentsfromCanadaand ThePeople’sRepublicofChina: InitiationofLessͲThanͲFairͲValue Investigations http://www.gpo.gov/fdsys/pkg/FRͲ 2015Ͳ11Ͳ25/pdf/2015Ͳ29985.pdf 80FR73722, November25,2015 CertainIronMechanicalTransfer DriveComponentsFromthePeople’s RepublicofChina:Initiationof CountervailingDutyInvestigation http://www.gpo.gov/fdsys/pkg/FRͲ 2015Ͳ11Ͳ25/pdf/2015Ͳ29945.pdf 80FR79095 December18,2015 CertainIronMechanicalTransfer DriveComponentsFromCanadaand ChinaDeterminations https://www.gpo.gov/fdsys/pkg/FRͲ 2015Ͳ12Ͳ18/pdf/2015Ͳ31779.pdf 81FR21316 April11,2016 CountervailingDutyInvestigationof CertainIronMechanicalTransfer DriveComponentsFromthePeople’s RepublicofChina:Preliminary AffirmativeDeterminationand AlignmentofFinalDetermination WithFinalAntidumpingDuty Determination https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ04Ͳ11/pdf/2016Ͳ08235.pdf Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 195 of 218
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Citation Title Link 81FR36876 June8,2016 CertainIronMechanicalTransfer DriveComponentsFromthePeople’s RepublicofChina:Preliminary DeterminationofSalesatLessThan FairValueandPostponementofFinal Determination https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ06Ͳ08/pdf/2016Ͳ13533.pdf 81FR36887 June8,2016 CertainIronMechanicalTransfer DriveComponentsFromCanada: AffirmativePreliminary DeterminationofSalesatLessThan FairValueandPostponementofFinal Determination https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ06Ͳ08/pdf/2016Ͳ13535.pdf 81FR41348 June24,2016 IronMechanicalTransferDrive ComponentsFromCanadaandChina; SchedulingoftheFinalPhaseof CountervailingDutyandAntidumping DutyInvestigations https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ06Ͳ24/pdf/2016Ͳ14977.pdf 81FR75032 October28,2016 CertainIronMechanicalTransfer DriveComponentsFromthePeople’s RepublicofChina:FinalAffirmative DeterminationofSalesatLessThan FairValue https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ10Ͳ28/pdf/2016Ͳ26104.pdf 81FR75037 October28,2016 CountervailingDutyInvestigationof CertainIronMechanicalTransfer DriveComponentsFromthePeople’s RepublicofChina:FinalAffirmative Determination https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ10Ͳ28/pdf/2016Ͳ26105.pdf 81FR75039 October28,2016 CertainIronMechanicalTransfer DriveComponentsFromCanada: FinalAffirmativeDeterminationof SalesatLessThanFairValue https://www.gpo.gov/fdsys/pkg/FRͲ 2016Ͳ10Ͳ28/pdf/2016Ͳ26106.pdf
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APPENDIXB HEARINGWITNESSES
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BͲ3 CALENDAR OF PUBLIC HEARING Those listed below appeared as witnesses at the United States International Trade Commission’s hearing: Subject: Iron Mechanical Transfer Drive Components from Canada and China Inv. Nos.: 701-TA-550 and 731-TA-1304-1305 (Final) Date and Time: October 18, 2016 - 9:30 am Sessions were held in connection with these investigations in the Main Hearing Room (Room 101), 500 E Street, S.W., Washington, DC. OPENING REMARKS: Petitioner (Daniel B. Pickard, Wiley Rein LLP) Respondents (Jeffrey S. Grimson, Mowry & Grimson, PLLC) In Support of the Imposition of Antidumping and Countervailing Duty Orders: Wiley Rein LLP Washington, DC on behalf of TB Wood’s Incorporated Carl R. Christenson, Chairman and Chief Executive Officer, Altra Industrial Motion Corp. Holly M. Shields, Group Controller, Couplings, Clutches & Brakes Division, Altra Industrial Motion Corp. Lew Crist, General Manager, TB Wood’s Incorporated William R. Juergens, Commercial Castings Sale Manager, TB Wood’s Incorporated Daniel B. Pickard ) Robert E. DeFrancesco ) – OF COUNSEL Stephanie M. Bell ) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 199 of 218
BͲ4 In Opposition to the Imposition of Antidumping and Countervailing Duty Orders: Mowry & Grimson, PLLC Washington, DC on behalf of The China Chamber of Commerce of International Commerce’s ad hoc Coalition of Producers and Exporters of Certain Iron Mechanical Transfer Drive Components from the People’s Republic of China; Powermach Import & Export Co., Ltd. (Sichuan); Shijiazhuang CAPT Power Transmission Co., Ltd.; and Yueqing Bethel Shaft Collar Manufacturing Co., Ltd. Jeffrey S. Grimson ) Jill A. Cramer ) – OF COUNSEL Yuzhe PengLing ) CLOSING REMARKS/REBUTTAL: Petitioner (Daniel B. Pickard, Wiley Rein LLP) Respondents (Jeffrey S. Grimson, Mowry & Grimson, PLLC) Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 200 of 218
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APPENDIXC SUMMARYDATA
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Table C-1 IMTDCs: Summary data concerning the U.S. market, 2013-15, January to June 2015, and January to June 2016 Jan-Jun 2013 2014 2015 2015 2016 2013-15 2013-14 2014-15 2015-16 U.S. consumption quantity: Amount................................................................................ *** *** *** *** *** *** *** *** *** Producers' share (fn1).......................................................... *** *** *** *** *** *** *** *** *** Importers' share (fn1): Canada............................................................................. *** *** *** *** *** *** *** *** *** China................................................................................ *** *** *** *** *** *** *** *** *** Subject sources.............................................................. *** *** *** *** *** *** *** *** *** Nonsubject sources large diameter................................. *** *** *** *** *** *** *** *** *** Nonsubject sources small diameter................................ *** *** *** *** *** *** *** *** *** Nonsubject sources of all sizes.................................... *** *** *** *** *** *** *** *** *** All sources all sizes.................................................. *** *** *** *** *** *** *** *** *** U.S. consumption value: Amount................................................................................ *** *** *** *** *** *** *** *** *** Producers' share (fn1).......................................................... *** *** *** *** *** *** *** *** *** Importers' share (fn1): Canada............................................................................. *** *** *** *** *** *** *** *** *** China................................................................................ *** *** *** *** *** *** *** *** *** Subject sources.............................................................. *** *** *** *** *** *** *** *** *** Nonsubject sources large diameter................................. *** *** *** *** *** *** *** *** *** Nonsubject sources small diameter................................ *** *** *** *** *** *** *** *** *** Nonsubject sources of all sizes.................................... *** *** *** *** *** *** *** *** *** All sources all sizes.................................................. *** *** *** *** *** *** *** *** *** U.S. importers' U.S. shipments of imports from.-- Canada: Quantity............................................................................ *** *** *** *** *** *** *** *** *** Value................................................................................ *** *** *** *** *** *** *** *** *** Unit value.......................................................................... *** *** *** *** *** *** *** *** *** Ending inventory quantity.................................................. *** *** *** *** *** *** *** *** *** China: Quantity............................................................................ *** *** *** *** *** *** *** *** *** Value................................................................................ *** *** *** *** *** *** *** *** *** Unit value.......................................................................... *** *** *** *** *** *** *** *** *** Ending inventory quantity.................................................. *** *** *** *** *** *** *** *** *** Subject sources: Quantity............................................................................ 1,319,110 1,405,280 1,349,482 695,379 521,554 2.3 6.5 (4.0) (25.0) Value................................................................................ 42,171 44,129 40,231 21,036 15,612 (4.6) 4.6 (8.8) (25.8) Unit value.......................................................................... $31.97 $31.40 $29.81 $30.25 $29.93 (6.7) (1.8) (5.1) (1.0) Ending inventory quantity.................................................. 690,333 654,579 743,681 661,113 749,396 7.7 (5.2) 13.6 13.4 Nonsubject sources large diameter: Quantity............................................................................ 578,694 588,300 561,421 281,534 305,140 (3.0) 1.7 (4.6) 8.4 Value................................................................................ 28,290 27,518 26,430 13,170 13,191 (6.6) (2.7) (4.0) 0.2 Unit value.......................................................................... $48.89 $46.78 $47.08 $46.78 $43.23 (3.7) (4.3) 0.6 (7.6) Ending inventory quantity.................................................. 176,354 147,331 105,798 128,361 146,045 (40.0) (16.5) (28.2) 13.8 Nonsubject sources small diameter: Quantity............................................................................ 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258 0.7 1.9 (1.1) (1.6) Value................................................................................ 33,645 39,695 25,623 12,964 12,107 (23.8) 18.0 (35.4) (6.6) Unit value.......................................................................... $13.26 $15.36 $10.03 $10.00 $9.49 (24.4) 15.8 (34.7) (5.1) Ending inventory quantity.................................................. 866,687 801,910 849,479 789,474 895,441 (2.0) (7.5) 5.9 13.4 Nonsubject sources of all sizes: Quantity............................................................................ 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398 0.1 1.8 (1.7) 0.2 Value................................................................................ 61,934 67,213 52,053 26,135 25,298 (16.0) 8.5 (22.6) (3.2) Unit value.......................................................................... $19.88 $21.19 $16.70 $16.56 $16.00 (16.0) 6.6 (21.2) (3.4) Ending inventory quantity.................................................. 1,036,124 909,715 812,555 854,732 900,288 (21.6) (12.2) (10.7) 5.3 All sources all sizes: Quantity............................................................................ 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952 0.7 3.2 (2.4) (7.5) Value................................................................................ 104,105 111,342 92,284 47,170 40,910 (11.4) 7.0 (17.1) (13.3) Unit value.......................................................................... $23.48 $24.32 $20.66 $20.75 $19.45 (12.0) 3.6 (15.1) (6.2) Ending inventory quantity.................................................. 1,902,811 1,711,625 1,662,034 1,644,206 1,795,729 (12.7) (10.0) (2.9) 9.2 U.S. producers': Average capacity quantity.................................................... *** *** *** *** *** *** *** *** *** Production quantity.............................................................. *** *** *** *** *** *** *** *** *** Capacity utilization (fn1)....................................................... *** *** *** *** *** *** *** *** *** U.S. shipments: Quantity............................................................................ *** *** *** *** *** *** *** *** *** Value................................................................................ *** *** *** *** *** *** *** *** *** Unit value (fn3)................................................................. *** *** *** *** *** *** *** *** *** Export shipments: Quantity............................................................................ *** *** *** *** *** *** *** *** *** Value................................................................................ *** *** *** *** *** *** *** *** *** Unit value.......................................................................... *** *** *** *** *** *** *** *** *** Ending inventory quantity..................................................... *** *** *** *** *** *** *** *** *** Inventories/total shipments (fn1) (fn4).................................. *** *** *** *** *** *** *** *** *** Production workers.............................................................. *** *** *** *** *** *** *** *** *** Hours worked (1,000s)......................................................... *** *** *** *** *** *** *** *** *** Wages paid ($1,000)............................................................ *** *** *** *** *** *** *** *** *** Hourly wages (dollars).......................................................... *** *** *** *** *** *** *** *** *** Productivity (pieces per 1,000 hours).................................... *** *** *** *** *** *** *** *** *** Unit labor costs.................................................................... *** *** *** *** *** *** *** *** *** Net sales: Quantity............................................................................ *** *** *** *** *** *** *** *** *** Value................................................................................ *** *** *** *** *** *** *** *** *** Unit value.......................................................................... *** *** *** *** *** *** *** *** *** Cost of goods sold (COGS).................................................. *** *** *** *** *** *** *** *** *** Gross profit or (loss)............................................................ *** *** *** *** *** *** *** *** *** SG&A expenses................................................................... *** *** *** *** *** *** *** *** *** Operating income or (loss)................................................... *** *** *** *** *** *** *** *** *** Net income or (loss)............................................................. *** *** *** *** *** *** *** *** *** Capital expenditures............................................................. *** *** *** *** *** *** *** *** *** Unit COGS........................................................................... *** *** *** *** *** *** *** *** *** Unit SG&A expenses............................................................ *** *** *** *** *** *** *** *** *** Unit operating income or (loss)............................................. *** *** *** *** *** *** *** *** *** Unit net income or (loss)...................................................... *** *** *** *** *** *** *** *** *** COGS/sales (fn1)................................................................. *** *** *** *** *** *** *** *** *** Operating income or (loss)/sales (fn1).................................. *** *** *** *** *** *** *** *** *** Net income or (loss)/sales (fn1)............................................ *** *** *** *** *** *** *** *** *** Notes: fn1.--Reported data are in percent and period changes are in percentage points. *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. C-3 Period changes (Quantity=pieces; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per piece; Period changes=percent--exceptions noted) Calendar year Calendar year Reported data January to June Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 203 of 218
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ThetradeandemploymentdatareportedbyWaupacaarepresentedintableCͲ2. Waupaca’sreporteddataconcerningoverallcapacityandproductiononthesameequipment asIMTDCsarepresentedintableCͲ3.
Table C-2 IMTDCs: U.S. capacity, production, capacity utilization, shipments, and employment data reported by Waupaca, 2013-15, January to June 2015, and January to June 2016
Table C-3 IMTDCs: Waupaca’s reported overall U.S. capacity and production on the same equipment as IMTDC production, 2013-15, January to June 2015, and January to June 2016
TheresultsofoperationsonIMTDCsbyWaupacaarepresentedintableCͲ4andthe firm’sreportedassets,capitalexpenditures,andR&DexpensesarepresentedintableCͲ5.
Table C-4 IMTDCs: Results of casting operations of Waupaca, 2013-15, January-June 2015, and January- June 2016
Table C-5 IMTDCs: Assets, capital expenditures, and R&D expenses reported by Waupaca, 2013-15, January-June 2015, and January-June 2016
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APPENDIXD
NONSUBJECTCOUNTRYPRICEDATA
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TwoimportersreportedpricedataforMexicoforproducts1Ͳ6.Pricedatareportedby thesefirmsaccountedfor0.7percentofU.S.commercialshipmentsofIMTDCsfromMexico. ThesepriceitemsandaccompanyingdataarecomparabletothosepresentedintablesVͲ3to VͲ8.PriceandquantitydataforMexicoareshownintablesDͲ1toDͲ6andinfigureDͲ1toDͲ6 (withdomesticandsubjectsources). Table D-1 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 1, by quarters, January 2013-June 2016
Table D-2 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 2, by quarters, January 2013-June 2016
Table D-3 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 3, by quarters, January 2013-June 2016
Table D-4 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 4, by quarters, January 2013-June 2016
Table D-5 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 5, by quarters, January 2013-June 2016
Table D-6 IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 6, by quarters, January 2013-June 2016
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Figure D-1a IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to distributors, by quarters, January 2013-June 2016
Figure D-1b IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to end users, by quarters, January 2013-June 2016
Figure D-2a IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to distributors, by quarters, January 2013-June 2016
Figure D-2b IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to end users, by quarters, January 2013-June 2016
Figure D-3a IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to distributors, by quarters, January 2013-June 2016
Figure D-3b IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to end users, by quarters, January 2013-June 2016
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DͲ5
Figure D-4a IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to distributors, by quarters, January 2013-June 2016
Figure D-4b IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to end users, by quarters, January 2013-June 2016
Figure D-5a IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to distributors, by quarters, January 2013-June 2016
Figure D-5b IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to end users, by quarters, January 2013-June 2016
Figure D-6a IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to distributors, by quarters, January 2013-June 2016
Figure D-6b IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to end users, by quarters, January 2013-June 2016
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DͲ6
IncomparingnonsubjectcountrypricingdatawithU.S.producerpricingdata,pricesfor productimportedfromMexicowerelowerthanpricesforU.S.Ͳproducedproductin71 instancesandhigherin48instances.Incomparingnonsubjectcountrypricingdatawith Canadianpricingdata,pricesforproductimportedfromMexicowerelowerthanpricesfor productimportedfromCanadain12instancesandhigherin59instances.Incomparing nonsubjectcountrypricingdatawithsubjectChinesepricingdata,pricesforproductimported fromMexicowerelowerthanpricesforproductimportedfromChinain11instancesand higherin104instances.AsummaryofpricedifferentialsispresentedintableDͲ7. Table D-7 IMTDCs: Summary of price differentials, by country, January 2013-June 2016 Comparison Total number of comparisons Nonsubject priced lower Nonsubject priced higher Number of quarters Quantity (pieces) Number of quarters Quantity (pieces) Nonsubject vs United States.-- Mexico vs. United States 119 71 463 48 260 Nonsubject vs Subject.-- Mexico vs. Canada 71 12 84 59 288 Mexico vs. China 115 11 93 104 615 Source: Compiled from data submitted in response to Commission questionnaires. Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 210 of 218
EͲ1APPENDIXE SELECTEDFINANCIALRESULTSOFU.S.PRODUCERS Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 211 of 218
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EͲ3ThisappendixpresentedfirmͲbyͲfirmdataforU.S.producersontheiroperationson IMTDCs.TableEͲ1presentsdataforthefivefirmsreportingintegratedcastingandfinishing operations.Thesefivefirmsare:Bremen,EnDyn,Goldens’Foundry,MartinSprocket,andTBW. TBW’sU.S.integratedcastingandfinishingoperationsanditsfinishingoperationsinMexico basedoncastingsmadeintheUnitedStatesarebothincludedintableEͲ1.ThedataintableEͲ1 correspondtothoseintableVIͲ3.TableEͲ2presentsdataforthefivefirmsreportingstandͲ alonefinishingoperationsbasedonpurchasedcastings.Thesefirmsare:B&B,Baldor,HiͲLo, Maurey,andSterling.Inaddition,thefinishingoperationsof***areincludedinthisdataset. ThedataintableEͲ2correspondtothoseintableVIͲ5.TablesEͲ1andEͲ2areconfidentialin theirentirety. Table E-1 IMTDCs: Selected results of operations of U.S. producers with integrated casting and finishing operations, fiscal years 2013-15, January-June 2015, and January-June 2016
Table E-2 IMTDCs: Selected results of U.S. producers on their finishing operations only, fiscal years 2013- 15, January-June 2015, and January-June 2016
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FͲ1APPENDIXF ALLEGEDEFFECTSOFSUBJECTIMPORTSONU.S.PRODUCERS’ EXISTINGDEVELOPMENTANDPRODUCTIONEFFORTS, GROWTH,INVESTMENT,ANDABILITYTORAISECAPITAL
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15 printed pages contain little extracted OCR body text; searchable legal-body completeness has not been established for those pages.
OCR transcription for search; preserved printed pages are authoritative
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 1 of 218
Certain Iron Mechanical Transfer Drive
Components from Canada and China
Investigation Nos. 701-TA-550 and 731-TA-1304-1305 (Final)
Publication 4652 December 2016
U.S. International Trade Commission
Washington, DC 20436
U.S. International Trade Commission
COMMISSIONERS
Irving A. Williamson, Chairman
David S. Johanson, Vice Chairman
Dean A. Pinkert
Meredith M. Broadbent
F. Scott Kieff
Rhonda K. Schmidtlein
Catherine DeFilippo
Staff assigned
Address all communications to
Secretary to the Commission
United States International Trade Commission
Washington, DC 20436
Director of Operations
Mary Messer, Investigator
Amelia Shister, Investigative Intern
Andrew David, Industry Analyst
Dan Kim, Industry Analyst
Cindy Cohen, Economist
Charles Yost, Accountant
Russell Duncan, Statistician
Mary Jane Alves, Attorney
Brian Soiset, Attorney
Douglas Corkran, Supervisory Investigator
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 2 of 218
U.S. International Trade Commission
Washington, DC 20436
www.usitc.gov
Publication 4652 December 2016
Certain Iron Mechanical Transfer Drive
Components from Canada and China
Investigation Nos. 701-TA-550 and 731-TA-1304-1305 (Final)
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 3 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 4 of 218
CONTENTS
Page
i
Determinations.......................................................................................................................1
ViewsoftheCommission........................................................................................................3
PartI:Introduction................................................................................................................IͲ1
Background................................................................................................................................IͲ1
Statutorycriteriaandorganizationofthereport.....................................................................IͲ2
Statutorycriteria...................................................................................................................IͲ2
Organizationofreport...........................................................................................................IͲ3
Marketsummary.......................................................................................................................IͲ3
Summarydataanddatasources...............................................................................................IͲ5
Previousandrelatedinvestigations..........................................................................................IͲ6
NatureandextentofsubsidiesandsalesatLTFV....................................................................IͲ6
Subsidies................................................................................................................................IͲ6
SalesatLTFV........................................................................................................................IͲ10
Thesubjectmerchandise........................................................................................................IͲ12
Commerce’sscope..............................................................................................................IͲ12
Tarifftreatment...................................................................................................................IͲ16
Theproduct.............................................................................................................................IͲ17
Descriptionandapplications...............................................................................................IͲ17
Manufacturingprocesses....................................................................................................IͲ31
Domesticlikeproductissues...................................................................................................IͲ38
Summaryoffindingsfrompreliminaryphase.....................................................................IͲ38
Partyarguments..................................................................................................................IͲ40
PartII:ConditionsofcompetitionintheU.S.market............................................................IIͲ1
U.S.marketcharacteristics.......................................................................................................IIͲ1
U.S.purchasers.........................................................................................................................IIͲ1
Channelsofdistribution...........................................................................................................IIͲ2
Geographicdistribution...........................................................................................................IIͲ3
Supplyanddemandconsiderations.........................................................................................IIͲ4
U.S.supply............................................................................................................................IIͲ4
U.S.demand.........................................................................................................................IIͲ7
Substitutabilityissues.............................................................................................................IIͲ10
Leadtimes..........................................................................................................................IIͲ10
Knowledgeofcountrysources...........................................................................................IIͲ10
Factorsaffectingpurchasingdecisions...............................................................................IIͲ11
Comparisonsofdomesticproducts,subjectimports,andnonsubjectimports................IIͲ14
ComparisonofU.S.ͲproducedandimportedlargeͲdiameterIMTDCs...............................IIͲ16
Elasticityestimates.................................................................................................................IIͲ18
U.S.supplyelasticity...........................................................................................................IIͲ18
U.S.demandelasticity........................................................................................................IIͲ18
Substitutionelasticity.........................................................................................................IIͲ19
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CONTENTS
Page
ii
PartIII:U.S.producers’production,shipments,andemployment.......................................IIIͲ1
U.S.producers.........................................................................................................................IIIͲ1
Relatedand/oraffiliatedfirms............................................................................................IIIͲ3
Changesinoperations.........................................................................................................IIIͲ4
ProductionͲrelatedactivities...................................................................................................IIIͲ4
Capitalinvestments.............................................................................................................IIIͲ5
Technicalexpertise..............................................................................................................IIIͲ5
Valueadded.........................................................................................................................IIIͲ6
Employmentlevels..............................................................................................................IIIͲ6
Sourcingofparts..................................................................................................................IIIͲ7
Othercostsandactivities....................................................................................................IIIͲ7
U.S.production,capacity,andcapacityutilization.................................................................IIIͲ8
Alternativeproducts............................................................................................................IIIͲ8
U.S.producers’U.S.shipmentsandexports...........................................................................IIIͲ9
TotalU.S.shipmentsofIMTDCs..........................................................................................IIIͲ9
FinishedIMTDCs................................................................................................................IIIͲ10
UnfinishedIMTDCs(notfurtherfinishedbyfirmintheUnitedStates)...........................IIIͲ11
U.S.producers’inventories...................................................................................................IIIͲ11
U.S.producers’imports.........................................................................................................IIIͲ11
U.S.employment,wages,andproductivity..........................................................................IIIͲ12
PartIV:U.S.imports,apparentU.S.consumption,andmarketshares................................IVͲ1
U.S.importers..........................................................................................................................IVͲ1
U.S.imports.............................................................................................................................IVͲ3
U.S.importsfromsubjectandnonsubjectsources............................................................IVͲ3
Negligibleimports...............................................................................................................IVͲ9
Cumulation........................................................................................................................IVͲ10
ApparentU.S.consumptionandmarketshares...................................................................IVͲ12
ApparentU.S.consumption..............................................................................................IVͲ12
U.S.marketshares.............................................................................................................IVͲ13
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CONTENTS
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iii
PartV:Pricingdata...............................................................................................................VͲ1
Factorsaffectingprices............................................................................................................VͲ1
Rawmaterialandenergycosts............................................................................................VͲ1
TransportationcoststotheU.S.market..............................................................................VͲ3
U.S.inlandtransportationcosts...........................................................................................VͲ3
Pricingpractices.......................................................................................................................VͲ3
Pricingmethods....................................................................................................................VͲ3
Salestermsanddiscounts....................................................................................................VͲ5
Priceleadership....................................................................................................................VͲ5
Pricedata..................................................................................................................................VͲ6
Pricetrends...........................................................................................................................VͲ9
Pricecomparisons..............................................................................................................VͲ10
Lostsalesandlostrevenue....................................................................................................VͲ11
PartVI:FinancialexperienceofU.S.producers....................................................................VIͲ1
Background..............................................................................................................................VIͲ1
OperationsonIMTDCs............................................................................................................VIͲ1
Netsales..............................................................................................................................VIͲ3
Costsandexpenses.............................................................................................................VIͲ3
Profitability..........................................................................................................................VIͲ3
Varianceanalysis.................................................................................................................VIͲ4
Capitalexpendituresandresearchanddevelopmentexpenses............................................VIͲ5
Assetsandreturnoninvestment............................................................................................VIͲ5
Capitalandinvestment...........................................................................................................VIͲ6
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 7 of 218
CONTENTS
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iv
PartVII:Threatconsiderationsandinformationonnonsubjectcountries..........................VIIͲ1
TheindustryinCanada...........................................................................................................VIIͲ3
Overview.............................................................................................................................VIIͲ3
Changesinoperations........................................................................................................VIIͲ4
OperationsonIMTDCs.......................................................................................................VIIͲ4
Alternativeproducts...........................................................................................................VIIͲ5
Exports................................................................................................................................VIIͲ5
TheindustryinChina..............................................................................................................VIIͲ7
Overview.............................................................................................................................VIIͲ7
Changesinoperations........................................................................................................VIIͲ8
OperationsonIMTDCs.......................................................................................................VIIͲ8
Alternativeproducts...........................................................................................................VIIͲ9
Exports................................................................................................................................VIIͲ9
Thecombinedsubjectindustries.........................................................................................VIIͲ11
U.S.importers’inventories..................................................................................................VIIͲ12
U.S.importers’currentorders.............................................................................................VIIͲ13
DumpinginthirdͲcountrymarkets.......................................................................................VIIͲ13
Informationonnonsubjectcountries..................................................................................VIIͲ13
Mexico..............................................................................................................................VIIͲ15
EuropeanUnion................................................................................................................VIIͲ16
Appendixes
A.FederalRegisternotices................................................................................................. AͲ1
B.Hearingwitnesses........................................................................................................... BͲ1
C. Summarydata................................................................................................................ CͲ1
D.Nonsubjectcountrypricedata....................................................................................... DͲ1
E. SelectedfinancialresultsofU.S.producers................................................................... EͲ1
F. AllegedeffectsofsubjectimportsonU.S.producers’existingdevelopmentand
productionefforts,growth,investment,andabilitytoraisecapital............................. FͲ1
Note.—Informationthatwouldrevealconfidentialoperationsofindividualconcernsmaynot
bepublishedandthereforehasbeendeletedfromthisreport.Suchdeletionsareindicatedby
asterisks.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 8 of 218
UNITEDSTATESINTERNATIONALTRADECOMMISSION
InvestigationNos.701ͲTAͲ550and731ͲTAͲ1304Ͳ1305(Final)
CertainIronMechanicalTransferDriveComponentsfromCanadaandChina
DETERMINATIONS
Onthebasisoftherecord1 developedinthesubjectinvestigations,theUnitedStates
InternationalTradeCommission(“Commission”)determines,pursuanttotheTariffActof1930
(“theAct”),thatanindustryintheUnitedStatesisnotmateriallyinjuredorthreatenedwith
materialinjury,andtheestablishmentofanindustryintheUnitedStatesisnotmaterially
retardedbyreasonofimportsofcertainironmechanicaltransferdrivecomponentsfrom
CanadaandChina,providedforinsubheadings8483.30.80,8483.50.60,8483.50.90,
8483.90.30,and8483.90.80oftheHarmonizedTariffScheduleoftheUnitedStates,2 thathave
beenfoundbytheDepartmentofCommerce(“Commerce”)tobesoldintheUnitedStatesat
lessthanfairvalue(“LTFV”),andthathavebeenfoundbyCommercetobesubsidizedbythe
governmentofChina. 3
BACKGROUND
TheCommission,pursuanttosections705(b)and735(b)oftheAct(19U.S.C.1671d(b)
and19U.S.C.1673d(b)),institutedtheseinvestigationseffectiveOctober28,2015,following
receiptofpetitionsfiledwiththeCommissionandCommercebyTBWood’sIncorporated,
Chambersburg,Pennsylvania.Thefinalphaseoftheinvestigationswasscheduledbythe
CommissionfollowingnotificationofpreliminarydeterminationsbyCommercethatimportsof
certainironmechanicaltransferdrivecomponentsfromChinaweresubsidizedwithinthe
meaningofsection703(b)oftheAct(19U.S.C.1671b(b))andimportsofcertainiron
mechanicaltransferdrivecomponentsfromCanadaandChinaweredumpedwithinthe
meaningof733(b)oftheAct(19U.S.C.1673b(b)).Noticeoftheschedulingofthefinalphaseof
theCommission’sinvestigationsandofapublichearingtobeheldinconnectiontherewithwas
givenbypostingcopiesofthenoticeintheOfficeoftheSecretary,U.S.InternationalTrade
Commission,Washington,DC,andbypublishingthenoticeintheFederalRegisteronJune24,
2016(81FR41348).ThehearingwasheldinWashington,DC,onOctober18,2016,andall
personswhorequestedtheopportunitywerepermittedtoappearinpersonorbycounsel.
1 Therecordisdefinedinsec.207.2(f)oftheCommission’sRulesofPracticeandProcedure
(19CFR207.2(f)).
2 CoveredmerchandisemayalsoenterunderthefollowingHTSUSsubheadings:7325.10.00,
7325.99.10,7326.19.00,8431.31.00,8431.39.00,and8483.50.40.
3 AllsixCommissionersvotedinthenegative.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 9 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 10 of 218
3
ViewsoftheCommission
Basedontherecordinthefinalphaseoftheseinvestigations,wedeterminethatan
industryintheUnitedStatesisnotmateriallyinjuredorthreatenedwithmaterialinjuryby
reasonofimportsofcertainlargeͲdiameterironmechanicaltransferdrivecomponents
(“IMTDCs”)fromCanadaandChinafoundbytheU.S.DepartmentofCommerce
(“Commerce”)tobesoldintheUnitedStatesatlessthanfairvalueandsubsidizedbythe
governmentofChina.
I. Background
A. FirmsInvolvedinInvestigations
TBWood’sIncorporated(“TBW”or“petitioner”),aU.S.producerofIMTDCs,filed
theantidumpingandcountervailingdutypetitionsintheseinvestigationson
October28,2015. 1Petitionerappearedatthehearingwithcounselandsubmitted
prehearingandposthearingbriefs.BaldorElectricCompany(“Baldor”),aU.S.producerof
certainfinishedIMTDCs,submittedaprehearingstatementinsupportofthepetitions. 2
MartinSprocket&Gear,Inc.(“MartinSprocket”),aU.S.producerofIMTDCs,alsosubmitted
awrittenstatementsupportingthepetitions.
Severalrespondententitiesparticipatinginthefinalphaseoftheseinvestigations
formedacoalition,theChinaChamberofInternationalCommerceadhocCoalitionof
ProducersandExportersofCertainIronMechanicalTransferDriveComponentsfromthe
People’sRepublicofChina.Thecoalition’smembersincludedPowermachImport&
ExportCo.,Ltd.(Sichuan)(“Powermach”),ShijiazhuangCAPTPowerTransmissionCo.,Ltd.
(“ShijiazhuangCAPT”),andYueqingBethelShaftCollarManufacturingCo.,Ltd.(“Bethel”),
eachaproducerandexporterofsubjectmerchandise(collectively,“ChineseRespondents”).
ChineseRespondentswererepresentedbycounselatthehearingandsubmitted
prehearingandposthearingbriefs.
1ConfidentialReport,MemorandumINVͲOOͲ103(Nov.8,2016)(“CR”)atIͲI;PublicReport,
IronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550and731Ͳ
TAͲ1304to1305(Final),USITCPub.4652(Dec.2016)(“PR”)atIͲ1.TBWisalsoanimporterof***.
CR/PRatTableIIIͲ17,TableIVͲ1.
2Duringthepreliminaryphaseoftheseinvestigations,Baldoranditsaffiliate,BaldorElectric
CompanyCanada(“BaldorCanada”),amanufacturer/exporteroffinishedIMTDCsinCanada,
participatedinthestaffconferencewithcounselandsubmittedapostconferencebriefopposingthe
petitions.BaldorCanadacloseditsSt.Claire,QuebecIMTDCproductionfacilityonMay27,2016
andrelocateditsfinishingequipmentfromCanadatoitsfacilitiesinNorthCarolina.CRatIͲ5toIͲ6;
PRatIͲ4.BaldoralsohadanaffiliatethatproducedIMTDCsinChina,MaskaPowerTransmission
(Changzhou)Co.Ltd.(“BaldorMaska”),butBaldorpermanentlyclosedthisaffiliateinDecember
2014anddisposedofitsequipment.CRatIͲ6n.17,VIIͲ13;PRatIͲ5n.17,VIIͲ8;Transcriptof
November19,2015StaffConference(“Confer.Tr.”)at22(McCartney).
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4
B. BackgroundonDataCollectionandDataCoverage
TheOctober28,2015petitionsincludedfiveparagraphsdescribingtheparameters
oftherequestedscopeofimportedsubjectmerchandiseandasixthparagraphidentifying
correspondingU.S.HarmonizedTariffSchedule(“HTSUS”)statisticalreportingnumbersfor
therequestedcoveredproducts. 3Subsequenttofilingthepetitions,attherequestof
Commerceandotherparties,petitionersubmittedaseriesofrequeststoamendthescope
language.4Asaresult,thefiveͲparagraphscopeinthepetitionseventuallyexpandedto12
paragraphsandatable,collectivelyconsistingofmorethanthreesingleͲspacedpages. 5As
discussedinmoredetailbelow,theCommission’sstaffcontinuedtoworkwith
questionnairerespondentstoreviseandrefinetheirdatainaccordancewiththeadditional
scopechangesandtoremovequestionnaireresponsesfromthedatasetthatdidnotmeet
theparametersoftherevisedscopeorthecorrespondingdomesticlikeproductdefinition. 6
Thus,similartothefindinginourpreliminarydeterminations, 7multiplerevisionstothe
scopeoftheseinvestigationsresultedinchallengesintheCommission’scollectionand
analysisoftherelevantdata.8
Asexplainedbelow,theCommissioninvestigatednotonlythefirmsidentifiedinthe
petitionsbutalsootherpossibledomesticproducers,importers,andforeignproducers.A
numberofthesefirms,includingfirmsidentifiedinthepetitions,reportedthattheydonot
produceorimporttheIMDTCsatissueintheseinvestigations,andanumberofthese
domesticproducers,importers,andforeignproducersdidnotrespondtoourdatarequests.
Althoughpetitionercontendsthatthe“failureofnumerousrespondentstocomplywiththe
Commission’sinvestigationsmeritstheapplicationofadversefactsavailable,”9we
determinethatapplicationofadversefactsavailableunder19U.S.C.§1677e(b)is
3Petitions,vol.Iat5Ͳ6.
4SeegenerallyPetitioner’sPosthearingBriefatExhibit1at2Ͳ12;TranscriptofCommission’s
October18,2016Hearing(“HearingTr.”)at46Ͳ48,64Ͳ67(Pickard,DeFrancesco).
5Compare,e.g.,81Fed.Reg.75,032(Oct.28,2016)(finaldeterminations)with,e.g.,81Fed.
Reg.36,876(June8,2016)(preliminarydeterminations).
6Despitethenumerouschangestothescopelanguage,ChineseRespondentscontendthat
theCommission’sdata“intheend{are}prettygood”andthey“don’tidentifyanyhugedataissues
relatedtoscopeinthisfinalphase.”HearingTr.at11,118Ͳ119(Grimson)(alsonotingthat,inthe
finalphaseoftheseinvestigations,thedataproblems“areprettywelladdressedandresolved”).
Petitioneragreesthattherearenomeaningfuldataconcernsstemmingfromthesescope
modifications,giventhat“almostalloftherequestedamendmentstothescope”occurredbefore
thequestionnairesforthefinalphaseoftheseinvestigationswereissued.Petitioner’sPosthearing
Briefat2;seealsoid.atExhibit1at9(assertingthat“allpartiesagreethatthesechangeshavehad
nomaterialeffectsonthedataobtainedforthefinalphaseofthisinvestigation”).
7ConfidentialPreliminaryViews,EDISDoc.571266;USITCPub.4587at36.
8Compare,e.g.,CR/PRatTableCͲ1(posthearingreport)with,e.g.,MemorandumINVͲOOͲ
089(Oct.4,2016)atTableCͲ1(prehearingreport)andMemorandumINVͲNNͲ089(Dec.7,2015)at
TableCͲ1(reportinpreliminaryphaseoftheseinvestigations).
9Petitioner’sPrehearingBriefat44;HearingTr.at51Ͳ52(Pickard).
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5
inappropriateintheseinvestigations.ThisprovisionprovidesthattheCommission“may
useaninferencethatisadversetotheinterestsof{apartythathasfailedtocooperate,to
thebestofitsability,withtheCommission’srequestforinformation}inselectingfrom
amongthefactsotherwiseavailable.10Here,althoughcertainquestionnairerecipients
failedtorespondtotheCommission’squestionnaires,whichisnotuncommonin
Commissioninvestigations,manyotherrecipientsdidfullycomplywiththeCommission’s
requestsforinformation.Thus,iftheCommissionweretotakeanadverseinferenceas
petitioneradvocatesintheseinvestigations,itwouldnotsolelybeagainstthose
questionnairerecipientsthatfailedtorespondtotheCommission’srequestsbutalso
againstthosethatdidrespond.Moreover,petitionerdidnotidentify,andwecouldnot
otherwisediscern,alternativefactsavailableonthisrecordonwhichtheCommissioncould
baseitsdetermination.Wealsonotethatthedetaileddescriptionoftheproductatissuein
theseinvestigationsandthelackofanypubliclyavailableinformationonthisrecordspecific
toIMTDCmarketparticipantscomplicatedourassessmentofquestionnairecoveragefor
thedomesticindustry,importsfromsubjectandnonsubjectsources,andthesubject
industriesinCanadaandChina.Forthesereasonsandthosediscussedinmoredetail
below, 11wehavereliedoninformationavailable,whichincludesinformationsubmittedand
obtainedinthepreliminaryandfinalphasesoftheseinvestigations,includingquestionnaire
responsesfromrespondingdomesticproducers,purchasers,importers,andforeign
producersofsubjectmerchandise.
II. DomesticLikeProduct
A. InGeneral
IndeterminingwhetheranindustryintheUnitedStatesismateriallyinjuredor
threatenedwithmaterialinjurybyreasonofimportsofsubjectmerchandise,the
Commissionfirstdefinesthe“domesticlikeproduct”andthe“industry.” 12Section
771(4)(A)oftheTariffActof1930,asamended(“theTariffAct”),definestherelevant
domesticindustryasthe“producersasawholeofadomesticlikeproduct,orthose
producerswhosecollectiveoutputofadomesticlikeproductconstitutesamajor
proportionofthetotaldomesticproductionoftheproduct.” 13Inturn,theTariffActdefines
1019U.S.C.§1677e(b).Thestatutegoesontolistpotentialsourcesofinformationonwhich
theCommissionmaybaseitsadverseinference,includingthepetition,apriorfinaldeterminationor
reviewdetermination,oranyotherinformationplacedontherecord.Id.
11Weprovideadditionaldetailsaboutthescopeamendmentsinthedomesticlikeproduct
discussionbelow.Weprovideadditionalexplanationsconcerningthedevelopmentandrefinement
ofthevariousdatasetsinourrespectivediscussionsofnegligibleimportsinsectionIV(imports),
supplyinsectionVI.B.2(domesticandsubjectindustries),andthreatinsectionVII(subject
industries).
1219U.S.C.§1677(4)(A).
1319U.S.C.§1677(4)(A).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 13 of 218
6
“domesticlikeproduct”as“aproductwhichislike,orintheabsenceoflike,mostsimilarin
characteristicsanduseswith,thearticlesubjecttoaninvestigation.” 14
Thedecisionregardingtheappropriatedomesticlikeproductinaninvestigationisa
factualdetermination,andtheCommissionhasappliedthestatutorystandardof“like”or
“mostsimilarincharacteristicsanduses”onacaseͲbyͲcasebasis. 15Nosinglefactoris
dispositive,andtheCommissionmayconsiderotherfactorsitdeemsrelevantbasedonthe
factsofaparticularinvestigation. 16TheCommissionlooksforcleardividinglinesamong
possiblelikeproductsanddisregardsminorvariations. 17AlthoughtheCommissionmust
acceptCommerce’sdeterminationastothescopeoftheimportedmerchandisethatis
subsidizedorsoldatlessthanfairvalue,18theCommissiondetermineswhatdomestic
productisliketheimportedarticlesCommercehasidentified. 19
1419U.S.C.§1677(10).
15See,e.g.,CleoInc.v.UnitedStates,501F.3d1291,1299(Fed.Cir.2007);NECCorp.v.
DepartmentofCommerce,36F.Supp.2d380,383(Ct.Int’lTrade1998);NipponSteelCorp.v.United
States,19CIT450,455(1995);TorringtonCo.v.UnitedStates,747F.Supp.744,749n.3(Ct.Int’l
Trade1990),aff’d,938F.2d1278(Fed.Cir.1991)(“everylikeproductdetermination‘mustbemade
ontheparticularrecordatissue’andthe‘uniquefactsofeachcase’”).TheCommissiongenerally
considersanumberoffactors,includingthefollowing:(1)physicalcharacteristicsanduses;(2)
interchangeability;(3)channelsofdistribution;(4)customerandproducerperceptionsofthe
products;(5)commonmanufacturingfacilities,productionprocesses,andproductionemployees;
and,whereappropriate,(6)price.SeeNippon,19CITat455n.4;TimkenCo.v.UnitedStates,913F.
Supp.580,584(Ct.Int’lTrade1996).
16See,e.g.,S.Rep.No.96Ͳ249at90Ͳ91(1979).
17Nippon,19CITat455;Torrington,747F.Supp.at748Ͳ49;seealsoS.Rep.No.96Ͳ249at
90Ͳ91(Congresshasindicatedthatthelikeproductstandardshouldnotbeinterpretedin“sucha
narrowfashionastopermitminordifferencesinphysicalcharacteristicsorusestoleadtothe
conclusionthattheproductandarticlearenot‘like’eachother,norshouldthedefinitionof‘like
product’beinterpretedinsuchafashionastopreventconsiderationofanindustryadversely
affectedbytheimportsunderconsideration.”).
18See,e.g.,USEC,Inc.v.UnitedStates,34Fed.Appx.725,730(Fed.Cir.2002)(“TheITCmay
notmodifytheclassorkindofimportedmerchandiseexaminedbyCommerce.”);AlgomaSteel
Corp.v.UnitedStates,688F.Supp.639,644(Ct.Int’lTrade1988),aff’d,865F.3d240(Fed.Cir.),
cert.denied,492U.S.919(1989).
19HosidenCorp.v.AdvancedDisplayMfrs.,85F.3d1561,1568(Fed.Cir.1996)(the
Commissionmayfindasinglelikeproductcorrespondingtoseveraldifferentclassesorkinds
definedbyCommerce);Cleo,501F.3dat1298n.1(“Commerce’s{scope}findingdoesnotcontrol
theCommission’s{likeproduct}determination.”);Torrington,747F.Supp.at748Ͳ52(affirmingthe
Commission’sdeterminationdefiningsixlikeproductsininvestigationsinwhichCommercefound
fiveclassesorkinds).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 14 of 218
7
B. EvolutionoftheScopeofSubjectMerchandiseandImpactonData
Collection
IntheOctober28,2015petitions,TBWproposedascopeofimportedsubject
merchandiseconsistingoffiveparagraphsdescribingtheparametersoftherequested
coveredproductsandasixthparagraphidentifyingthecorrespondingHTSUSstatistical
reportingnumbers.20Duringthepreliminaryphaseoftheinvestigations,petitioner
requestedtwoamendmentstothescopepriortoCommerce’sdecisionwhethertoinitiate
theinvestigations.OnNovember5,2015,TBW,“{u}ponfurtherconsiderationofthisissue,”
proposedchangingthedimensionelementofthescopetospecifythatthemerchandise
subjecttotheinvestigationsconsistsof“thosenotlessthan4.0inches(101mm)in
maximumnominaloutsidediameter.” 21OnNovember17,2015,thedeadlinefor
Commerce’sdecisiononwhethertoinitiatetheinvestigationsortoextendthedeadlinefor
initiationinordertopollorotherwisedetermineindustrysupportforthepetitions,TBW
proposedrevisingthecoveredproductsfromthosewithacarboncontentof1.5percentby
weightorabovetothosewithacarboncontentof1.7percentbyweightorabove. 22Inits
November18,2015announcementoftheinitiationoftheinvestigations,Commerce
effectuatedpetitioner’srequestedamendmentstothescopeofimportedsubject
merchandiseastobothcarboncontentanddiameterdimension. 23
OnNovember18,2015,inviewofCommerce’sannouncement,Commissionstaff
requestedthatquestionnairerespondentsrevisetheirquestionnairedatatoconformtothe
newscopelanguage,andtheyissuedadditionalquestionnairestofirmsthathadbeen
identifiedintheinterveningtimeaspossibleU.S.marketparticipantsthathadnotbeen
namedinthepetitions. 24Becausethedeadlineforrespondingtotheseinformation
requestswasNovember23,2015,thepartiesbasedtheirargumentsduringthe
Commission’sstaffconferenceandintheirNovember23,2015postconferencebriefson
questionnairedatathathadnotyetbeenrevisedtoreflecttheinterveningscopedefinition
changes.25InitsDecember21,2015PreliminaryViews,theCommissionobservedthat
“muchoftheusableinformationavailableatthetimeofthepreliminarydeterminations
consistedofinformationrevisedbyquestionnairerespondentsorcollectedbythe
20Petitions,vol.Iat5Ͳ6.
21Petitioner’sNovember5,2015AmendedPetitionsat4Ͳ5.
22Petitioner’sNovember17,2015AmendedPetitionsat1Ͳ2andAttachment.
23USITCPub.4587at4Ͳ6;ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ7;80Fed.
Reg.73,716,73,721Ͳ22(Nov.25,2015);80Fed.Reg.73,722,73,725Ͳ26(Nov.25,2015).
24CommissionstaffaskedrespondingU.S.producers,importers,andforeignproducersto
revisetheirquestionnairedata,whichhadbeencollectedbasedonthescopedefinitionrequested
inthepetitions.CommissionstaffalsoissuedadditionalU.S.producerquestionnairesto***firms
(sevenpossibleproducersofunfinishedIMTDCsand***possibleproducersoffinishedIMTDCs)that
hadbeenidentifiedintheinterveningtimeaspossibleadditionalU.S.producersnotnamedinthe
petitions.USITCPub.4587at3,4,6&n.17;ConfidentialPreliminaryViews,EDISDoc.571266at4,
7Ͳ8&n.17.
25USITCPub.4587at5Ͳ6;ConfidentialPreliminaryViews,EDISDoc.571266at6Ͳ8.
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8
CommissioninthefifteenbusinessdaysbetweenCommerce’sNovember18,2015
announcementoftherevisedscopeandtheCommission’sFriday,December11,2015
vote.” 26
Petitionersubmittedanotherrequesttoamendthescopeoftheinvestigationson
March30,2016, 27whichCommerceeffectuatedinitsJune8,2016preliminary
determinationsbyaddingfourparagraphsandatablethatcollectivelyservedtoexclude
fromthescopecertainfinishedtorsionalvibrationdampers(“TVDs”);certainlightͲduty
fixedͲpitch,nonͲsynchronoussheaves;certainlightͲduty,variableͲpitch,nonͲsynchronous
sheaves;andcertainIMTDCbushings. 28OnJune17,2016,followingCommerce’s
preliminarydeterminations,theCommissionissuedtothepartiesfortheirreviewand
commentsdraftquestionnairesthatwouldbeusedtocollectdataforthefinalphaseof
theseinvestigations. 29AfterconsideringtheJune24,2016commentsreceivedfrom
petitioner,30theCommissionissuedthequestionnairesonJuly18,2016andrequested
responsesbyAugust18,2016. 31TBWsoughtfurtheramendmentsandclarificationstothe
scopelanguagefromCommerceonJune27,2016,August4,2016,August17,2016,and
August22,2016. 32Commerce’sfinaldeterminationsaddedlanguageexcludingcertain
flywheelswithringgearandcertainTVDinnerringsfromtheinvestigations’scope. 33
Initsfinaldeterminations,Commercedefinedthescopeoftheimported
merchandiseunderinvestigationasfollows:
ironmechanicaltransferdrivecomponents,whetherfinishedorunfinished(i.e.,
blanksorcastings).Subjectironmechanicaltransferdrivecomponentsareintheformof
wheelsorcylinderswithacenterboreholethatmayhaveoneormoregroovesorteethin
26TheCommission’sstaffproducedaDecember7,2015reportthatcompiledthe
informationobtainedduringtheinvestigations,includinganyinformationobtainedthatwas
responsivetopetitioner’stwoscopeamendmentsthatCommerceadopted.USITCPub.4587at6,
11;ConfidentialPreliminaryViews,EDISDoc.571266at8,56.
27CRatIͲ1;PRatIͲ1.
28Compare,e.g.,81Fed.Reg.36,876(June8,2016)(preliminarydeterminations)with,e.g.,
80Fed.Reg.73,716(Nov.25,2015)(initiation).
29DraftQuestionnairesforFinalPhaseoftheInvestigations,EDISDoc.584464.
30Petitioner’sCommentsonDraftQuestionnairesfortheFinalPhaseoftheInvestigations,
EDISDoc.584552.
31BlankQuestionnairesfortheFinalPhaseoftheInvestigations,EDISDoc.588765(basedon
thescopelanguageinCommerce’spreliminarydeterminations).
32CRatIͲ1;PRatIͲ1(identifyingthedatesonwhichpetitionersubmittedtheserequeststo
Commerce,asreportedinCommerce’sfinaldeterminations).
33CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina:
FinalAffirmativeDeterminationofSalesatLessThanFairValue,81Fed.Reg.75,032(Oct.28,2016);
CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe
People’sRepublicofChina:FinalAffirmativeDetermination,81Fed.Reg.75,037(Oct.28,2016);
CertainIronMechanicalTransferDriveComponentsfromCanada:FinalAffirmativeDeterminationof
SalesatLessThanFairValue,81Fed.Reg.75,039(Oct.28,2016).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 16 of 218
9
theiroutercircumferencethatguideormeshwithaflatorribbedbeltorlikedeviceandare
oftenreferredtoassheaves,pulleys,flywheels,flatpulleys,idlers,conveyerpulleys,
synchronoussheaves,andtimingpulleys.Theproductscoveredbytheseinvestigationsalso
includebushings,whichareironmechanicaltransferdrivecomponentsintheformofa
cylinderandwhichfitintotheboreholesofothermechanicaltransferdrivecomponentsto
lockthemintodriveshaftsbymeansofelementssuchasteeth,bolts,orscrews.
Ironmechanicaltransferdrivecomponentssubjecttotheseinvestigationsarethose
notlessthan4.00inches(101mm)inthemaximumnominalouterdiameter.
Unfinishedironmechanicaltransferdrivecomponents(i.e.,blanksorcastings)
possesstheapproximateshapeofthefinishedironmechanicaltransferdrivecomponent
andhavenotyetbeenmachinedtofinalspecificationaftertheinitialcasting,forgingorlike
operations.Thesemachiningprocessesmayincludecutting,punching,notching,boring,
threading,mitering,orchamfering.
Subjectmerchandiseincludesironmechanicaltransferdrivecomponentsasdefined
abovethathavebeenfinishedormachinedinathirdcountry,includingbutnotlimitedto
finishing/machiningprocessessuchascutting,punching,notching,boring,threading,
mitering,orchamfering,oranyotherprocessingthatwouldnototherwiseremovethe
merchandisefromthescopeoftheinvestigationsifperformedinthecountryof
manufactureoftheironmechanicaltransferdrivecomponents.
Subjectironmechanicaltransferdrivecomponentsarecoveredbythescopeofthe
investigationsregardlessofwidth,design,orirontype(e.g.,gray,white,orductileiron).
Subjectironmechanicaltransferdrivecomponentsarecoveredbythescopeofthe
investigationsregardlessofwhethertheyhavenonͲironattachmentsorpartsandregardless
ofwhethertheyareenteredwithothermechanicaltransferdrivecomponentsoraspartofa
belteddriveassembly(whichtypicallyincludesoneormoreoftheironmechanicaltransfer
drivecomponentsidentifiedabove,andwhichmayalsoincludeotherpartssuchasabelt,
couplingand/orshaft).Whenenteredasamechanicaltransferdriveassembly,onlytheiron
componentsthatmeetthephysicaldescriptionofcoveredmerchandisearecovered
merchandise,nottheothercomponentsinthemechanicaltransferdriveassembly(e.g.,
belt,coupling,shaft).However,thescopeexcludesflywheelswitharinggearpermanently
attachedontotheouterdiameter.Aringgearisasteelringwithconvexexternalteethcut
ormachinedintotheouterdiameter,andwherethediameteroftheringexceeds200mm
anddoesn’texceed2,244.3mm.
Forpurposesoftheseinvestigations,acoveredproductisof“iron”wherethearticle
hasacarboncontentof1.7percentbyweightorabove,regardlessofthepresenceand
amountofadditionalalloyingelements.
Excludedfromthescopearefinishedtorsionalvibrationdampers(TVDs).Afinished
TVDisanenginecomponentcomposedofthreeseparatecomponents:aninnerring,a
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10
rubberring,andanouterring.Theinnerringisanironwheelorcylinderwithaboreholeto
fitacrankshaftwhichformsasealtopreventleakageofoilfromtheengine.Therubber
ringisadampeningmediumbetweentheinnerandouterringsthateffectivelyreducedthe
torsionalvibration.Theouterring,whichmaybemadeofmaterialsotherthaniron,mayor
maynothavegroovesinitsoutercircumference.ToconstituteafinishedexcludedTVD,the
productmustbecomposedofeachofthethreepartsidentifiedaboveandthethreeparts
mustbepermanentlyaffixedtotherubberring.AfinishedTVDisexcludedonlyifitmeets
thephysicaldescriptionprovidedabove;merchandisethatotherwisemeetsthedescription
ofthescopeanddoesnotsatisfythephysicaldescriptionofexcludedfinishedTVDsaboveis
stillcoveredbythescopeoftheinvestigationsregardlessofenduseoridentificationasa
TVD.
AlsoexcludedfromthescopearecertainTVDinnerrings.Toconstituteanexcluded
TVDinnerring,theproductmusthaveeachofthefollowingcharacteristics:(1)asingle
continuouscurveformingaprotrusionorindentationonoutersurface,alsoknownasasine
lock,withaheightordepthnotlessthan1.5millimetersandnotexceeding4.0millimeters
andwithawidthofatleast10millimetersasmeasuredacrossthesinelockfromoneedge
ofthecurvetotheother;(2)afacewidthoftheotherdiameterofgreaterthanorequalto
20millimetersbutlessthanorequalto80millimeters;(3)anoutsidediametergreaterthan
orequalto101millimetersbutlessthanorequalto300millimeters;and(4)aweightnot
exceeding7kilograms.ATVDinnerringisexcludedonlyifitmeetsthephysicaldescription
providedabove;merchandisethatotherwisemeetsthedescriptionofthescopeanddoes
notsatisfythephysicaldescriptionofexcludedTVDinnerringsisstillcoveredbythescopeof
thisinvestigationregardlessofenduseoridentificationasaTVDinnerring.
ThescopealsoexcludeslightͲduty,fixedͲpitch,nonͲsynchronoussheaves
(“excludableLDFPNsheaves”)witheachofthefollowingcharacteristics:madefromgrey
irondesignatedasASTM(NorthAmericanspecification)Grade30orlower,GB/T(Chinese
specification)GradeHT200orlower,DIN(Germanspecification)GG20orlower,orEN
(Europeanspecification)ENͲGJL200orlower;havingnomorethantwogrooves;havinga
maximumfacewidthofnomorethan1.75inches,wherethefacewidthisthewidthofthe
partatitsoutsidediameter;havingamaximumoutsidediameterofnotmorethan18.75
inches;andhavingnoteethontheoutsideordatumdiameter.ExcludableLDFPNsheaves
mustalsoeitherhaveamaximumstraightboresizeof1.6875incheswithamaximumhub
diameterof2.875inches;orelsehaveataperedboremeasuring1.625inchesatthelarge
end,amaximumhubdiameterof3.50inches,alengththroughtaperedboreof1.0inches,
exactlytwotappedholesthatare180degreesapart,anda2.0Ͳinchboltcircleonthefaceof
thehub.ExcludableLDFPNsheavesmorethan6.75inchesinoutsidediametermustalso
haveanarmorspokeconstruction.Further,excludableLDFPNsheavesmusthaveagroove
profileasindicatedinthetablebelow:
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 18 of 218
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Size (belt profile) Outside
Diameter
Top Width Range of Each
Groove
Max.
H e ight
Angle
MA/AK (A, 3L, 4L) < 5.45 in. 0.484 – 0.499 in. 0.531 in. 34o
MA/AK (A, 3L, 4L) >5.45 in. but
< 18.75 in.
0.499 – 0.509 in. 0.531 in. 38o
MB/BK (A, B, 4L, 5L) < 7.40 in. 0.607 – 0.618 in. 0.632 in. 34o
MB/BK (A, B, 4L, 5L) >7.40 in. but
< 18.75 in.
0.620 – 0.631 in. 0.635 in. 38o
Inadditiontotheabovecharacteristics,excludableLDFPNsheavesmustalsohavea
maximumweight(poundsͲperͲpiece)asfollows:forexcludableLDFPNsheaveswithone
grooveandanoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto8.0
inches,themaximumweightis4.7pounds;forexcludableLDFPNsheaveswithtwogrooves
andanoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto8.0inches,the
maximumweightis8.5pounds;forexcludableLDFPNsheaveswithtwogroovesandan
outsidediameterofgreaterthan8.0inchesbutlessthanorequalto12.0inches,the
maximumweightis15.0pounds;forexcludableLDFPNsheaveswithonegrooveandan
outsidediametergreaterthan12.0inchesbutlessthanorequalto15.0inches,the
maximumweightis17.5pounds;forexcludableLDFPNsheaveswithonegrooveandan
outsidediameterofgreaterthan15.0inchesbutlessthanorequalto18.75inches,the
maximumweightis16.5pounds;andforexcludableLDFPNsheaveswithtwogroovesand
anoutsidediameterofgreaterthan15.0inchesbutlessthanorequalto18.75inches,the
maximumweightis26.5pounds.
ThescopealsoexcludeslightͲduty,variableͲpitch,nonͲsynchronoussheaveswith
eachofthefollowingcharacteristics:madefromgreyirondesignatedasASTM(North
Americanspecification)Grade30orlower,GB/T(Chinesespecification)GradeHT200or
lower,DIN(Germanspecification)GG20orlower,orEN(Europeanspecification)ENͲGJL200
orlower;havingnomorethan2grooves;havingamaximumoverallwidthoflessthan2.25
incheswithasinglegroove,orof3.25inchesoflesswithtwogrooves;havingamaximum
outsidediameterofnotmorethan7.5inches;havingamaximumboresizeof1.625inches;
havingeitheroneortwoidentical,internallythreadedhub(i.e.,withthreadsontheoutside
diameter)thatenable(s)thewidth(opening)ofthegroovetobechanged;andhavingno
teethontheoutsideordatumdiameter.
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ThescopealsoexcludescertainIMTDCbushings.AnIMTDCbushingisexcludedonly
ifithasataperedangleofgreaterthanorequalto10degrees,wheretheangleismeasured
betweenoneoutsidetaperedsurfaceandthedirectlyopposingoutsidetaperedsurface.34
IMTDCsareironcastingsintheshapeofwheelsorcylindersforuseinbelteddrive
assembliesinfans,conveyers,compressors,pumps,andmixers.35CircularIMTDCsmaybe
referredtoassheaves,pulleys,orflywheels,andcylindricalIMTDCs,whicharedesignedto
attachtheshafttothecircularIMTDC,maybereferredtoasbushings. 36Regardlessofsize
orshape,IMTDCsareconnectedwithbeltsandusedtotransferpowerfromashaft
operatedbyamotororengine.37IMTDCsmaybeproducedinfinishedorunfinished
(referredtoasblanksorcastings)form.38IMTDCsmaybemanufacturedinavarietyofsizes
asmeasuredbytheouterdiameter.39
C. Analysis
Initspreliminarydeterminations,theCommissiondefinedasingledomesticlike
productencompassingallformsoffinishedandunfinishedIMTDCsdescribedinthescope
oftheinvestigations,aswellassmallͲdiameterIMTDCsunder4inchesinmaximumnominal
outsidediameter.40Initspreliminarydeterminations,theCommissionfoundthatthe
recorddidnotsupportdifferentiatingbetweensoͲcalledsmallͲandlargeͲdiameterIMTDCs,
whichpetitionerarguedweredividedbyafourͲinchnominalouterdiameter.The
Commissionfoundoverlapinthemanufacturingprocessesandemployeesusedtoproduce
34AsCommerceexplained,themerchandisecoveredbytheseinvestigationsiscurrently
classifiableunderHTSUSstatisticalreportingnumbers8483.30.8090,8483.50.6000,8483.50.9040,
8483.50.9080,8483.90.3000,and8483.90.8080.Coveredmerchandisemayalsoenterunderthe
followingHTSUSsubheadings:7325.10.0080,7325.99.1000,7326.19.0010,7326.19.0080,
8431.31.0040,8431.31.0060,8431.39.0010,8431.39.0050,8431.39.0070,8431.39.0080,and
8483.50.4000.81Fed.Reg.75,032;81Fed.Reg.75,037;81Fed.Reg.75,039(footnotesomitted).
35IMTDCshaveacenterboreholeforashafttobeinsertedandanoutercircumference,
oftenwithavarietyofteethorgrooves,designedtomeshwithabelt.CRatIͲ20;PRatIͲ17toIͲ18.
OutͲofͲscopenonͲironmechanicaltransferdevicecomponents(“nonͲironMTDCs”)areproduced
fromothermaterials,includingaluminum,plastic,andsteel.CRatIͲ19n.29;PRatIͲ17n.29.
36CRatIͲ14;PRatIͲ12.
37CRatIͲ19;PRatIͲ17.
38UnfinishedIMTDCspossesstheapproximateformofanIMTDCwithoutbeingmachined
intofinalspecificationsandhavethesolepurposeofbeingmanufacturedintoafinishedIMTDC.CR
atIͲ30;PRatIͲ27.
39CRatIͲ21;PRatIͲ18.
40TheCommissionfoundthatfinishedandunfinishedIMTDCs,aswellassmallͲdiameter
IMTDCs,shouldbeincludedinthesamedomesticlikeproduct,whilesteelMTDCsshouldnotbe
includedinthedomesticlikeproduct.USITCPub.4587at11Ͳ19.
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IMTDCsregardlessofdiameter,41andfurtherthatIMTDCsofalldiametershavesimilar
physicalcharacteristicsandoverlapinendusesandarenotdifferentiatedintermsof
producersorcustomers.42WhileIMTDCsofdifferentsizesnecessarilyhaveprice
differencesandalackofsubstitutability,suchdifferencesapplytoallIMTDCsofdifferent
sizesregardlessofthedividingline.Basedonanexaminationofthetraditionaldomestic
likeproductfactors,theCommissionfoundthattherecordsupportedincluding
smallͲdiameterIMTDCs,whichwereoutsidetheinvestigations’scope,inthesamedomestic
likeproductasthelargeͲdiameterIMTDCscorrespondingtothescope.43
Inthefinalphaseoftheseinvestigations,theonlyaspectofthedomesticlike
productdefinitionfromthepreliminarydeterminationschallengedbyanypartyisthe
inclusionofsmallͲdiameterIMTDCsinthedomesticlikeproductdefinition,whichpetitioner
continuestocontest. 44
AlthoughpetitionercontinuestoargueagainstincludingsmallͲdiameterIMTDCsin
thedomesticlikeproduct,itsubmittednocommentsontheCommission’sdraft
questionnairesregardingthedomesticlikeproductdefinition. 45Itfailedtodoso,despite
theCommission’sreminderinitspreliminarydeterminationsthatpartieswouldneedto
“identifyintheircommentsonthedraftquestionnairesforanyfinalphaseofthese
investigationsanyargumentsthatwouldimplicatedatacollection,suchasrequeststo
definethedomesticlikeproduct(s)inadifferentmanner,”asrequiredunderthe
Commission’srules.46
41AstheCommissionobserved,TBWadmittedintheoriginalpetitionsthatitusescommon
manufacturingfacilities,processes,andemployeestomanufactureallIMTDCsregardlessof
diameter.USITCPub.4587at14(citing,e.g.,Petitions,vol.Iat20,21).
42USITCPub.4587at13Ͳ16.
43USITCPub.4587at13Ͳ16.
44Inthefinalphaseoftheseinvestigations,petitioneraskstheCommissiontodefinea
singledomesticlikeproductcorrespondingtotheIMTDCsdescribedinthescopeofthe
investigations,whichwouldincludefinishedandunfinishedIMTDCsinallforms(sheaves,bushings,
andflywheels),butnotinclude(i)smallͲdiameterIMTDCsinsizeslessthan4inchesinnominalouter
diameteror(ii)nonͲironMTDCs.WithrespecttosmallͲdiameterIMTDCs,petitionerarguesthatthe
Commissionhaspreviouslyreliedondiametermeasurementstodefinedomesticlikeproductsin
otherinvestigations,andwitnessesforthepetitionerclaimedthattherearedistinctproduction
processesforsmallͲandlargeͲdiameterIMTDCs.Petitionernonethelessconcedesthattheinclusion
ofsmallͲdiameterIMTDCsinthedomesticlikeproductwillnotimpacttheCommission’sanalysis.
Petitioner’sPosthearingBriefatExhibit1at13Ͳ16;HearingTr.at35,72,135Ͳ136(Pickard);
Petitioner’sPrehearingBriefat2Ͳ3,Exhibit1at1Ͳ12.ChineseRespondentscharacterizepetitioner’s
proposed4ͲinchdividinglinebetweensmallͲandlargeͲdiameterIMTDCsasarbitrary.Theyargue
thatregardlessofwhethertheCommissionincludessmallͲdiameterIMTDCsinthedomesticlike
product,therecorddoesnotsupportaffirmativedeterminations.ChineseRespondents’
PosthearingBriefat2;HearingTr.at135Ͳ136(Grimson).
45Petitioner’sCommentsonDraftQuestionnaires(Jun.24,2016).
46USITCPub.4587at19n.99;ConfidentialPreliminaryViewsat28n.99(citing
19C.F.R.§207.20(b)).
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14
WefindthattherecordcontinuestosupporttheCommission’sfindingsinits
preliminarydeterminations. 47Petitioneroffersnonewevidenceorargumenttosupportits
proposeddomesticlikeproductdefinition. 48Indeed,therecorddoesnotsupport
petitioner’sargumentthatitsownproductionprocessesaredistinctforsmallͲandlargeͲ
diameterIMTDCs. 49***.50Petitioneroffersnoevidencethat***arenotrepresentativeof
otherproducersofIMTDCsorthatanyphysicaldistinctionsbetweensmallͲandlargeͲ
diameterIMTDCsotherwisedictatedifferentproductionprocesses.Infact,otherdomestic
producersthatcastand/orfinishIMTDCsintheUnitedStatesreportedthatthey
manufacturesmallͲandlargeͲdiameterIMTDCsonthesameproductionequipment.51We
47See,e.g.,CRatIͲ19toIͲ46,IIͲ1,IIIͲ1toIIIͲ4,IIIͲ8toIIIͲ16,IIIͲ18toIIIͲ20,IIIͲ24toIIIͲ26;PR
atIͲ17toIͲ40,IIͲ1,IIIͲ1toIIIͲ3,IIIͲ4toIIIͲ7,IIIͲ8toIIIͲ9,IIIͲ10toIIIͲ11;CR/PRatTableIIͲ1,TableIIIͲ
11,TableIIIͲ12.Indeed,initsoriginalpetitions,petitionerarguedthatanexaminationofeachofthe
sixdomesticlikeproductfactorssupporteddefiningasingledomesticlikeproductconsistingofthe
productswithinthescopeoftheinvestigations,whichatthetimeincludedbothsmallͲandlargeͲ
diameterIMTDCs.Petitions,vol.Iat5Ͳ6,17Ͳ22.Aspetitionerexplained,theIMTDCs“coveredby
thescopeofthesepetitionsshouldbeconsideredtocompriseasingledomesticlikeproduct.
CoveredIMTDCscompriserelatedproductsofdifferentsizesandshapesthatconstitutea
continuumwithoutanyclearbreakingpoint.Theyaresoldthroughthesamechannelsof
distribution,areperceivedbycustomersaspartsofmechanicaltransferdrives,andareproducedin
thesameproductionfacilitiesusingcommonproductionmethods,machinery,andemployees.
Theirpricesfallwithinacontinuumdictatedbysizeandweight,andbothfinishedandunfinished
coveredIMTDCshavesimilarphysicalcharacteristics,andthesameendfunction.Assuch,the
Commissionshouldfindasingledomesticlikeproductcoterminouswiththeproductssubjectto
theseinvestigations.”Id.at21Ͳ22.
48SeegenerallyPetitioner’sPrehearingBriefat2,Exhibit1.
49HearingTr.at130Ͳ136.
50Petitioner’sPosthearingBriefatExhibit1at14Ͳ15;CR/PRatTableIIIͲ1n.4.
51Accordingtoinformationontherecordinthefinalphaseoftheseinvestigations,fiveU.S.
firmsfinishIMTDCsfromcastingsthattheypurchasefromthirdparties(B&B,Baldor,HiͲLo,Maurey,
andSterling),andfivefirmsareintegratedproducersthatbothcastandfinishIMTDCs(Bremen,
EnDyn,Goldens,MartinSprocket,andTBW).Severalfoundriesalsoreportedthattheymanufacture
unfinishedIMTDCsintheUnitedStates.CRatIIIͲ1toIIIͲ3;PRatIIIͲ1toIIIͲ2.Domesticproducers
reportedmanufacturingsmallͲandlargeͲdiameterIMTDCsonthesameproductionequipment.
CR/PRatTableIIIͲ11(overlappingequipmentforfinishing),TableIIIͲ12(overlappingequipmentfor
casting);CRatIIIͲ18toIIIͲ20;PRatIIIͲ8toIIIͲ9;***.Moreover,asevenpetitionernotes,the
Commission’squestionnairesinstructeddomesticproducerstoreportinformationonsmallͲand
largeͲdiameterIMTDCsseparatelyfromanydataonMTDCsmanufacturedfromsteel,plastic,or
othermaterials.Petitioner’sPosthearingBriefatExhibit1at37Ͳ38.Thus,theoverlapinproduction
facilitiesforsmallͲandlargeͲdiameterIMTDCsreflectedinCR/PRatTableIIIͲ11andTableIIIͲ12is
notbasedonproductionofsteelorplasticIMTDCs,whichispresentedelsewhereinthesetables.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 22 of 218
15
remainunpersuadedthat4inchesinnominaloutsidediameterestablishesacleardividing
lineforIMTDCs.
Intheabsenceofnewargumentsorevidenceunderminingourfindingsinthe
preliminarydeterminations,weretainthepriordomesticlikeproductdefinition:asingle
domesticlikeproductincludingallformsoffinishedandunfinishedIMTDCsdescribedinthe
investigations’scopeandincludingsmallͲdiameterIMTDCsunder4inchesinmaximum
nominaloutsidediameter.Wealsodeterminenottoincludeinthedomesticlikeproduct
definitionsteelMTDCsthataremanufacturedfromsinteredsteelpowderordirectͲ
machinedsteelbarsforthesamereasonsarticulatedinourpreliminarydeterminations. 52
III. DomesticIndustry
Thedomesticindustryisdefinedasthedomestic“producersasawholeofa
domesticlikeproduct,orthoseproducerswhosecollectiveoutputofadomesticlike
productconstitutesamajorproportionofthetotaldomesticproductionoftheproduct.” 53
Indefiningthedomesticindustry,theCommission’sgeneralpracticehasbeentoincludein
theindustryproducersofalldomesticproductionofthelikeproduct,whethertollͲ
produced,captivelyconsumed,orsoldinthedomesticmerchantmarket.These
investigationsraisetwosetsofdomesticindustryissues.Thefirstconcernswhethercertain
processingactivitiesaresufficienttoconstitutedomesticproduction.Thesecondconcerns
whetherappropriatecircumstancesexisttoexcludeanydomesticproducersfromthe
domesticindustrypursuanttotherelatedpartiesprovision.
52USITCPub.4587at16Ͳ19.
5319U.S.C.§1677(4)(A).
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A. SufficientProductionͲRelatedActivities
Indecidingwhetherafirmqualifiesasadomesticproducerofthedomesticlike
product,theCommissiongenerallyanalyzestheoverallnatureofafirm’sU.S.productionͲ
relatedactivities,althoughproductionͲrelatedactivityatminimumlevelscouldbe
insufficienttoconstitutedomesticproduction. 54TheproductionofIMTDCsbeginswiththe
meltingofpigiron,scrapiron,andferrousscrapmetalinafoundryfurnacealongwith
alloyingagentsthatmaybeneededtoensureproperironchemistry.Manufacturerspour
themoltenmetalintoafoundrymoldthattypicallyconsistsofanimprintedshapeformed
bysandthathasbeencompactedintoacavitythatapproximatesthefinishedshapeofthe
desiredoutput.OncethesandͲcastmoltenmetalhascooledintoasolid,themanufacturer
removesandblastsawaythesandandremovesanyexcessironthatmaybepresentinthe
mold.TofinishtheunfinishedIMTDCblanks,manufacturersmachinegroovesorteeth,cut
tapholes,sometimesapplysurfacetreatmentssuchaspaintoroil,andtheninspectand
testthematerial.55IntheUnitedStates,somefirms(foundries)manufactureunfinished
IMTDCs,somefirms(finishers)onlyengageinfinishingoperationsonunfinishedIMTDCs,
andsomefirmshaveintegratedoperationsthatmanufactureunfinishedandfinished
IMTDCs. 56
Initspreliminarydeterminations,theCommissionincludedfinishersinthedomestic
industrybasedonitsfindingthatmachiningoperationstotransformunfinishedIMTDC
blanksintofinishedIMTDCsweresufficientproductionͲrelatedactivitiestoconstitute
domesticproduction. 57Atthetime,petitionerarguedthatmachiningoperationsdidnot,in
andofthemselves,constitutedomesticproduction. 58Inthefinalphaseofthese
investigations,petitionerarguesthat,relativetofinishingoperations,castingunfinished
IMTDCsisamoresubstantialpartoftheoverallproductionprocessthataccountsforalarge
portionofthecostandvalueofthefinishedIMTDCs,butitnolongerarguesagainst
54TheCommissiongenerallyconsiderssixfactors:(1)sourceandextentofthefirm’scapital
investment;(2)technicalexpertiseinvolvedinU.S.productionactivities;(3)valueaddedtothe
productintheUnitedStates;(4)employmentlevels;(5)quantityandtypeofpartssourcedinthe
UnitedStates;and(6)anyothercostsandactivitiesintheUnitedStatesdirectlyleadingto
productionofthelikeproduct.NosinglefactorisdeterminativeandtheCommissionmayconsider
anyotherfactorsitdeemsrelevantinlightofthespecificfactsofanyinvestigation.Crystalline
SiliconPhotovoltaicCellsandModulesfromChina,Inv.Nos.701ͲTAͲ481and731ͲTAͲ1190(Final),
USITCPub.4360at12Ͳ13(Nov.2012).
55CRatIͲ35toIͲ39;PRatIͲ31toIͲ34;ConfidentialPreliminaryViews,EDISDoc.571266at
16;USITCPub.4587at11Ͳ12.
56See,e.g.,CR/PRatTableIIIͲ1.
57USITCPub.4587at20Ͳ23;ConfidentialPreliminaryViews,EDISDoc.571266at29Ͳ35.
58Petitioner’sPostconf.Briefat5,Exhibit1at24Ͳ29;Confer.Tr.at15;Petitions,Vol.Iat2,
13,22Ͳ25,27.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 24 of 218
17
includingfinishersinthedomesticindustry.59ChineseRespondentsdonotmakeany
argumentsconcerningthisissueinthefinalphaseoftheseinvestigations. 60
Basedonourconsiderationofseveralfactors,wedeterminethatfinishing
operationstomachineunfinishedIMTDCsintofinishedIMTDCsaresufficientproductionͲ
relatedactivitiestoconstitutedomesticproduction.Finishingoperationsrelyprimarilyon
unfinishedIMTDCsthataremanufacturedintheUnitedStates. 61Domesticfinishing
operationsemployfewerproductionͲrelatedworkers(“PRWs”)thancastingoperations, 62
butatleastsomespecializedtrainingisneededfortheseemployees.63Thevalueaddedby
finishingoperationsissubstantial. 64Moreover,finishingoperationsappeartoinvolve
substantialcapitalinvestments.65Basedontherecord,wedeterminetoincludewithinthe
domesticindustryU.S.firmsthatmachineunfinishedIMTDCsintofinishedIMTDCs.
59Petitioner’sPrehearingBriefatExhibit1at3Ͳ4.
60Inthepreliminaryphaseoftheseinvestigations,respondentsarguedthatfinishersshould
beincludedinthedomesticindustry.ChineseRespondents’Postconf.Briefat14Ͳ15.
61U.S.firmsthatengageinfinishingoperationsprimarilysourcetheirrawmaterialsfromthe
UnitedStates.In2015,***percentofdomesticproducers’combinedfinishedIMTDCproductionin
termsofpieceswasfromunfinishedIMTDCs***,approximately***wasfrom***,***percentwas
fromunfinishedIMTDCs***,and***percentwasfromunfinishedIMTDCs***.CRatIIIͲ15toIIIͲ
16;PRatIIIͲ7.
62Comparedtointegratedproducers,U.S.firmsthatsolelymachineunfinishedIMTDCsinto
finishedIMTDCsreportedemployingfewer,butstillsizable,numbersofPRWs.CR/PRatTableIIIͲ9
(finishersthatdonothavecastingoperationsemployed***to***PRWsduringthePOI,whereas
integratedproducersemployed***to***PRWs).
63Petitionercontinuestoarguethatfinishingoperationsareaminorstepofalarger,more
laborͲintensiveprocess.Itassertsthatcastingoperationscreatetheessentialcharacteristicsofthe
finishedfinalproduct,afterwhichonlyminoradditionalfinishingoccurs.Petitioner’sPrehearing
BriefatExhibit1at3Ͳ4;Petitioner’sPostconf.BriefatExhibit1at28Ͳ29.Atleastsometechnical
expertiseisrequiredforfinishingoperations.Threeintegratedfirmsthatmanufactureunfinished
andfinishedIMTDCsreportedthatnosubstantialtechnicalexpertiseisrequiredtomanufacture
finishedIMTDCsfromunfinishedIMTDCs,whereasthreeintegratedfirmsandallfivefirmsthat
solelyfinishIMTDCsreportedthattechnicalexpertiseisrequiredtomachineunfinishedIMTDCsinto
finishedIMTDCs.Duringthepreliminaryphaseoftheseinvestigations,Baldorreportedthatit
utilizesroboticcells,tooling,andotherspeciallydesignedequipmentthatarededicatedto
machiningblankstoperformfinishingoperationsthatincludedrilling,boring,turning,hobbing,
broaching,flanging,coating,testing,andinspecting.Itarguedthatitshighlytrainedemployees
haveundertakenextensivemathematicalstudiesanduseadvancedtechnicalskillsto***operate
thatequipment.Baldor’sPostconf.Briefat22Ͳ23,Exhibit2atparagraph3,paragraph6,Exhibit10
at4;Confer.Tr.at18;CR/PRatTableIIIͲ6.
64U.S.firmsperformingfinishingoperationsreportedthatthevalueaddedbytheirfinishing
operationswasabout***percent(calculatedasaratioofconversioncoststototalcostofgoods
sold(“COGS”))or***percent(calculatedasaratioofconversioncostsplusselling,general,and
administrativeexpenses(“SG&A”)tooperatingexpenses).CR/PRatTableIIIͲ8.
65U.S.firmsperformingfinishingoperationsreportedthattheirfinishingoperations
involvedcapitalinvestmentsrangingfrom$***to$***,andtheyreportedvarioussourcesfortheir
capitalinvestment(iftheyreportedthisinformation),including***.CR/PRatTableIIIͲ4.
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B. RelatedParties
Wealsomustdeterminewhetheranyproducerofthedomesticlikeproductshould
beexcludedfromthedomesticindustrypursuanttosection771(4)(B)oftheTariffAct.This
provisionallowstheCommission,ifappropriatecircumstancesexist,toexcludefromthe
domesticindustryproducersthatarerelatedtoanexporterorimporterofsubject
merchandiseorwhicharethemselvesimporters.66Exclusionofsuchaproduceriswithin
theCommission’sdiscretionbaseduponthefactspresentedineachinvestigation. 67
Initspreliminarydeterminations,theCommissionfoundthatthreefirmswere
relatedpartiesasimportersofsubjectmerchandise:***.TheCommissionfoundthat
appropriatecircumstancesdidnotexisttoexcludeanyofthesefirmsfromthedomestic
industry.68
Inthefinalphaseoftheseinvestigations,fourrespondingdomesticproducersare
relatedpartiesbecausetheyimportedsubjectmerchandiseduringtheJanuary2013to
June2016periodofinvestigation(“POI”). 69Petitionerarguesagainstexcluding***from
thedomesticindustry,assertingthateachofthesefirms’primaryinterestlieswithdomestic
production. 70ChineseRespondentsarguethat***shouldbeexcludedfromthedomestic
industryduetoitssignificantrelianceonsubjectandnonsubjectimports.71Wefindthat
appropriatecircumstancesdonotexisttoexcludeanyofthefirmsfromthedomestic
industryasrelatedparties,asexplainedbelow.
66SeeTorringtonCo.v.UnitedStates,790F.Supp.1161,1168(Ct.Int’lTrade1992),aff’d
mem.,991F.2d809(Fed.Cir.1993);SandvikABv.UnitedStates,721F.Supp.1322,1331Ͳ32(Ct.
Int’lTrade1989),aff’dmem.,904F.2d46(Fed.Cir.1990);EmpirePlowCo.v.UnitedStates,675F.
Supp.1348,1352(Ct.Int’lTrade1987).
67TheprimaryfactorstheCommissionhasexaminedindecidingwhetherappropriate
circumstancesexisttoexcludearelatedpartyincludethefollowing:(1)thepercentageofdomestic
productionattributabletotheimportingproducer;(2)thereasontheU.S.producerhasdecidedto
importtheproductsubjecttoinvestigation(whetherthefirmbenefitsfromtheLTFVsalesor
subsidiesorwhetherthefirmmustimportinordertoenableittocontinueproductionandcompete
intheU.S.market);(3)whetherinclusionorexclusionoftherelatedpartywillskewthedataforthe
restoftheindustry;(4)theratioofimportshipmentstoU.S.productionfortheimportedproduct;
and(5)whethertheprimaryinterestoftheimportingproducerliesindomesticproductionor
importation.ChangzhouTrinaSolarEnergyCo.v.USITC,100F.Supp.3d1314,1326Ͳ31(Ct.Int’l.
Trade2015);seealsoTorrington,790F.Supp.at1168.
68ConfidentialPreliminaryViews,EDICDoc.57126at35Ͳ42&n.143;USITCPub.4587at23Ͳ
28&n.143(ViceChairmanPinkertandCommissionerWilliamsondisagreeingwithrespectto***,
findingthatthefirm’sratioofsubjectimportstodomesticproduction,***,indicatingthatits
primaryinterestslaywithimportationandnotdomesticproduction).
69CR/PRatTableIIIͲ17(showingsubjectimports).
70Petitioner’sPosthearingBriefatExhibit1at29Ͳ31;Petitioner’sPrehearingBriefat3Ͳ6.
71Respondents’PrehearingBriefat4Ͳ9.
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***.***isa***ofIMTDCsandaccountedfor***percentbypiecesand***
percentbyweightofrespondingU.S.producers’productionof***IMTDCsin2015. 72
DuringthePOI,***alsoimported***.Onavaluebasis,thefirm’simportsofsubject
merchandisefrom***,andonavolumebasis(bypieces),itsimportsofsubject
merchandisefrom***.73Thefirm’scapitalexpendituresandresearchanddevelopment
(“R&D”)expenseswere***.74While***reportedsourcing***fromotherU.S.producers
duringthePOI,italsoreportedthatit***.75***hadthe***operatingperformanceofany
U.S.IMTDC***duringthePOI. 76Thisfirmalsoreported***duringthePOI.It***. 77
Further,thefirm***.7879
Wefindappropriatecircumstancesdonotexisttoexcludethisfirmasarelated
party.Althoughthisfirmhadahighratioofsubjectimportstodomesticproductionduring
thePOI,its***indicateacommitmenttoU.S.production,whichisfurthersupportedby
72CR/PRatTableIIIͲ1.
73Thevolume(inpieces)ofimportsofsubjectmerchandisefrom***expressedasaratioto
thefirm’sU.S.productionwas***percentin2013,***percentin2014,***percentin2015,***
percentinthefirstsixmonthsof2015(“interim2015”),and***percentinthefirstsixmonthsof
2016(“interim2016”),whereasthevolume(inpieces)ofsubjectimportsfrom***asaratiotoU.S.
productionwas***percentin2013,***percentin2014,***percentin2015,***percentin
interim2015,and***percentininterim2016).Asaratiotothevalueofthefirm’stotalU.S.
shipments,thevalueofimportsofsubjectmerchandisefromChinaandCanadawas***percentin
2013,***percentin2014,***percentin2015,***percentininterim2015,and***percentin
interim2016;asaratiotothefirm’stotalU.S.shipmentsbypieces,thevolumeofimportsofsubject
merchandisefromCanadaandChinawas***percentin2013,***percentin2014,***percentin
2015,***percentininterim2015,and***percentininterim2016.Asexplainedinourvolume
discussioninsectionVI.Cbelow,werelyprimarilyonvalueͲbasedindicatorsasthebestmeasurefor
theproductintheseinvestigations,althoughwehavealsoconsideredquantityͲbasedindicators(in
pieces)whereappropriate.
74CR/PRatTableVIͲ8(indicating***).
75ForeignProducerQuestionnaire,EDISDoc.***(Oct.21,2016).***reportedthat***.
U.S.ImporterQuestionnaire,EDISDoc.***atResponsetoQuestionIIͲ4.
76CR/PRatTableEͲ2.
77CR/PRatTableIIIͲ3.
78CR/PRatTableIIIͲ3.Withrespecttothe***.ForeignProducerQuestionnaire,EDIS
Doc.***(Oct.21,2016).Suchchangesarealsoreflectedinthefirm’simportdata,withmarkedly
***inbothvolumeandvalueininterim2016thanininterim2015.CR/PRatTableIIIͲ17(indicating
importsofsubjectmerchandisefrom***of***piecesand***ininterim2015versus***pieces
and***ininterim2016).
79ChairmanWilliamsonandCommissionerPinkertnotethattheinformationinthefinal
phaseoftheseinvestigationsdiffersinsignificantwaysfromtheinformationthatledthemto
exclude***inthepreliminaryphaseoftheseinvestigations.Inparticular,theratioof***’ssubject
importstobothitsU.S.shipmentsofdomesticproductanditsU.S.productionaresubstantially
lowernow.Moreover,***.Thus,ChairmanWilliamsonandCommissionerPinkertjointhe
discussionabove.
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thefirm’s***.Finally,thefirmhas***thepetitionsonimportsofIMTDCsfromCanada
andChina.80
***.***isa***ofIMTDCsandaccountedfor***percentbypiecesand***
percentbyweightofrespondingU.S.producers’productionof***IMTDCsin2015. 81
DuringthePOI,***imported***,althoughsuchimportswere***relativetoitsU.S.
shipmentsintermsofbothpiecesandvalue.82Thefirmhadcapitalexpenditures
throughoutthePOIthatwere***,83andthefirmwas***throughoutthePOI.84
Wefindthatappropriatecircumstancesdonotexisttoexcludethisfirmasarelated
party.It***,is***,85andhas***importsofsubjectmerchandiserelativetoitsdomestic
production.Thesefactssuggestthatitsprincipalinterestisindomesticproduction.
***.***isan***withoneofthe***volumesof***IMTDCsintheUnitedStates,
accountingfor***percentofpiecesand***percentofweightof***.86Thefirmreported
***volumesofimportsofsubjectmerchandise***.Onaquantitybasis,itsimportsof
subjectmerchandisewere***,andonavaluebasiswere***.87***capitalexpenditures
***R&Dexpenses.88Thefirm***thepetitions, 89andit***.90
Wefindthatappropriatecircumstancesdonotexisttoexcludethisfirmasarelated
party.***thepetitions,is***,andimported***subjectmerchandiserelativetoits
domesticproduction.Thesefactsindicatethatitsprincipalinterestisindomestic
production.
80CR/PRatTableIIIͲ1.
81CR/PRatTableIIIͲ1.
82CR/PRatTableIIIͲ17(indicatingthatthevolumeinpiecesofimportsofsubject
merchandisefrom***expressedasaratiotothefirm’sU.S.productionwas***percentin2013,
***percentin2014,***percentin2015,***percentininterim2015,and***percentininterim
2016;thevalueofimportsofsubjectmerchandisefrom***asaratiotoitstotalshipmentswas***
percentin2013,***percentin2014,***percentin2015,***percentininterim2015,and***
percentininterim2016).***reportedimportingsubjectmerchandise***.U.S.Importer
Questionnaire,EDISDoc.***atAnswertoQuestionIIͲ4.
83CR/PRatTableVIͲ8(indicatingthat***accountedforthe***highestcapital
expendituresamong***,witha***increaseininterim2016).
84CR/PRatTableEͲ2.
85CR/PRatTableIIIͲ1.
86CR/PRatTableIIIͲ1.
87CR/PRatTableIIIͲ17(***ratioofsubjectimportstoitsU.S.productioninquantitywas
***percentin2013,***percentin2014,***percentin2015,***percentininterim2015,and***
percentininterim2016;byvalue,***ratioofsubjectimportstototalshipmentswas***percentin
2013,***percentin2014,***percentin2015,***percentininterim2015,and***percentin
interim2016).***reportedthat***.U.S.ImporterQuestionnaire,EDISDoc.***atAnswerto
QuestionIIͲ4.
88CR/PRatTableVIͲ8.
89CR/PRatTableIIIͲ1.
90CR/PRatTableEͲ1,TableEͲ2.
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***.***andproduces***IMTDCsintheUnitedStates.91Thefirmaccountedfor
***percentbypiecesand***percentbyweightofrespondingU.S.producers’production
of***in2015. 92Itscapitalexpenditures***,anditsR&Dexpenseswere***.93Thefirm
also***.94Itimportedsubjectmerchandise***,95withthevalueofsuchsubjectimports
***overthePOI,bothabsolutelyandasaratioofshipments. 96Italso***.97
Onbalance,wefindthatappropriatecircumstancesdonotexisttoexcludethefirm
asarelatedparty.Althoughitsvolumeofsubjectimports(inpieces),aswellastheratioof
suchimportstototalshipments,ishigh,thevalueofsuchimports***overthePOI,bothin
absolutetermsandasaratioofdomesticproduction. 98Furtherevidencingitscommitment
todomesticproduction,***.Although***.Thus,onbalance,wefindthatappropriate
circumstancesdonotexisttoexcludethisfirmfromthedomesticindustryasarelated
party.
Consequently,wedefinethedomesticindustryasallU.S.producersofthedomestic
likeproduct,includingfoundriesmanufacturingunfinishedIMTDCs,firmsengagedsolelyin
machiningunfinishedIMTDCsintofinishedIMTDCs,andintegratedproducersofIMTDCs.
IV. NegligibleImports
PursuanttoSection771(24)oftheTariffAct,importsfromasubjectcountryof
merchandisecorrespondingtoadomesticlikeproductthataccountforlessthan3percent
ofallsuchmerchandiseimportedintotheUnitedStatesduringthemostrecent12months
forwhichdataareavailableprecedingthefilingofthepetitionshallbedeemednegligible. 99
NeitherpetitionernorChineseRespondentsdisputethatsubjectimportsfromCanadaand
Chinaexceednegligiblelevels.
91CR/PRatTableIIIͲ1.
92CR/PRatTableIIIͲ1.
93CR/PRatTableVIͲ8(notingcapitalexpendituresof$***in2013,$***in2014,$***in
2015,$***ininterim2015,and$***ininterim2016.ItsR&Dexpenditureswere$***in2013,
$***in2014,$***in2015,$***ininterim2015,and$***ininterim2016).
94CR/PRatTableEͲ1.
95***thatitwasforcedtoobtainsomeIMTDCsfromChinainordertocompete.***.
96CR/PRatTableIIIͲ17(thevalueof***importsofsubjectmerchandisefrom***was$***
in2013,$***in2014,$***in2015,$***ininterim2015,and$***ininterim2016.Theratioof
thevalueofitssubjectimportstoitstotalshipmentsalsodeclinedoverthePOI,from***percentin
2013to***percentin2014,***percentin2015,***percentininterim2015,and***percentin
2016).Intermsofvolume(bypieces),theratioofTBW’simportsofsubjectmerchandisefrom***
toitsdomesticproductionwas***percentin2013,***percentin2014,***percentin2015,***
percentininterim2015,and***percentininterim2016).***reportedthat***.U.S.Importer
Questionnaire,EDISDoc.***atAnswertoQuestionIIͲ4.
97Petitioner’sPosthearingBriefatExhibit21.
98CR/PRatTableIIIͲ17.
9919U.S.C.§§1671b(a),1673b(a),1677(24)(A)(i),1677(24)(B).
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Inthefinalphaseoftheseinvestigations,theCommission’sstaffissuedimporter
questionnairesto91firms,including(1)allfirmsidentifiedaspossibleimportersinthe
petitions(whichwerebasedonabroaderproposedscope)and(2)leadingcompanies
identifiedin***thattogetheraccountedfor61.0percentofthetotalvalueofimportsfrom
allcountriesunderHTSUSstatisticalreportingnumbers8483.50.6000,8483.50.9040,and
8483.90.8080. 100Petitionerreliedinthepetitionsuponthesethreestatisticalreporting
numbersasthebestavailableforitscalculationofU.S.imports,despiteits
acknowledgementthatthesestatisticalreportingnumberslikelyincludedmerchandisethat
wasoutsidethescopeofthepetitions; 101asdiscussedearlier,thescopeofthe
investigationsnarrowedconsiderablyafterthepetitionswerefiled,furtherlimitingthe
utilityofofficialimportstatistics.TheCommissionalsoissuedimporterquestionnairesto
anadditional212firmsthatwereidentifiedaspossibleU.S.producersofIMTDCs. 102
TwentyͲfivefirmsreportedthattheyhadimportedIMTDCsandsubmittedusable
questionnairedata,andanadditional120firmsreportedthattheyhadnotimported
IMTDCssinceJanuary1,2013. 103
Availabledataonimportsforourdeterminationsinthefinalphaseofthese
investigationsarebasedonimporterquestionnaireresponsesof25firmsthatareestimated
toaccountforatleastoneͲhalfofIMTDCimportsfromsubjectandnonsubjectcountriesin
2015. 104Aconclusiveestimateofthecoverageoftheimporterquestionnairesobtainedin
thefinalphaseoftheseinvestigationsiscomplicatedbytheinclusionofbothIMTDCsand
nonͲIMTDCmerchandiseinthevariousrelevantHTSUSstatisticalreportingnumbers,the
largenumberofpotentialimportersidentifiedbyproprietaryCustomsdata,andthe
diversityofsizesandapplicationsoftheproductatissue(makingitdifficulttoidentify
100CRatIVͲ1,IVͲ3;PRatIVͲ1,IVͲ3.Theremaining39.0percentofthetotalvalueofimports
underthethreeprimaryHTSUSstatisticalreportingnumberswereimportedbymorethan3,000
smallerimportingfirms.CRatIVͲ3;PRatIVͲ3.
101Petitions,vol.Iat10,15.
102CRatIVͲ1;PRatIVͲ1.Theposthearingreportdoesnotincludeimportsfrom***.***
hadbeenidentifiedasleadingimportersofIMTDCsfromCanadainthepreliminaryphaseofthese
investigations,and***hadbeenidentifiedasoneoftheleadingimportersofIMTDCsfrom
nonsubjectcountries.CaterpillarandGMnotifiedtheCommissionthatbasedonCommerce’s
preliminarydeterminationstheirimportswereoutsidethescopeoftheinvestigations.CRatIͲ5
n.15;PRatIͲ4n.15;MemorandumINVͲNNͲ089atIͲ6(Dec.7,2015).
103CRatIVͲ1;PRatIVͲ1.Initsbrief,petitionerarguedthattherecorddidnotincludeany
importerquestionnaireresponsesfrom***.Petitioner’sPrehearingBriefat25Ͳ26.Asindicatedin
theposthearingreport,***providedtheCommissionwithinformationabouttheirimportsinthe
interveningtime.CRatIVͲ1n.2;PRatIVͲ1n.2;CR/PRatTableIVͲ1.Duetothefinalscope
language,theCommission’sstaffadjustedtheimporterdatabasefortheposthearingreportto
excludealldatafor***andtoremovemostofthedatareportedby***.Consistentwith
petitioner’sargument,thedatareportedby***,werenotincludedintheimportdatasetforthe
posthearingreportbecauseCommerceexcludedTVDsfromthescopeoftheinvestigations.
Petitioner’sPosthearingBriefatExhibit1at10.
104CRatIVͲ1toIVͲ4;PRatIVͲ1toIVͲ3;CR/PRatTableIVͲ1.
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relevantimportersbybusinesslineoraverageunitvalueofimports). 105Firmsthat
respondedtotheCommission’squestionnaires,eitherwithdataorbycertifyingthatthey
didnotimportsubjectmerchandise,accountedforthefollowingsharesof2015imports(by
value)underthethreeHTSUSstatisticalreportingnumbers(which,asnotedabove,include
merchandiseoutsidethescope),accordingto***:82.2percentofrelevantimportsfrom
Canada;40.0percentofrelevantimportsfromChina;55.7percentofrelevantimportsfrom
subjectcountriescombined;40.4percentofrelevantimportsfromnonsubjectcountries;
and46.2percentofrelevantimportsfromsubjectandnonsubjectcountries.106Fifteenof
theeighteenfirmsidentifiedinthepetitionsasimportersresponded,eitherwithdataorby
certifyingthattheydidnotimporttheIMTDCsatissue. 107
TheavailabledataindicatethatsubjectimportsfromCanadaandChinaareeach
abovenegligiblelevels.Accordingtoquestionnairedatafromthefinalphaseofthese
investigationsforcalendaryear2015,subjectimportsoflargeͲdiameterIMTDCsfrom
Canadaaccountedfor***percentbyvalueoftotalimportsofallsizesofIMTDCs,and
subjectimportsfromChinaaccountedfor***percent.108Consequently,becauseeachof
thesefiguresexceedstheapplicable3percentthreshold,wefindthatsubjectimportsfrom
CanadaandChinaarenotnegligible.
V. Cumulation
Forpurposesofevaluatingthevolumeandeffectsforadeterminationofmaterial
injurybyreasonofsubjectimports,section771(7)(G)(i)oftheTariffActrequiresthe
Commissiontocumulatesubjectimportsfromallcountriesastowhichpetitionswerefiled
and/orinvestigationsselfͲinitiatedbyCommerceonthesameday,ifsuchimportscompete
witheachotherandwiththedomesticlikeproductintheU.S.market.Inassessingwhether
subjectimportscompetewitheachotherandwiththedomesticlikeproduct,the
Commissiongenerallyhasconsideredfourfactors:
105CRatIͲ8;PRatIͲ6.
106CRatIVͲ3;PRatIVͲ3.
107CRatIVͲ4;PRatIVͲ3.
108CR/PRatTableIVͲ4.Questionnairedataforcalendaryear2015,whicharemorealigned
withCommerce’sfinalscopelanguage,donotcorrespondtothe12Ͳmonthperiodprecedingthe
October28,2015filingofthepetitions.Consequently,therecordalsocontainsofficialimport
statisticsfortheOctober2014throughSeptember201512Ͳmonthperiod,althoughthesestatistics
includesubstantialamountsofproductsotherthanthelargeͲdiameterIMTDCswithinthescopeof
theseinvestigations;thesedataalsoshowimportsfromCanadaandChinaarewellabovenegligible
levels,accountingfor16.3percentand22.1percentbyvalueoftotallargeͲdiameterimports,
respectively.Therecordalsocontainsimportdatacompiledfromthequestionnairesinthe
preliminaryphaseoftheinvestigationsfortheperiodOctober2014toSeptember2015,whichare
overstatedbecausetheydonotreflectcertainscopeexclusionsthatCommercesubsequentlymade;
thesedatashowthatsubjectimportsfromCanadaandChinaaccountedfor***percentand
***percent,respectively,oftotalimportsofallsizesofIMTDCs.CR/PRatTableIVͲ4.
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(1) thedegreeoffungibilitybetweensubjectimportsfromdifferent
countriesandbetweensubjectimportsandthedomesticlike
product,includingconsiderationofspecificcustomerrequirements
andotherqualityrelatedquestions;
(2) thepresenceofsalesorofferstosellinthesamegeographicmarkets
ofsubjectimportsfromdifferentcountriesandthedomesticlike
product;
(3) theexistenceofcommonorsimilarchannelsofdistributionfor
subjectimportsfromdifferentcountriesandthedomesticlike
product;and
(4) whetherthesubjectimportsaresimultaneouslypresentinthe
market.109
Whilenosinglefactorisnecessarilydeterminative,andthelistoffactorsisnot
exclusive,thesefactorsareintendedtoprovidetheCommissionwithaframeworkfor
determiningwhethersubjectimportscompetewitheachotherandwiththedomesticlike
product.110Onlya“reasonableoverlap”ofcompetitionisrequired.111
PetitionerarguesinfavorofcumulatingsubjectimportsfromCanadaandChina, 112
astheCommissiondidinitspreliminarydeterminations. 113ChineseRespondentsdonot
contestcumulationforpurposesoftheCommission’spresentmaterialinjuryanalysis.
WefinditappropriatetoconsidersubjectimportsfromCanadaandChinaona
cumulatedbasisintheseinvestigations,becausethestatutorycriteriaforcumulationare
109SeeCertainCastͲIronPipeFittingsfromBrazil,theRepublicofKorea,andTaiwan,Inv.
Nos.731ͲTAͲ278to280(Final),USITCPub.1845(May1986),aff’d,FundicaoTupy,S.A.v.United
States,678F.Supp.898(Ct.Int’lTrade),aff’d,859F.2d915(Fed.Cir.1988).
110See,e.g.,WielandWerke,AGv.UnitedStates,718F.Supp.50(Ct.Int’lTrade1989).
111TheStatementofAdministrativeAction(“SAA”)totheUruguayRoundAgreementsAct
(“URAA”),expresslystatesthat“thenewsectionwillnotaffectcurrentCommissionpracticeunder
whichthestatutoryrequirementissatisfiedifthereisareasonableoverlapofcompetition.”H.R.
Rep.No.103Ͳ316,Vol.Iat848(1994)(citingFundicaoTupy,678F.Supp.at902);seeGossGraphic
Sys.,Inc.v.UnitedStates,33F.Supp.2d1082,1087(Ct.Int’lTrade1998)(“cumulationdoesnot
requiretwoproductstobehighlyfungible”);WielandWerke,718F.Supp.at52(“Completely
overlappingmarketsarenotrequired.”).
112Petitioner’sPrehearingBriefat7Ͳ9.
113USITCPub.4587at28Ͳ30.
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satisfied. 114Asaninitialmatter,petitionerfiledthepetitionswithrespecttobothsubject
countriesonthesameday,October28,2015. 115
Fungibility.Allrespondingdomesticproducers,nearlyallrespondingimporters,and
mostrespondingpurchasersreportedthatlargeͲdiameterIMTDCsfromCanada,China,and
theUnitedStatesarealwaysorfrequentlyinterchangeable.116Majoritiesorpluralitiesof
purchasersfoundthedomesticlikeproducttobecomparablewithsubjectimportsfrom
Canadaforeachof14nonͲpricecharacteristics,thedomesticlikeproductandsubject
importsfromChinatobecomparableforeightofthe14characteristics,andsubjectimports
fromCanadaandChinatobecomparablefornineofthe14characteristics. 117
ChannelsofDistribution.QuestionnairedataindicatethatIMTDCsfromCanada,
China,andtheUnitedStateswereprimarilysoldtodistributorsandtoendusers/original
equipmentmanufacturers(“OEMs”). 118
GeographicOverlap.TherecordindicatesthatIMTDCsfromCanada,China,andthe
UnitedStatesweresoldinallregionsoftheUnitedStates.119
SimultaneousPresenceinMarket.Questionnairedataindicatethatsubjectimports
fromCanadawerepresentintheU.S.marketthroughoutthePOIalongwithsubject
importsfromChinaandthedomesticlikeproduct.120
Conclusion.Basedontherecord,wefindthatsubjectimportsfromCanadaand
ChinaarefungiblewithoneanotherandwiththedomesticlikeproductandthatlargeͲ
diameterIMTDCsmanufacturedinCanada,China,andtheUnitedStatesweresold
simultaneouslyinoverlappinggeographicmarketsandthroughsimilarchannelsof
distribution.Becausetherecordindicatesareasonableoverlapofcompetitionamong
IMTDCsmadeinCanada,China,andtheUnitedStates,wecumulatesubjectimportsfrom
CanadaandChinaforpurposesofouranalysisofmaterialinjurybyreasonofsubject
imports.
VI. NoMaterialInjurybyReasonofSubjectImports
Basedontherecordinthefinalphaseoftheseinvestigations,wefindthatan
industryintheUnitedStatesisnotmateriallyinjuredbyreasonofimportsoflargeͲdiameter
114Weobservethattheseinvestigationsinvolveantidumpingdutyfindingsregarding
IMTDCsfrombothCanadaandChinaandsubsidyfindingssolelyregardingIMTDCsfromChina.We
havepreviouslyexplainedwhywearecontinuingourlongstandingpracticeofcrossͲcumulating
subsidizedimportswithdumpedimports.SeePolyethyleneTerephthalate(PET)ResinfromCanada,
China,India,andOman,Inv.Nos.701ͲTAͲ531to532and731ͲTAͲ1270to1273(Final),USITCPub.
4604at9Ͳ11(Apr.2016).
115Noneofthestatutoryexceptionstocumulationapplies.
116CR/PRatTableIIͲ9.
117CR/PRatTableIIͲ8.
118CR/PRatTableIIͲ1.
119CR/PRatTableIIͲ2,TableIVͲ5.
120CR/PRatTableIIͲ1,TablesIVͲ2toIVͲ3.
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IMTDCsfromCanadaandChinathatCommercehasfoundtobesoldintheUnitedStatesat
lessthanfairvalueandsubsidizedbythegovernmentofChina.
A. LegalStandards
Inthefinalphaseofantidumpingandcountervailingdutyinvestigations,the
CommissiondetermineswhetheranindustryintheUnitedStatesismateriallyinjuredor
threatenedwithmaterialinjurybyreasonoftheimportsunderinvestigation. 121Inmaking
thisdetermination,theCommissionmustconsiderthevolumeofsubjectimports,their
effectonpricesforthedomesticlikeproduct,andtheirimpactondomesticproducersof
thedomesticlikeproduct,butonlyinthecontextofU.S.productionoperations. 122The
statutedefines“materialinjury”as“harmwhichisnotinconsequential,immaterial,or
unimportant.” 123Inassessingwhetherthedomesticindustryismateriallyinjuredbyreason
ofsubjectimports,weconsiderallrelevanteconomicfactorsthatbearonthestateofthe
industryintheUnitedStates.124Nosinglefactorisdispositive,andallrelevantfactorsare
considered“withinthecontextofthebusinesscycleandconditionsofcompetitionthatare
distinctivetotheaffectedindustry.” 125
AlthoughthestatuterequirestheCommissiontodeterminewhetherthedomestic
industryis“materiallyinjuredorthreatenedwithmaterialinjurybyreasonof”unfairly
tradedimports, 126itdoesnotdefinethephrase“byreasonof,”indicatingthatthisaspectof
theinjuryanalysisislefttotheCommission’sreasonableexerciseofitsdiscretion. 127In
identifyingacausallink,ifany,betweensubjectimportsandmaterialinjurytothedomestic
industry,theCommissionexaminesthefactsofrecordthatrelatetothesignificanceofthe
volumeandpriceeffectsofthesubjectimportsandanyimpactofthoseimportsonthe
conditionofthedomesticindustry.Thisevaluationunderthe“byreasonof”standardmust
ensurethatsubjectimportsaremorethanaminimalortangentialcauseofinjuryandthat
12119U.S.C.§§1671d(b),1673d(b).TheTradePreferencesExtensionActof2015,Pub.
114Ͳ27,amendedtheprovisionsoftheTariffActpertainingtoCommissiondeterminationsof
materialinjuryandthreatofmaterialinjurybyreasonofsubjectimportsincertainrespects.We
appliedtheseamendmentshere.
12219U.S.C.§1677(7)(B).TheCommission“mayconsidersuchothereconomicfactorsas
arerelevanttothedetermination”butshall“identifyeach{such}factor...andexplaininfullits
relevancetothedetermination.”19U.S.C.§1677(7)(B).
12319U.S.C.§1677(7)(A).
12419U.S.C.§1677(7)(C)(iii).
12519U.S.C.§1677(7)(C)(iii).
12619U.S.C.§§1671d(a),1673d(a).
127AngusChemicalCo.v.UnitedStates,140F.3d1478,1484Ͳ85(Fed.Cir.1998)(“{T}he
statutedoesnot‘compelthecommissioners’toemploy{aparticularmethodology}.”),aff’g,944F.
Supp.943,951(Ct.Int’lTrade1996).
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thereisasufficientcausal,notmerelyatemporal,nexusbetweensubjectimportsand
materialinjury.128
Inmanyinvestigations,thereareothereconomicfactorsatwork,someorallof
whichmayalsobehavingadverseeffectsonthedomesticindustry.Sucheconomicfactors
mightincludenonsubjectimports;changesintechnology,demand,orconsumertastes;
competitionamongdomesticproducers;ormanagementdecisionsbydomesticproducers.
ThelegislativehistoryexplainsthattheCommissionmustexaminefactorsotherthan
subjectimportstoensurethatitisnotattributinginjuryfromotherfactorstothesubject
imports,therebyinflatinganotherwisetangentialcauseofinjuryintoonethatsatisfiesthe
statutorymaterialinjurythreshold. 129Inperformingitsexamination,however,the
Commissionneednotisolatetheinjurycausedbyotherfactorsfrominjurycausedby
unfairlytradedimports. 130Nordoesthe“byreasonof”standardrequirethatunfairly
128TheFederalCircuit,inaddressingthecausationstandardofthestatute,observedthat
“{a}slongasitseffectsarenotmerelyincidental,tangential,ortrivial,theforeignproductsoldat
lessthanfairvaluemeetsthecausationrequirement.”NipponSteelCorp.v.USITC,345F.3d1379,
1384(Fed.Cir.2003).ThiswasfurtherratifiedinMittalSteelPointLisasLtd.v.UnitedStates,542
F.3d867,873(Fed.Cir.2008),wheretheFederalCircuit,quotingGeraldMetals,Inc.v.United
States,132F.3d716,722(Fed.Cir.1997),statedthat“thiscourtrequiresevidenceintherecord‘to
showthattheharmoccurred“byreasonof”theLTFVimports,notbyreasonofaminimalor
tangentialcontributiontomaterialharmcausedbyLTFVgoods.’”SeealsoNipponSteelCorp.v.
UnitedStates,458F.3d1345,1357(Fed.Cir.2006);TaiwanSemiconductorIndustryAss’nv.USITC,
266F.3d1339,1345(Fed.Cir.2001).
129SAAat851Ͳ52(“{T}heCommissionmustexamineotherfactorstoensurethatitisnot
attributinginjuryfromothersourcestothesubjectimports.”);S.Rep.96Ͳ249at75(1979)(the
Commission“willconsiderinformationwhichindicatesthatharmiscausedbyfactorsotherthan
lessͲthanͲfairͲvalueimports.”);H.R.Rep.96Ͳ317at47(1979)(“inexaminingtheoverallinjurybeing
experiencedbyadomesticindustry,theITCwilltakeintoaccountevidencepresentedtoitwhich
demonstratesthattheharmattributedbythepetitionertothesubsidizedordumpedimportsis
attributabletosuchotherfactors;”thosefactorsinclude“thevolumeandpricesofnonsubsidized
importsorimportssoldatfairvalue,contractionindemandorchangesinpatternsofconsumption,
traderestrictivepracticesofandcompetitionbetweentheforeignanddomesticproducers,
developmentsintechnologyandtheexportperformanceandproductivityofthedomestic
industry”);accordMittal,542F.3dat877.
130SAAat851Ͳ52(“{T}heCommissionneednotisolatetheinjurycausedbyotherfactors
frominjurycausedbyunfairimports.”);TaiwanSemiconductor,266F.3dat1345(“{T}he
Commissionneednotisolatetheinjurycausedbyotherfactorsfrominjurycausedbyunfairimports
....Rather,theCommissionmustexamineotherfactorstoensurethatitisnotattributinginjury
fromothersourcestothesubjectimports.”(emphasisinoriginal));AsociaciondeProductoresde
SalmonyTruchadeChileAGv.UnitedStates,180F.Supp.2d1360,1375(Ct.Int’lTrade2002)
(“{t}heCommissionisnotrequiredtoisolatetheeffectsofsubjectimportsfromotherfactors
contributingtoinjury”ormake“brightͲlinedistinctions”betweentheeffectsofsubjectimportsand
othercauses.);seealsoSoftwoodLumberfromCanada,Inv.Nos.701ͲTAͲ414and731ͲTAͲ928
(Remand),USITCPub.3658at100Ͳ01(Dec.2003)(Commissionrecognizedthat“{i}fanallegedother
factorisfoundnottohaveorthreatentohaveinjuriouseffectstothedomesticindustry,i.e.,itis
notan‘othercausalfactor,’thenthereisnothingtofurtherexamineregardingattributionto
(Continued...)
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tradedimportsbethe“principal”causeofinjuryorcontemplatethatinjuryfromunfairly
tradedimportsbeweighedagainstotherfactors,suchasnonsubjectimports,whichmaybe
contributingtooverallinjurytoanindustry.131Itisclearthattheexistenceofinjurycaused
byotherfactorsdoesnotcompelanegativedetermination. 132
Assessmentofwhethermaterialinjurytothedomesticindustryis“byreasonof”
subjectimports“doesnotrequiretheCommissiontoaddressthecausationissueinany
particularway”aslongas“theinjurytothedomesticindustrycanreasonablybeattributed
tothesubjectimports”andtheCommission“ensure{s}thatitisnotattributinginjuryfrom
othersourcestothesubjectimports.” 133134Indeed,theFederalCircuithasexaminedand
affirmedvariousCommissionmethodologiesandhasdisavowed“rigidadherencetoa
specificformula.” 135
(…Continued)
injury”)(citingGeraldMetals,132F.3dat722(thestatute“doesnotsuggestthatanimporterof
LTFVgoodscanescapecountervailingdutiesbyfindingsometangentialorminorcauseunrelatedto
theLTFVgoodsthatcontributedtotheharmfuleffectsondomesticmarketprices.”)).
131S.Rep.96Ͳ249at74Ͳ75;H.R.Rep.96Ͳ317at47.
132SeeNippon,345F.3dat1381(“anaffirmativematerialͲinjurydeterminationunderthe
statuterequiresnomorethanasubstantialͲfactorshowing.Thatis,the‘dumping’neednotbethe
soleorprincipalcauseofinjury.”).
133Mittal,542F.3dat877Ͳ78;seealsoid.at873(“WhiletheCommissionmaynotenteran
affirmativedeterminationunlessitfindsthatadomesticindustryismateriallyinjured‘byreasonof’
subjectimports,theCommissionisnotrequiredtofollowasinglemethodologyformakingthat
determination...{andhas}broaddiscretionwithrespecttoitschoiceofmethodology.”)(citing
UnitedStatesSteelGroupv.UnitedStates,96F.3d1352,1362(Fed.Cir.1996)andS.Rep.96Ͳ249at
75).InitsdecisioninSwiffͲTrainv.UnitedStates,792F.3d1355(Fed.Cir.2015),theFederalCircuit
affirmedtheCommission’scausationanalysisascomportingwiththeCourt’sguidanceinMittal.
134CommissionersPinkertandKieffdonotjointhisparagraphorthefollowingthree
paragraphs.TheypointoutthattheFederalCircuit,inBratsk,444F.3d1369,andMittal,heldthat
theCommissionisrequired,incertaincircumstanceswhenanalyzingpresentmaterialinjury,to
consideraparticularissuewithrespecttotheroleofnonsubjectimports,withoutrelianceupon
presumptionsorrigidformulas.TheCourthasnotprescribedaspecificmethodofexpositionfor
thisconsideration.Mittalexplainsasfollows:
WhatBratskheldisthat“wherecommodityproductsareatissueandfairlytraded,price
competitive,nonͲsubjectimportsareinthemarket,”theCommissionwouldnotfulfillits
obligationtoconsideranimportantaspectoftheproblemifitfailedtoconsiderwhether
nonͲsubjectornonͲLTFVimportswouldhavereplacedLTFVsubjectimportsduringthe
periodofinvestigationwithoutacontinuingbenefittothedomesticindustry.444F.3dat
1369.Underthosecircumstances,BratskrequirestheCommissiontoconsiderwhether
replacementoftheLTFVsubjectimportsmighthaveoccurredduringtheperiodof
investigation,anditrequirestheCommissiontoprovideanexplanationofitsconclusion
withrespecttothatfactor.
542F.3dat878.
135NucorCorp.v.UnitedStates,414F.3d1331,1336,1341(Fed.Cir.2005);seealsoMittal,
542F.3dat879(“BratskdidnotreadintotheantidumpingstatuteaProcrusteanformulafor
determiningwhetheradomesticinjurywas‘byreason’ofsubjectimports.”).
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TheFederalCircuit’sdecisionsinGeraldMetals,Bratsk,andMittalallinvolvedcases
wheretherelevant“otherfactor”wasthepresenceinthemarketofsignificantvolumesof
priceͲcompetitivenonsubjectimports.TheCommissioninterpretedtheFederalCircuit’s
guidanceinBratskasrequiringittoapplyaparticularadditionalmethodologyfollowingits
findingofmaterialinjuryincasesinvolvingcommodityproductsandasignificantmarket
presenceofpriceͲcompetitivenonsubjectimports. 136Theadditional“replacement/benefit”
testlookedatwhethernonsubjectimportsmighthavereplacedsubjectimportswithout
anybenefittotheU.S.industry.TheCommissionappliedthatspecificadditionaltestin
subsequentcases,includingtheCarbonandCertainAlloySteelWireRodfromTrinidadand
TobagodeterminationunderlyingtheMittallitigation.
MittalclarifiedthattheCommission’sinterpretationofBratskwastoorigidand
madeclearthattheFederalCircuitdoesnotrequiretheCommissiontoapplyanadditional
testnoranyonespecificmethodology;instead,thecourtrequirestheCommissiontohave
“evidenceintherecord”to“showthattheharmoccurred‘byreasonof’theLTFVimports,”
andrequiresthattheCommissionnotattributeinjuryfromnonsubjectimportsorother
factorstosubjectimports. 137Accordingly,wedonotconsiderourselvesrequiredtoapply
thereplacement/benefittestthatwasincludedinCommissionopinionssubsequentto
Bratsk.
TheprogressionofGeraldMetals,Bratsk,andMittalclarifiesthat,incasesinvolving
commodityproductswherepriceͲcompetitivenonsubjectimportsareasignificantfactorin
theU.S.market,theCourtwillrequiretheCommissiontogivefullconsideration,with
adequateexplanation,tononͲattributionissueswhenitperformsitscausationanalysis. 138
Thequestionofwhetherthematerialinjurythresholdforsubjectimportsissatisfied
notwithstandinganyinjuryfromotherfactorsisfactual,subjecttoreviewunderthe
substantialevidencestandard.Congresshasdelegatedthisfactualfindingtothe
Commissionbecauseoftheagency’sinstitutionalexpertiseinresolvinginjuryissues.139
136Mittal,542F.3dat875Ͳ79.
137Mittal,542F.3dat873(quotingGeraldMetals,132F.3dat722),875Ͳ79&n.2
(recognizingtheCommission’salternativeinterpretationofBratskasaremindertoconductanonͲ
attributionanalysis).
138Tothatend,aftertheFederalCircuitissueditsdecisioninBratsk,theCommissionbegan
topresentpublishedinformationorsendoutinformationrequestsinthefinalphaseof
investigationstoproducersinnonsubjectcountriesthataccountedforsubstantialsharesofU.S.
importsofsubjectmerchandise(if,infact,therewerelargenonsubjectimportsuppliers).Inorder
toprovideamorecompleterecordfortheCommission’scausationanalysis,theserequeststypically
seekinformationoncapacity,production,andshipmentsoftheproductunderinvestigationinthe
majorsourcecountriesthatexporttotheUnitedStates.TheCommissionplanstocontinueutilizing
publishedorrequestedinformationinthefinalphaseofinvestigationsinwhichtherearesubstantial
levelsofnonsubjectimports.
139Mittal,542F.3dat873;Nippon,458F.3dat1350,citingU.S.Steel,96F.3dat1357;S.
Rep.96Ͳ249at75(“ThedeterminationoftheITCwithrespecttocausationis...complexand
difficult,andisamatterforthejudgmentoftheITC.”).
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B. ConditionsofCompetitionandtheBusinessCycle
Thefollowingconditionsofcompetitioninformouranalysisofwhetherthereis
materialinjurybyreasonofsubjectimports.
1. DemandConsiderations
DemandforIMTDCsisderivedfromdemandinthevarioussectorsinwhichtheyare
used,includingheating,ventilation,andairconditioning(“HVAC”);mining;upstreamoiland
gas;buildingandroadconstruction;forestryandlogging;materialhandling;andgeneral
industrialandagriculturalsectors.140Asdiscussedabove,IMTDCsareincorporatedintoa
widerangeofmachineryandequipment,suchaspumpjacks,crushersandmixers,
conveyorsystems,fansandblowers,pumps,andcompressors. 141Questionnaire
respondentsreportedfewsubstitutesforIMTDCs,andtheyreportedthatIMTDCsgenerally
accountforasmallshareofthecostofthedownstreamproductsinwhichtheyare
utilized. 142
UnfinishedIMTDCsareprimarilyusedintheproductionoffinishedIMTDCs,sothe
marketforunfinishedIMTDCsisprimarilycomprisedoffirmsthatfinishIMTDCs. 143
FinishedIMTDCsgenerallyaresoldtoeitherOEMsthatmanufacturemachineryor
distributorsthattypicallyresellthemtosmallOEMsorinthereplacementpartsmarket.144
Ofthe24purchaserssubmittingusablequestionnairedataintheseinvestigations,16are
distributorsthatselltoawidevarietyofOEMsandotherindustrialcustomers,including
materialhandlingequipmentmanufacturers,andmembersoftheHVAC,agricultural,
generalmanufacturing,mining,petrochemicals,foodprocessing,automotive,andoiland
gasindustries. 145Eightoftherespondingpurchasersareendusersthatproducevarious
140CRatIIͲ1;PRatIIͲ1.Petitionerestimatedthatthesharesofthevarioussectorsinthe
overallU.S.beltdrivesmarketareasfollows:generalindustrial(***percent);airhandling(***
percent);pumpandcompressor(***percent);oilandgas(***percent);materialshandling(***
percent);constructionandagriculture(***percent);andsandandgravel(***percent).CRatIIͲ9;
PRatIIͲ7.
141CRatIIͲ1;PRatIIͲ1.Theoilindustryisasignificantuseroflargesheavesinupstream
applicationssuchasdrilling.Inmaterialhandlingapplications,conveyorpulleysareusedin
applicationssuchasmining,productpackaging,foodprocessing,powergeneration,andrecycling.
Intheagriculturalsector,sheavesandbeltdrivesareusedinequipmentrangingfromcombinesand
harvesterstoconveyorbelts,whereasinHVACapplicationsIMTDCsareoftenusedtotransmit
powerfromamotortoafan.Flywheelsmaybeusedwithapumpjackintheoilindustryorin
elevators.CRatIͲ32toIͲ34;PRatIͲ28toIͲ31;CR/PRatFiguresIͲ11toIͲ13.
142CRatIIͲ9,IIͲ11;PRatIIͲ7,IIͲ9.
143CRatIͲ31;PRatIͲ28.
144IMTDCusersneedtoreplacebeltsmorefrequentlybutoccasionallyalsoneedtoreplace
sheavesthathavewornout.CRatIͲ31;PRatIͲ28.
145CRatIIͲ1toIIͲ2;PRatIIͲ1.
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productsincludingHVAC,refrigeration,conveyorequipment,vibratingscreens,and
agriculturalequipment.146
InresponsetotheCommission’squestionregardingdemandtrendsforIMTDCsin
theUnitedStatessinceJanuary2013,questionnairerespondentsreportedavarietyof
answers,althoughfewreportedthatdemandhadincreasedduringthisperiod. 147
Accordingtoquestionnairedata,apparentU.S.consumption,byvalue,increasedfrom$***
in2013to$***in2014,declinedto$***in2015(afigurelowerthanin2013),andwas
lowerininterim2016($***)thanininterim2015($***).148
2. SupplyConsiderations
ThepartiesagreethattheCommissionisboundbyCommerce’sscope
determination, 149whichdefinesthecountryoforiginofsubjectmerchandiseasthelocation
wheretheIMTDCswerecast.150DuringthePOI,theU.S.IMTDCsmarketwassuppliedby
thedomesticindustry,subjectimports,importsoflargeͲdiameterIMTDCsfromnonsubject
sources,andimportsofsmallͲdiameterIMTDCsfromsubjectandnonsubjectcountries. 151
Domesticindustry:Intheseinvestigations,theCommissionissuedU.S.producer
questionnairesto233foundries,integratedfirms,andfinishers;thesefirmswereidentified
aspotentialU.S.producersofunfinishedand/orfinishedIMTDCsbyTBWinitspetitions, 152
146CRatIIͲ2;PRatIIͲ1.
147CR/PRatTableIIͲ3.Threepurchasersreportedreduceddemandintheenergysector,
specificallyIMTDCsforOEMmachinesandsparepartsusedinthecoal,oil,andgasindustries.***
reportedreduceddemandforIMTDCsduetodownturnsincertainsectorsoftheeconomyandthe
offshoringofproductionofmachinesthatuseIMTDCs.Purchaser***reportedincreasedoverall
demandforHVACapplications(becauseofnewhomeconstructionandrepairandreplacementsin
olderhomes),andpurchaser***reportedgrowingdemandforIMTDCsinmaterialhandling
conveyors.CRatIIͲ10toIIͲ11;PRatIIͲ9.
148AsexplainedinourvolumediscussioninsectionVI.Cbelow,werelyprimarilyonvalueͲ
basedindicatorsasthebestmeasurefortheproductintheseinvestigations,althoughwealsohave
consideredquantityͲbasedindicators(inpieces)whereappropriate.Intermsofpieces,apparent
U.S.consumptionincreasedfrom***in2013to***in2014,decreasedto***in2015(afigure
higherthanin2013),andwaslowerininterim2016(***)thanininterim2015(***).CR/PRatTable
IVͲ7.Mostfirms(10of11U.S.producers,20of23importers,and18of24purchasers)reported
thattheIMTDCmarketisnotsubjecttobusinesscycles.CRatIIͲ9;PRatIIͲ7.
149See,e.g.,Petitioner’sPostconf.Briefat20Ͳ24;Confer.Tr.at75Ͳ77,112Ͳ113;Baldor’s
Postconf.BriefatExhibit1atquestion3.
150See,e.g.,81Fed.Reg.75,032(Oct.28,2016);81Fed.Reg.75,037(Oct.28,2016);81Fed.
Reg.75,039(Oct.28,2016).
151CR/PRatTableIVͲ7.
152Inthepetitions,TBWidentifiedeightfirmsasproducersofIMTDCsintheUnitedStates:
TBW;Goldens’FoundryandMachineCompany(“Goldens”);MartinSprocket;B&B;Baldor;Custom
Machine&ToolCo.,Inc.(“Custom”);MaureyManufacturingCorp.(“Maurey”);andTorque
Transmission.Petitions,vol.IatExhibit1Ͳ1toIͲ3.***didnotsubmitaquestionnaireresponse,and
(Continued...)
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byinterestedpartiesparticipatingintheseinvestigations,orbyotheravailableindustry
sources.153SeventyͲsevenofthesefirmsreportedthattheydonotproduceIMTDCs. 154
FiveintegratedfirmsthatbothcastandfinishIMTDCssubmittedquestionnaireresponses
(Bremen,EnDyn,Goldens,MartinSprocket,andTBW).155FivefirmsthatfinishIMTDCsin
theUnitedStatesfrompurchasedcastingssubmittedusableU.S.producerquestionnaire
responses(B&B,Baldor,HiͲLo,Maurey,andSterling).156157Onefoundry(Waupaca)
submittedacompletequestionnaireresponse,andfourU.S.foundriesreportedthatthey
wereunabletoprovidecompletequestionnaireresponses(Brillion,GreatLakesCastings,
Osco,andTorrance).158
(…Continued)
***reportedthatitonlymakespulleysfromaluminumandmoldedplastic.CRatIͲ5n.13;PRatIͲ4
n.13. 153CRatIIIͲ1;PRatIIIͲ1;ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ8&n.17;
USITCPub.4587at5Ͳ6&n.17;Caterpillar’sPostconferenceBriefat7Ͳ9(alsoarguingthatthereare
atleast465foundriescastingironproductsintheUnitedStates).
154CRatIIIͲ1n.1;PRatIIIͲ1n.1.
155CRatIIIͲ1toIIIͲ2;PRatIIIͲ1.
156CRatIIIͲ2;PRatIIIͲ1.InaNovember12,2015submissionallegingthatthepetitions
lackedadequatesupportfromthedomesticindustry,Caterpillaridentifiedoverthreedozen
possibleU.S.producers,anditsubmittedalistof***ofitsmajordomesticsuppliersofIMTDCs:
***.ConfidentialPreliminaryViews,EDISDoc.571266at5Ͳ8&n.17;USITCPub.4587at5Ͳ6&n.17.
Inthefinalphaseoftheseinvestigations,CaterpillarnotifiedtheCommissionthatwiththemost
recentchangeinthescope,theitemsitreportedimportingarenolongerconsideredsubject
merchandise.FourofthefirmsthatCaterpillarpreviouslyhadidentifiedasitsmajordomestic
suppliersoffinishedIMTDCs(***)reportedthattheydonotproduceIMTDCs,and***ofthefirms
(***)didnotrespondtothequestionnaire.CRatIIIͲ1toIIIͲ2atn.1;PRatIIIͲ1n.1.
157BothpetitionerandChineseRespondentsquestionedtheU.S.producerquestionnaire
responseof***asinconsistentwithotherreportedinformation.Aspetitionerargued,***
manufacturescertainflywheelswithringgearthatcorrespondtoitemsthatnowareexpressly
outsidetheinvestigations’scope,andthecustomersthat***identifiedasaccountingforalarge
majorityofitssalesarenotpurchasingU.S.ͲproducedIMTDCs.Inthefinalreport,dataforthisfirm
arenotincludedinthedomesticindustrydatabasebasedoninformationindicatingthatthefirm
doesnotmanufacturethedomesticlikeproduct.CRatIIIͲ2n.2;PRatIIIͲ1n.2;Petitioner’s
PosthearingBriefatExhibit1at10Ͳ11;Petitioner’sPrehearingBriefat38Ͳ40;ChineseRespondents’
PrehearingBriefat26.
158CRatIͲ4,IIIͲ2toIIIͲ3;PRatIͲ4,IIIͲ1toIIIͲ2.InaNovember12,2015submissionalleging
thatthepetitionslackedadequatesupportfromthedomesticindustry,Baldoridentifiedseven
additionalU.S.foundriesmanufacturingunfinishedIMTDCsandonefinisher.Confidential
PreliminaryViews,EDISDoc.571266at5Ͳ8&n.17;USITCPub.4587at5Ͳ6&n.17.Oftheseven
firmsidentifiedbyBaldorasmajordomesticsuppliersofunfinishedIMTDCs,***,afirmthat
accountedfor***percentofBaldor’spurchasesofunfinishedIMTDCsin2015,supplieda
completedU.S.producerquestionnairetotheCommission.CRatIIIͲ1n.1;PRatIIIͲ1n.1.
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PetitionerandChineseRespondentsarguedthatWaupaca’sU.S.producer
questionnairedataareanomalous. 159Waupacareportedthatitsfoundryproduced***of
castingsin2015,lessthan***percentofwhichitbelievedcorrespondedtotheIMTDCsat
issueintheseinvestigations. 160BecauseWaupaca’squestionnaireresponseisbelievedto
beoverstatedbytheinclusionofproductsthatareoutsidethedomesticlikeproduct
definition, 161itsdataandotherfirmͲspecificinformationarenotaggregatedwiththe
domesticindustry’sdatainthebodyoftheCommission’sreport,althoughWaupaca’s
unfinishedIMTDCsthatwerefinishedby***arereflectedinthedomesticindustry’sdataas
finishedIMTDCs.162Thus,theavailableinformationonthedomesticindustry’soperations
forourfinaldeterminationsisbasedonthequestionnaireresponsesof10producersthat
areestimatedtohaveaccountedforapproximatelytwoͲthirdsofU.S.unfinishedIMTDC
productionandapproximately90.0percentofU.S.productionoffinishedIMTDCsin
2015. 163
Thedomesticindustryaccountedforbetween***percentand***percentofthe
U.S.market,byvalue,andalmost***,bypieces,betweenJanuary2013andJune2016. 164
Thedomesticindustryincludesfoundries,finishers,andsomefirmswithintegrated
operationsthatmanufacturebothunfinishedandfinishedIMTDCs,asdiscussedabove. 165
Subjectimports:AsexplainedinmoredetailinourthreatdiscussioninsectionVII
below,informationontheindustriesproducingIMTDCsinthesubjectcountriesisprimarily
basedonforeignproducerquestionnairedataforoneformerproducerinCanada(Baldor
Canada)166andsevenproducersofIMTDCsinChina, 167assupplementedwithother
availablerecordevidence.U.S.producerBaldorpermanentlyclosedtheIMTDCsprocessing
facilityofitsaffiliateinChina(BaldorMaska)inDecember2014anddisposedofallofthe
equipment.168BaldorcloseditsIMTDCsfinishingfacilityinCanada(BaldorCanada)inMay
2016andtransferredallofthefinishingequipmentfromthisfacilitytoitsproduction
facilitiesinNorthCarolina. 169
159Petitioner’sPosthearingBriefatExhibit1at50Ͳ52;Petitioner’sPrehearingBriefat36Ͳ38;
ChineseRespondents’PrehearingBriefat24Ͳ25.
160CRatIIIͲ2;PRatIIIͲ1toIIIͲ2.
161OfthetoptenfirmsthatWaupacaidentifiedasitsmainunfinishedIMTDCcustomers,
threefirms(***)reportedthattheydonotpurchaseIMTDCscorrespondingtothedomesticlike
productdefinition.Inaddition,anotherfirm(***)doesnotlikelymanufacturethedomesticlike
productbasedonareviewofthefirm’swebpages,and***reportedsourcingIMTDCsonlyfrom
U.S.finishersandnotfromcastingoperations.CRatIͲ4,IͲ7toIͲ8,IIIͲ2toIIIͲ3atn.3;PRatIͲ4,IͲ5to
IͲ6,IIIͲ1toIIIͲ2atn.3.
162CRatIIIͲ2;PRatIIIͲ2.
163CRatIIIͲ1;PRatIIIͲ1.
164CR/PRatTableIVͲ7.
165CR/PRatTableIIIͲ1.
166CRatVIIͲ3;PRatVIIͲ3.
167CRatVIIͲ11;PRatVIIͲ7.
168Confer.Tr.at22;CR/PRatTableIIIͲ3.
169CRatVIIͲ4;PRatVIIͲ3.
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Cumulatedsubjectimportsaccountedforapproximately***oftheU.S.marketby
valueandbypiecesduringthePOI.LargeͲdiametersubjectimportsfromChinaaccounted
formostoftheimportsofsubjectmerchandise,withlargeͲdiameterIMTDCsfromCanada
accountingforasmallershareintermsofbothvalueandpieces.170
Nonsubjectimports:Intheseinvestigations,nonsubjectimportsincludeimportsof
largeͲdiameterIMTDCsfromnonsubjectsourcesandimportsofoutͲofͲscope
smallͲdiameterIMTDCsfromsubjectandnonsubjectcountries.Nonsubjectimportsof
largeͲdiameterIMTDCsaccountedforbetween***percentand***percentofapparent
U.S.consumption,byvalue,betweenJanuary2013andJune2016,whereasimportsof
smallͲdiameterIMTDCsfromsubjectandnonsubjectcountriesaccountedforbetween
***percentand***percentofthemarket,byvalue,duringthisperiod. 171Mexicowasone
ofthelargestreportedsourcesofnonsubjectimportsofIMTDCs,accountingin2015for***
percentoftotalU.S.importsoflargeͲdiameterIMTDCs,byvalue,***percentoftotalU.S.
importsofsmallͲdiameterIMTDCs,and***percentoftotalU.S.importsofIMTDCs. 172
TBWhasanaffiliatethatmanufacturesIMTDCsinMexico,its***.173
3. Substitutability
Importersofsubjectmerchandisereportedimportingfinishedandunfinished
IMTDCsfrombothCanadaandChina,andthedomesticindustryalsoreportedU.S.
shipmentsofbothunfinishedandfinishedIMTDCs. 174Allrespondingdomesticproducers,
nearlyallrespondingimporters,andmostrespondingpurchasersreportedthatlargeͲ
diameterIMTDCsfromCanada,China,andtheUnitedStatesarealwaysorfrequently
interchangeable.175
TheCommissionaskedpurchaserstoreportthetopthreefactorsconsideredintheir
purchasingdecisionsforIMTDCs.Purchaserscitedqualitymostfrequentlyasthemost
importantfactor(7firms),followedbyprice(5firms),whereaspricewasthemost
frequentlyreportedsecondͲandthirdͲmostimportantfactor(7firmseach).176Purchasers
alsoreportedthat“qualitymeetsindustrystandards,”“availability,”“productconsistency,”
“reliabilityofsupply,”and“deliverytime”wereimportantfactorsintheirpurchasing
decisions. 177AmajorityoffirmsreportedthatnonͲpricedifferencesbetweenlargeͲ
170CR/PRatTableIVͲ7.
171Intermsofpieces,nonsubjectimportsoflargeͲdiameterIMTDCsaccountedforbetween
***percentand***percentofapparentU.S.consumption,whereasimportsofsmallͲdiameter
IMTDCsfromsubjectandnonsubjectcountriesaccountedforbetween***percentand***percent
ofthemarketduringthisperiod.CR/PRatTableIVͲ7.
172CRatIVͲ8;PRatIVͲ6.
173CR/PRatTableIIIͲ1n.4(notingthat***).
174CRatIVͲ15;PRatIVͲ10(alsonotingthatunfinishedIMTDCsaccountedforaverysmall
share(***percent)ofU.S.importers’U.S.shipments).
175CR/PRatTableIIͲ9.
176CR/PRatTableIIͲ5.
177CR/PRatTableIIͲ6.
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35
diameterIMTDCsmanufacturedintheUnitedStates,Canada,andChinaweresometimesor
neversignificantfactorsintheirsalesorpurchases.178
Majoritiesorpluralitiesofpurchasersfoundthedomesticlikeproducttobe
comparablewithsubjectimportsfromCanadaforeachof14nonͲpricecharacteristics,the
domesticlikeproductandsubjectimportsfromChinatobecomparableforeightofthe14
characteristics,andsubjectimportsfromCanadaandChinatobecomparablefornineof
the14characteristics.179MostrespondingpurchasersreportedthatlargeͲdiameterIMTDCs
manufacturedintheUnitedStates,Canada,andChinaalwaysorusuallymeetminimum
qualityspecifications. 180Basedontherecord,wefindahighdegreeofsubstitutability
amongIMTDCsmanufacturedintheUnitedStatesandIMTDCsimportedfromCanadaand
China.181
4. PurchasingBehavior
IntheU.S.market,IMTDCsaresoldthroughcataloguesandaresometimescustom
manufacturedtoorder.182MostfirmsreportedsellingIMTDCsinthespotmarketorunder
shortͲtermcontracts.183Questionnairerespondentsreportedsettingpricesthrough
transactionͲbyͲtransactionnegotiations,contracts,andsetpricelists,andsomereported
offeringquantitydiscounts,totalvolumediscounts,ormultipliersappliedtopricelistsor
otherdiscountstructures. 184
178CR/PRatTableIIͲ11.
179CR/PRatTableIIͲ8.
180CR/PRatTableIIͲ10.
181CRatIIͲ12;PRatIIͲ10.
182CRatVͲ4;PRatVͲ3.
183CRatVͲ6;PRatVͲ4.
184CR/PRatTableVͲ1;CRatVͲ4,VͲ5;PRatVͲ4,VͲ5.
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36
5. RawMaterials
RawmaterialcostsaccountedforasizableshareofthetotalCOGStoproduce
IMTDCs. 185Pigiron,scrapiron,andferrousscrapmetalaretheprincipalrawmaterialsused
tomanufactureIMTDCs,andelectricityandnaturalgasareprimarysourcesofenergyfor
theproductionprocess. 186Pigironandscrappriceswererelativelystablein2013andinto
2014,fellinlate2014and2015,andwerehigherin2016. 187Electricitypriceswere
generallystable,whereasnaturalgaspriceswerestableinmostof2013,increasedsharply
latein2013andearly2014,anddeclinedthroughJune2016.188
C. VolumeofSubjectImports
Section771(7)(C)(i)oftheTariffActprovidesthatthe“Commissionshallconsider
whetherthevolumeofimportsofthemerchandise,oranyincreaseinthatvolume,either
inabsolutetermsorrelativetoproductionorconsumptionintheUnitedStates,is
significant.” 189
WerelyprimarilyonvalueͲbasedindicatorsasthebestmeasurefortheproductin
investigationssuchasthese,whichinvolvealargegroupingofitemsdifferinggreatlyinsize,
characteristics,applications,andprice.190Whilepetitionerarguedinthefinalphaseof
theseinvestigationsthatweightoffersabettermeasureforIMTDCs, 191wedonotrelyon
weightͲbasedindicatorsinthesedeterminations.Notallperformanceindicatorsare
amenabletomeasurementbyweightintheseinvestigations,andnotallquestionnaire
185Foralldomesticproducers,rawmaterialsasashareofCOGsincreasedfrom***percent
ofCOGSin2013to***percentin2015,whereastheratioforfirmswithcastingandintegrated
castingandfinishingoperationsincreasedfrom***percentin2013to***percentin2015andthe
ratioforfirmswithonlyfinishingoperationsdeclinedfrom***percentin2013to***percentin
2015.CRatVͲ1;PRatVͲ1;CR/PRatTableVIͲ1,TableVIͲ3,andTableVIͲ5.
186CRatVͲ1;PRatVͲ1.
187CRatVͲ1;PRatVͲ1;CR/PRatFigureVͲ1.
188CRatVͲ1;PRatVͲ1;CR/PRatFigureVͲ2.
18919U.S.C.§1677(7)(C)(i).
190See,e.g.,DiamondSawbladesandPartsThereoffromChina,Inv.No.731ͲTAͲ1092
(Review),USITCPub.4559at12n.64(Sept.2015);PreliminaryConfidentialViews,EDISDoc.571266
at37n.133;USITCPub.4587at24n.133.WerecognizethatCommercefoundthatsubjectimports
wereunfairlytraded,andareotherwisemindfulofthelimitationsofusingvalueratherthan
quantitymeasures,suchasthedifficultyindeterminingwhetherchangesinvaluearecausedby
changesinproductmixorprice.Therefore,wealsoconsideredquantitydatabasedonpieces,
whereappropriate.Wereachthesameconclusionsregardlessofwhichmeasureisused.Wealso
notethatthepetitionsinitiallycalculatedmarketsizeandsharebyvalue.Petitions,vol.IatExhibit
IͲ15. 191Petitioner’sPosthearingBriefatExhibit1at40Ͳ41;HearingTr.at70Ͳ71,115Ͳ116
(Pickard).
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37
respondentsmaintainrecordswithweightdata.192Wefurtherfindthatpetitioner’s
analysisofweightͲbasedmarkettrendsinitsprehearingbriefisunreliable.193
ThevalueofU.S.shipmentsofcumulatedsubjectimportsfromCanadaandChina
increasedfrom$42.2millionin2013to$44.1millionin2014,declinedto$40.2millionin
2015,andwaslowerininterim2016($15.6million)thanininterim2015($21.0million). 194
Thevalueofthedomesticindustry’sU.S.shipmentsofthedomesticlikeproductincreased
from$***in2013to$***in2014,declinedto$***in2015,andwaslowerininterim2016
($***)thanininterim2015($***).195Thus,thevalueofthedomesticindustry’sU.S.
192Thequestionnairesforthefinalphaseoftheseinvestigationsonlysoughtweightdatafor
U.S.importers’importsandfordomesticandforeignproducers’capacityandproduction.Evenso,
importersthatreportedtheirimportsintermsofvalueandpieces(particularlyimportersoflargeͲ
diameterIMTDCsfromChinaandimportersoflargeͲandsmallͲdiameterIMTDCsfromnonsubject
sources)wereunabletoreporttheirimportsbyweightbecausetheydonotkeeprecordsbyweight.
ThequestionnairesdidnotrequestweightdatawithrespecttoU.S.shipmentsorinventoriesfrom
domesticproducersorU.S.importers,althoughpartieswereaskedforfeedbackonwhetherthe
questionnairesshouldcollectinventorydatabyvalueorbyquantity.Initscommentsonthedraft
questionnairesforthefinalphaseoftheseinvestigations,petitionerrespondedasfollows:
TBWood'sbelievesthatinventorydatashouldbecollectedintermsofquantity.Thegoods
subjecttotheseinvestigationscomeinavarietyofformsandsizes,andthereforethereare
significantvariationsinthepriceperpieceofthesegoods.Accordingly,valuedataalone
wouldprovideonlyalimitedunderstandingofthetruesizeofinventory.Nonetheless,TB
Wood'sbelievesthatcollectinginventorydataonthebasisofquantityandvaluewould
providetheCommissionwiththemostcomprehensivepictureandthussuggeststhatboth
quantityandvaluedatabecollected.
Petitioner’sCommentsonDraftQuestionnaires,EDISDoc.584552at3(emphasisadded).Inother
words,petitionercouldhaveaskedatthisjuncturefortheCommissiontoseekweightdatafor
inventories(orotherindicatorssuchasU.S.shipments),butonlydiscussedcollectingvalueand
quantitybypieces.
193PetitionerestimatedU.S.shipmentsbyweightforthedomesticindustryandimporters
bymultiplyingthenumberofpiecesshippedbyitsestimateoftheindustryaverageweightperpiece
produced.Petitioner’sPrehearingBriefatExhibit4.DuetothediverseproductmixofIMTDCs,
however,theaverageweightperpieceproducedvarieswidelybetweenfirmsandcanevenvary
widelybetweenquartersforthesamefirm,makingsuchaveragesanunreliablebasisonwhichto
extrapolatedata.Compoundingtheseconcerns,petitionerpredicateditsanalysisondomestic
producers’finishingoperations,eventhoughtheseoperationsutilizedavaryingmixtureof***
unfinishedIMTDCs,asnotedabove.Additionally,petitionerbaseditsanalysisoncertaindata
availableatthetimeoftheprehearingreport,beforethesedataweresupplementedwithadditional
questionnaireresponsesandadjustedtoremoveinformationthatdidnotcorrespondtotheIMTDC
productsatissue.ConfidentialWorksheet,EDISDoc.No.594857.
194Intermsofpieces,U.S.shipmentsofcumulatedsubjectimportsincreasedfrom
1,319,110in2013to1,405,280in2014,declinedto1,349,482in2015,andwerelowerininterim
2016(521,554)thanininterim2015(695,379).CR/PRatTableIVͲ6.
195Intermsofpieces,thedomesticindustry’sU.S.shipmentsincreasedfrom***in2013to
***in2014,declinedto***in2015,andwerelowerininterim2016(***)thanininterim2015
(***).CR/PRatTableIVͲ6.
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shipmentsofthedomesticlikeproductandthevalueofU.S.shipmentsofcumulated
subjectimportsfromCanadaandChinafollowedsimilartrajectories,i.e.,increasingfrom
2013to2014anddecliningbetween2014and2015;bothwerelowerin2015thanin2013
andwerelowerininterim2016thanininterim2015. 196197
Cumulatedsubjectimports’shareofapparentU.S.consumptiononavaluebasis
decreasedfrom***percentin2013to***percentin2014,increasedto***percentin
2015,andwaslowerininterim2016(***percent)thanininterim2015(***percent).198
Overall,cumulatedsubjectimports’shareofapparentU.S.consumption,byvalue,
increasedonly***percentagepointsbetween2013and2015,andtheirmarketsharein
interim2016waslowerthanininterim2015.Whilecumulatedsubjectimports’market
sharewasgenerallysteady(2013to2015)orlower(ininterim2016thanininterim2015),
thedomesticindustry’smarketshare,byvalue,increased***percentagepointsbetween
2013and2015(from***percentin2013and2014to***percentin2015),andwas***
percentagepointshigherininterim2016(***percent)thanininterim2015(***
percent).199
Theratio,bypieces,ofimporters’U.S.shipmentsofcumulatedsubjectimportsto
thedomesticindustry’sU.S.productiondeclinedfrom***percentin2013to***percentin
2014,increasedto***percentin2015,andwaslowerininterim2016(***percent)thanin
interim2015(***percent).200
Wefindthatthevolumeofcumulatedsubjectimportsissignificantonanabsolute
basisandrelativetoapparentU.S.consumptionandproduction.Asdiscussedbelow,
196Intermsofpieces,trendsfollowedsimilartrajectoriesforbothgroups:increasingfrom
2013to2014anddecliningfrom2014to2015,andbothwerelowerininterim2016thanininterim
2015.CR/PRatTableIVͲ6.
197Petitionerargues,andChineseRespondentsconcede,thatU.S.shipmentsofcumulated
subjectimportswerelowerininterim2016thanininterim2015atleastinpartduetothefilingof
thepetitions.Petitioner’sPosthearingBriefat5;HearingTr.at135(Grimson).Nevertheless,the
observedvolumepatternsareconsistentwithlowerlevelsofapparentU.S.consumptionininterim
2016thanininterim2015andwithourobservationthatthevolumeofcumulatedsubjectimports
generallytrackedapparentU.S.consumptiontrendsbetween2013and2015.
198CR/PRatTableIVͲ7.Intermsofpieces,cumulatedsubjectimports’shareofapparent
U.S.consumptionwassteadythroughoutmostoftheperiod,withlittlechangeuntilinterim2016,
increasingincrementallyfrom***percentin2013to***percentin2014and***percentin2015.
Bycontrast,theirmarketshare,bypieces,wasconsiderablylowerininterim2016(***percent)
thanininterim2015(***percent).Overall,cumulatedsubjectimports’shareofapparentU.S.
consumption,bypieces,increased***percentagepointsfrom2013to2015andwas***
percentagepointslowerininterim2016thanininterim2015.CR/PRatTableIVͲ7.
199CR/PRatTableIVͲ7.Intermsofpieces,thedomesticindustry’smarketsharewasfairly
steadythroughouttheperiodwithlimitedchanges;itincreasedfrom***percentin2013to
***percentin2014,declinedto***percentin2015,andwaslowerininterim2016(***percent)
thanininterim2015(***percent).Overall,thedomesticindustry’smarketshare,bypieces,
decreased***percentfrom2013to2015andwas***percentlowerininterim2016thanin
interim2015.CR/PRatTableIVͲ7.
200CR/PRatTableIVͲ2.
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however,wedonotfindthatcumulatedsubjectimportshadsignificantpriceeffectsor
impactonthedomesticindustry.
D. PriceEffectsoftheSubjectImports
Section771(7)(C)(ii)oftheTariffActprovidesthat,inevaluatingthepriceeffectsof
thesubjectimports,theCommissionshallconsiderwhether
(I)therehasbeensignificantpriceundersellingbytheimportedmerchandise
ascomparedwiththepriceofdomesticlikeproductsoftheUnitedStates,
and
(II)theeffectofimportsofsuchmerchandiseotherwisedepressespricestoa
significantdegreeorpreventspriceincreases,whichotherwisewouldhave
occurred,toasignificantdegree.201
Asexplainedabove,therecordindicatesthatthereisahighdegreeof
substitutabilitybetweensubjectimportsandthedomesticlikeproductandthatpriceisone
ofseveralfactorsthatpurchasersconsiderinpurchasingdecisions.Theyrankedavailability,
productconsistency,qualitystandards,andreliabilityofsupplyasmoreimportanttotheir
purchasingdecisionsthanprice.202
Afterseekinginputfromthepartiesonthepricingproducts, 203theCommission
soughtquarterlydataonthetotalquantityandf.o.b.valueofsixIMTDCproductsfrom
domesticproducersandU.S.importers.204AtthesuggestionofTBW,theCommission
20119U.S.C.§1677(7)(C)(ii).
202CR/PRatTableIIͲ6.
203InitsPreliminaryViews,theCommissioninvitedthepartiesintheircommentsonthe
draftquestionnairesforthefinalphaseoftheseinvestigationstosuggestpricingproductsthat
wouldlikelyprovidebettercoverageandthatwouldlikelygeneratepricingobservationsforthe
domesticlikeproductandsubjectimportsfromCanadaandChina.PreliminaryViews,EDISDoc.
571266at70;USITCPub.4587at45.Basedoninformationprovidedbythepetitionerinits
commentsonthedraftquestionnaires,theCommission’sstaffselectedthefivelargestͲvolume
productsforTBWandMartinSprocketaswellasasixthproduct(product1)***.CRatVͲ8n.11;PR
atVͲ6n.11.
204CRatVͲ8;PRatVͲ6.Product1isanarrow“3V”groovesheave,witha6.0inchoutside
diameterandthreegrooves,suitableforusewithaTypeSDSbushing.Product2isanarrow“5V”
groovesheave,witha23.6Ͳinchoutsidediameterandeightgrooves,suitableforusewithaTypeJ
bushing.Product3isanarrow“5V”groovesheave,witha50Ͳinchoutsidediameterandsix
grooves,suitableforusewithaTypeMbushing.Product4isanarrow“5V”groovesheave,witha
50Ͳinchoutsidediameterandeightgrooves,suitableforusewithaTypeMbushing.Product5isa
TypeEbushing,witha3Ͳ3/8Ͳinchbore.Product6isaTypeFbushing,witha3Ͳ3/8Ͳinchbore.CRat
VͲ8;PRatVͲ6.Thesepricingproductsdifferfromthoseinthepreliminaryphaseofthese
investigationsandincludebushings,whichwerenotamongthepricingitemsinthepreliminary
phaseoftheinvestigations,aswellassheaves.CRatVͲ8n.11;PRatVͲ6n.11.
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40
requestedthatquestionnairerespondentssegregatetheirsalestodistributorsfromtheir
salestoendusers/OEMs.205Fourdomesticproducersand11importersofsubject
merchandiseprovidedusabledata,althoughnotallfirmsreportedpricingdataforall
productsforallquarters.206
Asindicatedearlier,IMTDCsaremanufacturedinamultitudeofshapes,sizes,
weights,andgrooveconfigurations. 207TBW’sownproductcatalogueadvertises“closeto
20,000”stockkeepingunits(“SKUs”).208In2015,reportedpricingdataaccountedfor
approximately0.6percentofthedomesticindustry’sU.S.shipmentsofIMTDCs(smallͲand
largeͲdiameter),1.7percentofU.S.shipmentsofsubjectimportsfromCanada,and0.9
percentofU.S.shipmentsofsubjectimportsfromChina. 209Incasesinvolvinghighlyvaried
productssuchasthis,itisunlikelythatpricingdatacoveragewillbeextensive.210Indeed,
althoughcoveragewaslimitedonapercentagebasis,petitionerconcedesthatthepricing
datacollectedintheseinvestigationsare“meaningful,”“rocksolid,”and“representative”
ofcompetitionintheU.S.market.211
Basedonthesepricingdata,cumulatedsubjectimportsfromCanadaandChina
undersoldthedomesticlikeproductthroughoutthePOIforsalestodistributorsandend
users/OEMsandfortransactionsinvolvingsheavesaswellasbushings.Pricesfor
cumulatedsubjectimportsfromCanadaandChinawerelowerthanpricesforthedomestic
likeproductin217of228instances,involvinganaggregatequantityof36,831pieces.212
205CRatVͲ8;PRatVͲ6;Petitioner’sCommentsonDraftQuestionnairesfortheFinalPhase
oftheInvestigations,EDISDoc.584552.
206CRatVͲ8toVͲ9;PRatVͲ6.
207See,e.g.,CRatIͲ19toIͲ20;PRatIͲ17toIͲ18.
208Confer.Tr.at39(Pickard),65(DeFrancesco).
209CRatVͲ8toVͲ9;PRatVͲ6.
210See,e.g.,KernͲLiebersUSA,Inc.v.UnitedStates,19CIT87,114Ͳ15(1995).
211See,e.g.,HearingTr.at38Ͳ39(Pickard)(referringtotheavailablepricingcomparisonsas
“meaningfuldata”);HearingTr.at49(Pickard)(“Andyouknowthatevenwhenit’sunderͲreported
yourpricingproductdataisspoton.You’vegotsixveryspecificdefinitionsthroughtwodifferent
channelsofcommunicationthatyouendupgetting228comparisons.Idon’tthinkanyofthat’s
beencalledintoquestion.That’srocksolid.”);HearingTr.at51(Pickard)(“…whenyouhavea
domesticindustrythatliterallyhastensofthousandsofSKUs,it’snotsurprisingthatpricing
productsaren’tgoingtobebroad;they’rerepresentative.They’reexamplesofwhat’sgoingon.”).
212CR/PRatTableVͲ2toVͲ7andTableVͲ9;CRatVͲ28toVͲ30;PRatVͲ10.Forsalesto
distributors,subjectimportswerepricedbelowpricesofthedomesticlikeproductin120of126
instances(22,331pieces)atmarginsof0.1to81.2percent,andsubjectimportpriceswereabove
thoseforthedomesticlikeproductinsixinstances(199pieces)atmarginsof0.8to24.7percent.
Forsalestoendusers,subjectimportswerepricedbelowthoseforthedomesticlikeproductin97
of102instances(14,500pieces)atmarginsof8.4to84.8percent),andsubjectimportswerepriced
abovethoseforthedomesticlikeproductinfiveinstances(54pieces)atmarginsof2.6to57.9
percent.Forsheaves(products1Ͳ4),subjectimportpriceswerebelowdomesticlikeproductprices
in105of116instances(12,336pieces)atmarginsof0.1to84.8percent,andsubjectimportswere
pricedabovethoseforthedomesticlikeproductin11instances(253pieces)atmarginsof0.8to
(Continued...)
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Marginsofundersellingrangedfrom0.1to84.8percent.Intheremaining11instances,
involvinganaggregatequantityof253pieces,pricesforsubjectimports(allofwhich
involvedIMTDCsimportedfromChina)werebetween0.8and57.9percenthigherthan
pricesofthedomesticlikeproduct.213
Thesepricingcomparisonsdemonstratepervasiveundersellingbysubjectimports.
Therecord,however,revealsnosignificanteffectsasaresultofthisunderselling.214Asthe
volumedatadiscussedabovedemonstrate,therecorddoesnotshowanysignificantmarket
shareshiftfromthedomesticindustrytosubjectimportsduringthePOI.Infact,as
measuredbyvalue,thedomesticindustryincreaseditsmarketshareoverthePOI. 215
Moreover,therecorddoesnotshowsignificantpricedepressionorsuppressioncausedby
subjectimports,aselaboratedbelow.
WefindthatcumulatedsubjectimportsfromCanadaandChinadidnotdepress
pricesofthedomesticlikeproducttoasignificantdegree.Pricesofdomesticallyproduced
IMTDCsshowednocleartrendduringthePOI,withpricesforfiveproductstoend
users/distributorsincreasingbymarginsof***percentto***percent,andpricesforsix
productstoendusers/distributorsdecreasingbetween***percentand***percent.216
Indeed,reportedU.S.shipmentsandpricesofthedomesticproductactuallyincreasedover
thePOIforsomepricingproducts,notwithstandingundersellingbycomparableorlarger
volumesofsubjectimportsforthoseproducts. 217Thedomesticindustry’spricesforsome
(…Continued)
57.9percent.Forbushings(products5Ͳ6),subjectimports’priceswerebelowthoseofthedomestic
likeproductinall112instances(24,465pieces)atmarginsof8.4to52.5percent.Id.
213MostinstancesofoversellingbysubjectimportsfromChinainvolvedproduct3,a
relativelyhighͲvalue,lowͲvolumeproduct.CR/PRatTableVͲ9;CRatVͲ28;PRatVͲ10.
214Compare,e.g.,Altx,Inc.v.UnitedStates,26CIT1425,1436Ͳ37(2002)(affirmingfinding
thatundersellingwasnotsignificantintheabsenceofadverseeffectscausedbytheunderselling),
aff’d,370F.3d1108(Fed.Cir.2004).
215CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,byvalue,
increasedfrom***percentin2013to***percentin2015andwashigherininterim2016(***
percent)thanininterim2015(***percent).Asmeasuredinpieces,thedomesticindustry’smarket
sharewasfairlysteady.CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare
was***percentin2013,***percentin2015,and***percentininterim2016).Althoughsome
U.S.purchasersreportedshiftingpurchasestosubjectimportsduringtheperiod,thereported
quantityofsuchshiftswassmallrelativetoapparentU.S.consumption,andtherecordasawhole
doesnotshowthatthedomesticindustrylostmarketsharetosubjectimports.CR/PRatTableVͲ10
andTableVͲ11(confirmingashiftof560piecestosubjectimportsduringtheperiodby***andan
unknownquantityby***,afirmwhosepurchasesaccountedfor***percentoftotalreported
purchasesin2015,byvalue,andthatreported***percentofitspurchasesin2015,byvalue,were
fromthedomesticindustry,***percentwerefromChina,***percentwerefromCanada,and***
percentwerefromotherimportsources).
216CR/PRatTableVͲ8.
217See,e.g.,CR/PRatTableVͲ6aandTableVͲ7a.Pricecomparisonsforproducts5and6to
distributorsshowundersellingofthedomesticlikeproductbycomparableorlargervolumesof
subjectimportsthroughoutthePOI,yetpricesofthedomesticlikeproductandthedomestic
(Continued...)
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 49 of 218
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ofthepricingproductsfluctuatedsignificantlythroughouttheperiodinwaysthatcannotbe
linkedtothesubjectimports. 218Instead,thesefluctuationsareconsistentwiththepricing
variabilityidentifiedbymarketparticipants,whichreportedthatpricescanvary
substantiallyforthesameproductdependingonfactorssuchasbrand,customer,
application,andleadtime.219Basedontherecord,wefindthatcumulatedsubjectimports
didnotdepresspricesofthedomesticlikeproducttoasignificantdegree.
WealsoconsideredwhethercumulatedsubjectimportsfromCanadaandChina
preventedincreasesinpricesofthedomesticlikeproduct,whichotherwisewouldhave
occurred,toasignificantdegree.Thedomesticindustry’sratioofCOGStonetsaleswas
steadythroughoutmostofthePOI,at***percentin2013,***percentin2014,and
***percentin2015;itwaslowerininterim2016(***percent)thanininterim2015
(***percent).220WenotethattheincreaseintheCOGStonetsalesratioin2015occurred
asapparentU.S.consumptiondeclined.Moreover,asdiscussedabove,manyofthepricing
productsshowthatthedomesticindustrydidexperiencepriceincreasesduringthePOI.
Priceincreasesgenerallywouldnotbeexpectedinaperiodofoveralldeclinesinapparent
U.S.consumptionduringwhichtherewerenosubstantialcostincreases.
Petitionerarguesthatsubjectimportscausedpricesuppressionbytakingsalesof
highͲvolume,lowͲvalueIMTDCsandforcingthedomesticindustrytorelyonlowͲvolume,
highͲvaluesales,whichresultedinlowervolumesandincreasedSG&Acostsforthe
domesticindustrythatpreventednecessarypriceincreases.221Specifically,petitioner
allegesthatSG&Acostsincreasedduetoadditionalmarketingexpensesincurredto
competewithsubjectimports, 222yetpetitionerwasunabletodocumentorcorroborate
theseallegations. 223Further,therecordcontradictspetitioner’stheorythatthedomestic
industrylostsalesvolumeduetocumulatedsubjectimportpricing,becauseduringthePOI
therewasnoappreciabledeclineinthedomesticindustry’smarketsharenoran
(…Continued)
industry’sreportedU.S.shipmentstodistributorsbypiecesforthesepricingproductsremained
relativelysteadyorincreased.
218CR/PRatFigureVͲ4a,VͲ4b,VͲ5a,andVͲ5b,showingtrendsforpricingproducts2and3
toendusersanddistributors.Pricesforthedomesticlikeproductexperiencedsignificant
fluctuationsevenwhilepricesforsubjectimportsremainedrelativelysteady.
219CRatVͲ9;PRatVͲ9.
220CR/PRatTableVIͲ1.
221Petitioner’sPosthearingBriefat10Ͳ11,Exhibit1at48Ͳ49;HearingTr.at105,111Ͳ112
(Pickard).
222Petitioner’sPosthearingBriefat10Ͳ11,Exhibit1at48Ͳ49;HearingTr.at105,111Ͳ112
(Pickard).
223See,e.g.,Petitioner’sPosthearingBriefat10(reiteratingargumentsclaimingthat
increasesinSG&Aweretheresultofincreasedsalesexpensesyetcitingnorecordevidenceto
supportsuchsalesactivities;noexhibitsincludedwiththebriefaddressedallegedadditionalsales
expenses).
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43
appreciableincreaseinthemarketshareforsubjectimports.224Tothedegreethat
petitioner’sargumentreferencessmallͲdiameterIMTDCs,suchimportscorrespondtooutͲ
ofͲscopemerchandise,consistentwithpetitioner’srequestedscopeamendment.225For
thesereasons,wedonotfindthatcumulatedsubjectimportsfromCanadaandChina
preventedincreasesofdomesticlikeproductpricesthatotherwisewouldhaveoccurredto
asignificantdegree.
Insum,wefindthatcumulatedsubjectimportsfromCanadaandChinadidnothave
significanteffectsonpricesofthedomesticlikeproductduringthePOI.
E. ImpactoftheSubjectImports226
Section771(7)(C)(iii)oftheTariffActprovidesthat,inexaminingtheimpactof
subjectimports,theCommission“shallevaluateallrelevanteconomicfactorswhichhavea
224CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,byvalue,
increasedoverallfrom***percentin2013to***percentin2015andwashigherininterim2016
(***percent)thanininterim2015(***percent),whereassubjectimports’marketshare,byvalue,
was***percentin2013,***percentin2015,andlowerin2016(***percent)thanininterim2015
(***percent).Asmeasuredinpieces,thedomesticindustry’smarketsharewasfairlysteadyduring
thePOIandsubjectimports’marketsharewasrelativelysteadybetween2013and2015andlower
ininterim2016thanininterim2015.CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’s
marketsharewas***percentin2013,***percentin2015,and***percentininterim2016,
whereassubjectimports’marketsharewas***percentin2013,***percentin2015,***percent
ininterim2015,and***percentininterim2016).Aswefoundabove,althoughsomeU.S.
purchasersreportedshiftingpurchasestosubjectimportsduringtheperiod,theconfirmedquantity
ofsuchshiftswassmallrelativetoapparentU.S.consumptionandtherecordasawholedoesnot
showthatthedomesticindustrylostmarketsharetosubjectimports.CR/PRatTableVͲ10,TableVͲ
11. 225***.CR/PRatTableIIIͲ1n.4andTableIIIͲ17.
226ThestatuteinstructstheCommissiontoconsiderthe“magnitudeofthedumping
margin”inanantidumpingproceedingaspartofitsconsiderationoftheimpactofimports.
19U.S.C.§1677(7)(C)(iii)(V).Wetakeintoaccountinouranalysisthatinitsfinaldeterminationsof
salesatlessvalue,Commerceassignedantidumpingdutymarginsof191.34percenttoBaldor
Canada(anadversefactsavailableratebasedonthefirm’snonͲcooperation),100.47percenttoall
otherfirmsinCanada,13.64percentto21namedexporter/producercombinationsinChina,and
401.68percenttothePRCͲwideentity.81Fed.Reg.75,039,75,040(Oct.28,2016)(Canada–AD);
81Fed.Reg.75,032,75,038(Oct.28,2016)(China–AD);CR/PRatTableIͲ2andTableIͲ3.
CommercedidnotassigndeminimisantidumpingdutymarginstoanyfirminCanadaorChina.
Accordingly,forouranalysis,weconsideredallimportsoflargeͲdiameterIMTDCsfromCanadaand
allimportsoflargeͲdiameterIMTDCsfromChinaasimportsofsubjectmerchandisethatweresold
atlessthanfairvalue.Ouranalysisofpricingofthesubjectimportsandhowsubjectimportpricing
affectedthedomesticindustry,describedinthepriceeffectsdiscussionandbelow,isparticularly
probativetoourassessmentoftheimpactofcumulatedsubjectimportsonthedomesticindustry’s
condition.
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44
bearingonthestateoftheindustry.” 227Thesefactorsincludeoutput,sales,inventories,
capacityutilization,marketshare,employment,wages,productivity,grossprofits,net
profits,operatingprofits,cashflow,returnoninvestment,returnoncapital,abilitytoraise
capital,abilitytoservicedebts,researchanddevelopment,andfactorsaffectingdomestic
prices.Nosinglefactorisdispositiveandallrelevantfactorsareconsidered“withinthe
contextofthebusinesscycleandconditionsofcompetitionthataredistinctivetothe
affectedindustry.” 228
WefindthatcumulatedsubjectimportsfromCanadaandChinadidnothavea
significantimpactonthedomesticindustryduringthePOI.Asdiscussedabove,apparent
U.S.consumptionfluctuatedduringthePOI;itincreasedfrom2013to2014,decreased
between2014and2015,andwaslowerininterim2016thanininterim2015. 229Manyof
thedomesticindustry’sperformanceindicatorsmirroredthesechangesinapparentU.S.
consumptionoverthePOIandarenototherwiseexplainedbytrendsincumulatedsubject
imports.
Thedomesticindustryincreaseditsproductioncapacityfrom2013to2015,
althoughitsproductioncapacitywassomewhatlowerininterim2016thanininterim
2015. 230Intermsofpieces,thedomesticindustry’sproduction,capacityutilization,U.S.
shipments,andnetsalesallfollowedasimilartrajectory;theyincreasedfrom2013to2014,
decreasedfrom2014to2015,andwerelowerininterim2016thanininterim2015. 231
22719U.S.C.§1677(7)(C)(iii);seealsoSAAat851and885(“Inmaterialinjury
determinations,theCommissionconsiders,inadditiontoimports,otherfactorsthatmaybe
contributingtooverallinjury.Whilethesefactors,insomecases,mayaccountfortheinjurytothe
domesticindustry,theyalsomaydemonstratethatanindustryisfacingdifficultiesfromavarietyof
sourcesandisvulnerabletodumpedorsubsidizedimports.”).
22819U.S.C.§1677(7)(C)(iii).ThisprovisionwasamendedbytheTradePreferences
ExtensionActof2015,Pub.L.114Ͳ27.
229CR/PRatTableIVͲ6.Byvalue,apparentU.S.consumptionwas$***in2013,$***in
2014,$***in2015,$***ininterim2015,and$***ininterim2016.Byquantity,apparentU.S.
consumptionwas***piecesin2013,***piecesin2014,***piecesin2015,***piecesininterim
2015,and***piecesininterim2016.CR/PRatTableIVͲ6.
230Productioncapacitywas***piecesin2013,***piecesin2014,***piecesin2015,***
piecesininterim2015,and***piecesininterim2016.CR/PRatTableIIIͲ10.
231Thedomesticindustry’sproductioninpieceswas***in2013,***in2014,***in2015,
***ininterim2016,and***ininterim2015.Thedomesticindustry’scapacityutilizationinpieces
was***percentin2013,***percentin2014,***percentin2015,***percentininterim2015,and
***percentininterim2016.CR/PRatTableIIIͲ10.Thedomesticindustry’sU.S.shipments,by
value,were$***in2013,$***in2014,and$***in2015,andwerelowerininterim2016($***)
thanininterim2015($***);intermsofpieces,thedomesticindustry’sU.S.shipmentswere***in
2013,***in2014,and***in2015,***ininterim2016and***ininterim2015.CR/PRatTableIVͲ
6.Thedomesticindustry’snetsales,bypieces,were***in2013,***in2014,***in2015,***in
interim2016,and***ininterim2015.CR/PRatTableVIͲ1.
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Cumulatedsubjectimportsfollowedsimilartrends,232andthedomesticindustry’sshareof
apparentU.S.consumptionshowedlittlechangeoverthePOI. 233
SeveralemploymentͲrelatedfactors,suchasPRWs,totalhoursworked,andwages
paid,alsoincreasedfrom2013to2014,decreasedbetween2014and2015,andwerelower
ininterim2016thanininterim2015.234Productivitydeclinedirregularlybetween2013and
2015,butwashigherininterim2016thanininterim2015. 235
ThedomesticindustrymaintainedarelativelysteadyratioofCOGStonetsales
between2013and2015,andthisratiowaslowerininterim2016thanininterim2015.236
Nevertheless,thedomesticindustry’sfinancialperformancewaspoorthroughoutthePOI,
althoughitwasbetterininterim2016thanininterim2015.Operatingincomedeclined
from2013to2014and***in2015,whereasoperatingincomewashigherininterim2016
thanininterim2015. 237Thedomesticindustry’sratioofoperatingincometonetsales,
232CR/PRatTableIVͲ6.Asnotedabove,petitionerhasarguedthatthelowervolumeand
marketshareofcumulatedsubjectimportsininterim2016thanininterim2015weredueatleastin
parttothefilingofthepetitionsandnotjustlowerapparentU.S.consumptionininterim2016than
ininterim2015.Notwithstandingthis,wenotethatmanyperformanceindicatorsforthedomestic
industryalsowerelowerininterim2016thanininterim2015,despitelowervolumesofcumulated
subjectimportsduringthisperiod.
233CR/PRatTableIVͲ7.Thedomesticindustry’sinventoriesincreasedoverall,yetitsmarket
sharebypieceswasgenerallysteadyorincreasing,underminingpetitioner’sargumentthatthe
domesticindustry’sinventoryincreasesresultedfromsaleslosttocumulatedsubjectimports.See,
e.g.,CR/PRatTableIIIͲ16(indicatingthatthedomesticindustry’sendͲofͲperiodinventories,in
pieces,increasedfrom***in2013to***in2014and***in2015andwere***ininterim2016and
***ininterim2015);CR/PRatTableIVͲ7(indicatingthatthedomesticindustry’smarketshare,by
pieces,increasedfrom***percentin2013to***percentin2014,decreasedto***percentin
2015,andwaslowerininterim2016(***percent)thanininterim2015(***percent)).
234Thedomesticindustryemployed***PRWsin2013,***in2014,***in2015,***in
interim2016,and***ininterim2015.Totalhoursworkedincreasedfrom***in2013to***in
2014,decreasedto***in2015,andwere***ininterim2016and***ininterim2015.Wagespaid
increasedfrom$***in2013to$***in2014,declinedto$***in2015,andwere$***ininterim
2016and$***ininterim2015.Unitlaborcostsincreasedfrom$***/piecein2013to$***/piecein
2014,$***/piecein2015,$***/pieceininterim2015,and$***/pieceininterim2016.CR/PRat
TableIIIͲ18.
235Productivity(piecesper1,000hours)increasedfrom***in2013to***in2014,declined
to***in2015,andwas***ininterim2016and***ininterim2015.Hourlywagesincreasedfrom
$***/hourin2013to$***/hourin2014,and$***/hourin2015,andwerehigherininterim2016
($***/hour)thanininterim2015($***/hour).CR/PRatTableIIIͲ18.
236CR/PRatTableVIͲ1.Thedomesticindustry’sCOGSasaratiotonetsalesincreased
incrementallyfrom***percentin2013to***percentin2014and***percentin2015,andwas
lowerininterim2016(***percent)thanininterim2015(***percent).CR/PRatTableVIͲ1.
237CR/PRatTableVIͲ1.Thedomesticindustry’sgrossprofitincreasedfrom$***in2013to
$***in2014,declinedto$***in2015,andwashigherininterim2016($***)thanininterim2015
$(***).Itsoperatingincomedeclinedfrom$***in2013to$***in2014to***in2015,whereas
operatingincomewashigherininterim2016($***)thanininterim2015($***).Thedomestic
(Continued...)
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whichneverexceeded***percent,graduallydeclinedbetween2013and2015butwas
higherininterim2016thanininterim2015. 238Thedomesticindustry’scapitalexpenditures
decreasedfrom2013to2015butwerehigherininterim2016thanininterim2015. 239The
domesticindustry’sR&Dexpensesincreasedfrom2013to2015butwerelowerininterim
2016thanininterim2015. 240
Thesharpestdeclineinthedomesticindustry’sfinancialperformanceoccurred
between2014and2015duringaperiodofdecliningapparentU.S.consumption.As
consumptiondeclined,thedomesticindustrymaintainedastableorhighermarketshare.241
Subjectimportsdecreasedbetween2014and2015,andtheirmarketsharewasessentially
steady.242Thus,therewasnoincreaseinsubjectimportsthatwouldexplainthedeclinesin
thedomesticindustry’sfinancialperformancebetween2014and2015;rather,therecord
indicatesthatthedomesticindustryexperiencedhigherlaborandSG&Acostsbyunitwhen
itreducedoutput(andnetsales)duringthisperiodoflowerapparentU.S.consumption. 243
Asdiscussedabove,therecorddoesnotsupportpetitioner’sallegationsthatthedomestic
industryincurredincreasedSG&Aexpensesaftercumulatedsubjectimportstooksalesof
highͲvolume,lowͲvalueIMTDCsfromthedomesticindustry.244Thus,therecordindicatesa
relationshipbetweenunfavorablechangesintheindustry’scoststructurebetween2014
(…Continued)
industry’snetincomedeclinedfrom$***in2013to$***in2014and***in2015,butitsnet
incomewashigherininterim2016($***)thanininterim2015(***).CR/PRatTableVIͲ1.
238CR/PRatTableVIͲ1.Thedomesticindustry’soperatingincomemarginwas***percent
in2013,***percentin2014,***percentin2015,andwashigherininterim2016(***percent)
thanininterim2015(***percent).CR/PRatTableVIͲ1.
239CR/PRatTableVIͲ8.Capitalexpendituresforthedomesticindustrywere$***in2013,
$***in2014,$***in2015,$***ininterim2015,and$***ininterim2016.Thehigherlevelin
interim2016islargelyattributableto***.CR/PRatTableVIͲ8&n.1.
240CR/PRatTableVIͲ8.R&Dexpensesforthedomesticindustrywere$***in2013,$***in
2014,$***in2015,$***ininterim2015,and$***ininterim2016.
241Thedomesticindustry’smarketshare,byvalue,increasedfrom***percentin2014to
***percentin2015,anditsmarketshare,bypieces,wasstableat***percentin2014and
***percentin2015).CR/PRatTableIVͲ7.
242Byvalueandpieces,U.S.shipmentsofsubjectimportswerelowerin2015($40,231,000
and1,349,482pieces)thanin2014($44,129,000and1,405,280pieces).Byvalueandpieces,
apparentU.S.consumptionwaslowerin2015($***and***pieces)thanin2014($***and***
pieces).CR/PRatTableIVͲ6.Subjectimports’marketshare,byvalue,was***percentin2014and
***percentin2014,andtheirmarketshare,bypieces,was***percentin2014and***percentin
2015.CR/PRatTableIVͲ7.
243Thedomesticindustry’sunitdirectlaborcostsdecreasedfrom$***/piecein2013to
$***/piecein2014,increasedto$***/piecein2015,andwerelowerininterim2016($***/piece)
thanininterim2015($***/piece),whichfollowstrendsinapparentU.S.consumption,output,and
netsalesforthedomesticindustry.Thedomesticindustry’sunitSG&Aexpensesrosefrom
$***/piecein2013to$***/piecein2014and$***/piecein2015,andtheywerelowerininterim
2015($***/piece)thaninterim2016($***/piece).CR/PRatTableVIͲ1.
244CR/PRatTableIVͲ6.
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and2015andreductionsinoutputandnetsalesassociatedwithdeclinesinapparentU.S.
consumptionandnotcumulatedsubjectimports.
Althoughsomeofthedomesticindustry’sfinancialindicators,includingoperating
incomeandratioofoperatingincometonetsales,werehigherininterim2016afterthe
filingofthepetitionsthanininterim2015,suchimprovementsresultedfromadecreasein
thedomesticindustry’sCOGS, 245notanincreaseindomesticshipmentsasaresultofany
retreatfromthemarketbycumulatedsubjectimports. 246Thistrendreinforcesthatthe
domesticindustry’sfinancialcondition,whetherpoorfinancialperformancefrom2013to
2015orhigherlevelsininterim2016thanininterim2015,wasnottoanysignificantextent
afunctionofcumulatedsubjectimports.
DuringthePOI,significantvolumesofcumulatedsubjectimportsenteredtheUnited
Statesthatweregoodsubstitutesforthedomesticlikeproduct, 247andpricecomparisons
indicatethatcumulatedsubjectimportspervasivelyundersoldthedomesticlikeproduct.
Nonetheless,thisundersellingdidnotleadtosignificantshiftsinmarketsharesbyvalueor
pieces.Aswealsofoundabove,pricingdatashowednoclearcorrelationbetween
cumulatedsubjectimportsandthedomesticindustry’sprices.Thedomesticindustrydid
notfaceacostͲpricesqueezeandinsteadincreaseditspricesforseveralpricingproducts
overthePOIdespitethepresenceofsignificantvolumesofcumulatedsubjectimportsthat
undersoldthedomesticlikeproductatsizeablemargins.Basedontherecordandour
findingsaboveaboutthelackofcorrelationbetweencumulatedsubjectimportsandthe
domesticindustry’sperformance,wefindthatcumulatedsubjectimportsdidnothavea
significantimpactonthedomesticindustry.
245Eventhoughthedomesticindustry’snetsaleswerelowerininterim2016($***)thanin
interim2015($***)thanininterim2015($***),whichresultedinoperatingincomeof$***in
interim2016and$***ininterim2015.Thus,thedomesticindustry’simprovedfinancial
performanceininterim2016comparedtointerim2015wasrelatedtoitslowercosts,andthe
domesticindustrydidnotexperienceanyhighersalesassociatedwithalowerlevelofcumulated
subjectimportsinthemarketininterim2016thanininterim2015.CR/PRatTableVIͲ1.
246Marketsharesforsubjectimportsbypiecesandvaluewerelowerininterim2016thanin
interim2015;marketsharefordomesticshipmentsbypieceswaslowerininterim2016thanin
interim2015,althoughmarketsharefordomesticshipmentsbyvaluewasslightlyhigherininterim
2016thanininterim2015;themarketsharefornonsubjectimports(smallͲdiameterimportsfrom
allsourcesandlargeͲdiameterIMTDCsfromnonsubjectcountries)washigherintermsofvalueand
pieces,andtheincreaseinvaluefornonsubjectimportswasgreaterthanthatfordomestic
shipments.CR/PRatTableIVͲ7(indicatingthatnonsubjectimports’marketshare,byvalue,was***
percentininterim2016and***percentininterim2015andnonsubjectimports’marketshare,by
pieces,was***percentininterim2016and***percentininterim2015).
247CR/PRatTableIIͲ9andTableIIͲ10.
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VII. NoThreatofMaterialInjurybyReasonofSubjectImports
A. LegalStandard
Section771(7)(F)oftheTariffActdirectstheCommissiontodeterminewhetherthe
domesticindustryisthreatenedwithmaterialinjurybyreasonofsubjectimportsby
analyzingwhether“furtherdumpedorsubsidizedimportsareimminentandwhether
materialinjurybyreasonofimportswouldoccurunlessanorderisissuedorasuspension
agreementisaccepted.” 248TheCommissionmaynotmakesuchadetermination“onthe
basisofmereconjectureorsupposition,”andconsidersthethreatfactors“asawhole”in
makingitsdeterminationwhetherdumpedorsubsidizedimportsareimminentand
whethermaterialinjurybyreasonofsubjectimportswouldoccurunlessanorderis
issued. 249Inmakingourdeterminations,weconsiderallstatutorythreatfactorsthatare
relevanttotheseinvestigations. 250
24819U.S.C.§1677(7)(F)(ii).
24919U.S.C.§1677(7)(F)(ii).
250Thesefactorsareasfollows:(I)ifacountervailablesubsidyisinvolved,suchinformation
asmaybepresentedtoitbytheadministeringauthorityastothenatureofthesubsidy(particularly
astowhetherthecountervailablesubsidyisasubsidydescribedinArticle3or6.1oftheWTO
SubsidiesandCountervailingMeasuresAgreement(“WTOSCMAgreement”))andwhetherimports
ofthesubjectmerchandisearelikelytoincrease;(II)anyexistingunusedproductioncapacityor
imminent,substantialincreaseinproductioncapacityintheexportingcountryindicatingthe
likelihoodofsubstantiallyincreasedimportsofthesubjectmerchandiseintotheUnitedStates,
takingintoaccounttheavailabilityofotherexportmarketstoabsorbanyadditionalexports;(III)a
significantrateofincreaseofthevolumeormarketpenetrationofimportsofthesubject
merchandiseindicatingthelikelihoodofsubstantiallyincreasedimports;(IV)whetherimportsofthe
subjectmerchandiseareenteringatpricesthatarelikelytohaveasignificantdepressingor
suppressingeffectondomesticpricesandarelikelytoincreasedemandforfurtherimports;(V)
inventoriesofthesubjectmerchandise;(VI)thepotentialforproductͲshiftingifproductionfacilities
intheforeigncountry,whichcanbeusedtoproducethesubjectmerchandise,arecurrentlybeing
usedtoproduceotherproducts;(VIII)theactualandpotentialnegativeeffectsontheexisting
developmentandproductioneffortsofthedomesticindustry,includingeffortstodevelopa
derivativeormoreadvancedversionofthedomesticlikeproduct,and(IX)anyotherdemonstrable
adversetrendsthatindicatetheprobabilitythatthereislikelytobematerialinjurybyreasonof
imports(orsaleforimportation)ofthesubjectmerchandise(whetherornotitisactuallybeing
importedatthetime).19U.S.C.§1677(7)(F)(i).Toorganizeouranalysis,wediscusstheapplicable
statutorythreatfactorsusingthesamevolume,price,andimpactframeworkthatappliestoour
materialinjuryanalysis.Statutorythreatfactors(I),(II),(III),(V),and(VI)arediscussedinthe
analysisofsubjectimportvolume.Statutorythreatfactor(IV)isdiscussedintheanalysisofsubject
importpriceeffects.Statutoryfactors(VIII)and(IX)arediscussedintheanalysisofimpact.
Statutoryfactor(VII)concerningagriculturalproductsisinapplicableintheseinvestigations,and
statutoryfactor(I)doesnotapplyintheinvestigationofimportsfromCanada.
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B. CumulationforThreat
WemustconsiderwhethertocumulatesubjectimportsfromCanadaandChinafor
purposesofouranalysisofthreatofmaterialinjury.Incontrasttocumulationforpurposes
ofpresentmaterialinjury,cumulationforanythreatanalysisisdiscretionary.Undersection
771(7)(H)oftheTariffAct,theCommissionmay“totheextentpracticable”cumulatively
assessthevolumeandpriceeffectsofsubjectimportsfromallcountriesastowhich
petitionswerefiledonthesamedayiftherequirementsforcumulationinthematerial
injurycontextaresatisfied. 251
InsectionVabove,wefoundthattherequirementsforcumulatingsubjectimports
forourmaterialinjuryanalysisweresatisfied.Forouranalysisofthreatofmaterialinjury,
however,wefindthatsubjectimportsfromCanadaandChinaarenotlikelytocompete
undersimilarconditionsofcompetitionintheU.S.marketintheimminentfuture.Webase
thisconclusiononthefactthatthelargestsourceofsubjectimportsfromCanadaduring
thePOI(BaldorCanada)closeditsSt.Claire,QuebecfacilityonMay27,2016andrelocated
itsfinishingequipmentfromCanadatotheBaldorfacilitiesinWeavervilleandMarion,
NorthCarolina. 252NosuchdisruptionoccurredthatwouldaffectparticipationintheU.S.
marketbytheindustryinChinaintheimminentfuture.
Wehaveconsideredpetitioner’svariousargumentsaboutthestatusofBaldor
Canada’soperationsandthesignificanceoftheclosureofthisfacilityrelativetotheIMTDC
industryasawholeinCanada,butwefindsuchargumentsunconvincingandlackingin
recordsupport.Forexample,petitionersuggeststhatBaldorcloseditsoperationsinMay
2016andshiftedthemtotheUnitedStates“afterthePetitionswerefiledandcoinciding
withtheDepartmentofCommerce’simpositionof191.34percentpreliminarydutieson
IMTDCimportsfromCanada.” 253Infact,***.254InitsNovember10,2015U.S.producer
questionnaire,Baldorreportedthat“***,”255andinitsNovember23,2015postconference
brief,Baldorreportedthatit***.256By***.257
Thependencyoftheseinvestigationsplayedaroleinthe***ofBaldorCanada’sSt.
Clairefacility,258butseveralotherreasonsalsomotivatedtheclosure.ABB’sApril2016
pressreleasenotedthatthe“currenteconomiccontext,theslowdowninworldmarkets
25119U.S.C.§1677(7)(H).
252CRatIͲ5toIͲ6,IIIͲ5;PRatIͲ4,IIIͲ3.
253Petitioner’sPosthearingBriefatExhibit1at18Ͳ19.
254CRatIIIͲ7;PRatIIIͲ4.BaldorhadalreadypermanentlycloseditsaffiliatedIMTDCfacility
inChinainDecember2014.CRatIͲ6n.17,VIIͲ13;PRatIͲ5n.17,VIIͲ8.
255Baldor’sU.S.ProducerQuestionnaire,EDISDoc.569086atAnswertoQuestionIIͲ3
(reportedunderthecategoryof***).
256Baldor’sNovember23,2015Postconf.Briefat38.
257CRatIIIͲ7;PRatIIIͲ4.
258In***.CRatIIIͲ7;PRatIIIͲ4.InanApril2016pressreleaseannouncingthedecisionto
closeBaldorCanadaandrelocatetheequipmenttoNorthCarolina,ABBidentifieduncertainties
associatedwiththefilingoftheU.S.antidumpingdutypetitiononIMTDCsfromCanadaasamong
severalreasonsfortheclosure.CRatIIIͲ7;PRatIIIͲ4.
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andinstabilityinoilandgaspricesareallfactorsthathaveledtoadeclineindemandfor
productsmadeintheinstallationofSt.Claire.” 259ABBalsoreportedthat“this
consolidationofoperationswillallowustotakeadvantageoftheexcesscapacityofour
otherfacilities,toenhanceourcompetitivenessandimprovetheservicetoourNorth
Americancustomers.” 260
PetitionerspeculatesthatitisstillpossibleforBaldortoresumeitsIMTDCfinishing
operationsinCanadaatanymoment.261***.262Inresponsetoquestionsfromthe
Commission’sstaff,BaldorCanadareportedthat***.263
Petitionerfurtherassertsthat,despiteBaldorCanada’sclosure,theindustryin
Canadamaintains“massive”castingandfinishingcapacityforIMTDCs.Petitionerarguesin
itsprehearingandposthearingbriefsthatBaldorCanadafunctionedsolelyasafinisherand
thatatleast29ironfoundriesinCanadathatproduced843millionpoundsofironcastings
in2014andover500machiningoperationsinOntarioandnumerousothermachining
operationselsewhereinCanadacontinuetooperate.264Werejectpetitioner’scontentions
asspeculativeforseveralreasons.
TheCommissionissuedforeignproducer/exporterquestionnairesto23firmsthat
werepossibleproducers/exportersofIMTDCsinCanadabasedoninformationcontainedin
***recordsandinformationsubmittedinthepetitions. 265Weobservethatthepetitions,
whichinitiallyrequestedamuchbroaderscopeofimportedsubjectmerchandise,identified
onlyninepossibleproducersofsubjectmerchandiseinCanada,andfouroftheCanadian
firmslistedinthepetitionsreportedthattheyarenotmanufacturersofIMTDCs. 266Usable
questionnairedatawerereceivedfromonefirm(BaldorCanada),whichestimatedthatit
accountedforapproximately***percentofallproductionofIMTDCsinCanadaand
approximately***percentofexportsofsubjectmerchandisefromCanadatotheUnited
Statesin2015. 267NootherfirmsreportedthattheyproducedIMTDCsinCanada,and
259CRatIIIͲ7;PRatIIIͲ4.Initscertifiedforeignproducerquestionnaireresponseinthefinal
phaseoftheseinvestigations,BaldorCanadareportedthat***.ForeignProducerQuestionnaire,
EDISDoc.593979(Oct.21,2016).
260CRatIIIͲ7;PRatIIIͲ4.
261Petitioner’sPosthearingBriefatExhibit1at20.
262ForeignProducerQuestionnaire,EDISDoc.593979(Oct.21,2016).
263Baldor’sNovember23,2015Postconf.BriefatExhibit1at20;seealsoid.at38,Exhibit2
atparas.22Ͳ23.
264Petitioner’sPosthearingBriefat13,Exhibit1at18Ͳ20;Petitioner’sPrehearingBriefat14Ͳ
15. 265CRatVIIͲ3;PRatVIIͲ3.
266CRatVIIͲ4n.9;PRatVIIͲ3n.9.Moreover,intheircommentsonthedraftquestionnaires
forthefinalphaseoftheseinvestigations,nopartyrespondedtotheCommission’srequestinits
preliminarydeterminationstoidentifyanyadditional“foundriesandanyotherfirmsthatmightbe
producingunfinishedorfinishedIMTDCsinCanada.”CRatVIIͲ3;PRatVIIͲ3;Confidential
PreliminaryViewsat62n.230;USITCPub.4587at40n.230.
267CRatVIIͲ3&n.4;PRatVIIͲ3&n.4.
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51
Commerceselectedonlyonefirm(BaldorCanada)asthemandatoryrespondentforits
antidumpingdutyinvestigationofIMTDCsfromCanada. 268
BaldorCanadaaccountedfornearlyallknownimportsofsubjectmerchandise
duringthePOI,andthereisnoindicationthatanotherfirminCanadawillexport
meaningfulvolumesofunfinishedorfinishedIMTDCstotheUnitedStatesintheimminent
future.269BaldorCanada’sreportedexportsoffinishedIMTDCsfromCanadatotheUnited
Statesin2015wereequivalentto***percentofU.S.importsofIMTDCsfromCanada
reportedinU.S.importerquestionnairesfor2015. 270DomesticproducerBaldor,***,271
was***importerofsubjectmerchandisefromCanada.272Otherfirmshadbeenidentified
asleadingimportersofsubjectmerchandisefromCanadaduringthepreliminaryphaseof
theseinvestigations(***),butduetomodificationsinthescope,thesefirmsnotifiedthe
CommissionthatCommercehadexcludedtheirimportsfromthescopeofsubject
merchandise.273
268CRatIͲ5toIͲ6;PRatIͲ4;81Fed.Reg.75,039,75,039(Oct.28,2015).
269Indeed,eventhoughtheCommissionmustbaseitsthreatanalysisonrecordevidence,
notconjectureorspeculation,whenpressedatthehearingtoidentifylikelysourcesofsubject
merchandisefromCanadaintheimminentfuture,TBW’switnessadmittedthatdoingsowould“be
speculationonmypart.”HearingTr.at102.
270CRatVIIͲ3;PRatVIIͲ3.
271CR/PRatTableIIIͲ2.
272CRatIͲ5;PRatIͲ4.TheCommissioninstructedimporterstoreporttheirimportsbased
onthecountryoforiginofthecasting.***firmsreportedU.S.importsofsubjectlargeͲdiameter
IMTDCsfromCanada.U.S.importerBaldor(whichaccountedfor***percentofsubjectimports
fromCanadain2015intermsofpiecesand***percentintermsofvalue)sourced***.U.S.
importer***(whichaccountedfor***percentofsubjectimportsfromCanadain2015intermsof
piecesand***percentintermsofvalue)listed90firmsasCanadianproducersoftheitemsit
imported;ofthese90firms,***;importersfortwoofthesefirms(***)reportedthattheydidnot
importsubjectmerchandisefromCanada;andU.S.importer***submittedaquestionnaire
response.U.S.importer***(whichaccountedfor***percentofsubjectimportsfromCanadain
2015intermsofpiecesand***percentintermsofvalue)sourcedallofitsimportsfrom***.U.S.
importer***(whichaccountedfor***percentofsubjectimportsfromCanadain2015intermsof
piecesand***percentintermsofvalue)sourcedallofitsimportsfrom***.U.S.importer***
(whichaccountedfor***percentofsubjectimportsfromCanadain2015intermsofpiecesand
value)didnotreporttheCanadianproducer.U.S.importer***(whichimported***)didnotknow
theCanadianproducer.U.S.ImporterQuestionnaireResponses.
273CRatIͲ5;PRatIͲ4;MemorandumINVͲNNͲ089atIͲ6(Dec.7,2015).ImportsfromCanada
ofwhatturnedouttobeoutͲofͲscopemerchandiseby***weresosizablethattheCommission
highlightedtheirimportanceinitspreliminarydeterminations.ConfidentialPreliminaryViewsat61
n.227;USITCPub.4587at39n.227(“Forexample,thecurrentrecordsuggeststhat***islargely
responsiblefortheincreaseinaggregateU.S.importsfromCanadaduring2013andsubsequent
declinethereafter,whereas***combinedarelargelyresponsiblefortheincreaseinaggregateU.S.
importsfromallothersourcesduring2014andsubsequentdeclinethereafter.…Totheextentthat
theirimportsconsistofmerchandisecorrespondingtotherevisedscopeoftheseinvestigations,we
seekadditionalinformationaboutdemandtrendsthatmayexplaintheseshiftsinvolume.”)
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Furthermore,foundriesproduceabroadrangeofproducts,withIMTDCcastings
likelyaccountingforasmallshare.Forexample,U.S.foundryWaupacareportedthat
unfinishedIMTDCsaccountedforlessthan***percentofitsproduction. 274Inanyevent,
subjectimportsofunfinishedIMTDCsfromCanada“peaked”at***piecesin2014and
neveraccountedformorethan$***inanygivenperiodbetweenJanuary2013andJune
2016,andunfinishedIMTDCsaccountedforlessthan***percentofallIMTDCimportsfrom
allsourcesin2015. 275
PetitionerassertsthatBaldorCanadahad“aclosesupplierrelationship”withLaforo
IronFoundry(“LaforoFoundry”),itsformerneighborinCanadafromwhichitusedto
purchaseunfinishedIMTDCs,andpetitionercontendsthatBaldor(orothers)willpurchase
unfinishedIMTDCsfromLaforoFoundrythatwillbeexportedtotheUnitedStatesforU.S.
finishingoperations. 276TheinformationthatpetitionersubmittedaboutLaforoFoundry,
however,appearstoundermineratherthansupportpetitioner’sargumentregarding
IMTDCfoundriesinCanada.Thesearticlesindicatethat,asofOctober2005,Laforo
Foundryhadacapacityof“25,000tonnes”anddirected“aquarterofitsproduction”to
BaldorCanada’scorporatepredecessor(MaskaPulleys),withtherestofLaforoFoundry’s
productioninvolvingproductsoutsidethescopeoftheseinvestigations,“suchascastingsof
moldedpartssuchasdiscbrakes,replacementparts,heatingwood,etc.”AsofOctober
2005,MaskaPulleyswas“theonlymanufacturingcompanyinthisnicheinCanada,”and
MaskaPulleysheld“aboutathirdoftheCanadianmarketand5percentoftheU.S.
market.”AccordingtoaMay2013article,LaforoFoundryspecializedinpartsfor
automobilesandtrains(i.e.,notproductsthatarethefocusoftheseinvestigations),andit
wasinvesting$6.0milliontomodernizeitsfoundry.AccordingtoaJuly2015article,Laforo
Foundrywasengaginginadditionalmodernizationefforts“tomovefromatraditionaltoa
moremodernfoundry”becausethe“qualitythat{it}hadbeforewaswaveringandsomeof
{its}customersareverydemanding.Forthequality,ittakesconsistencywhichwasnoteasy
withthetraditionalmethod.” 277
Otherevidencecorroboratesthattherecouldbedifficultiesobtainingunfinished
IMTDCsinCanada.BaldorCanadahadonlyfinishingequipment,soitdidnotmanufacture
anyunfinishedIMTDCs. 278BaldorCanadadidnotsourceallofitsunfinishedIMTDCsfrom
Canada.279Moreover,in***reportedincreasingdifficultysourcingblankswithin
274Eventhisestimateisbelievedtobeoverstated.CRatIIIͲ2;PRatIIIͲ1toIIIͲ2.
275CR/PRatTableIVͲ3.
276Petitioner’sPosthearingBriefatExhibit1at19;Petitioner’sPrehearingBriefat15,
Exhibit3(indicatingthatLaforoFoundry’sfounderandPresidentwasthefounderandeventually
majorityshareholderinMaskaPulleysbeforeBaldorpurchasedMaskaPulleysinOctober2008).We
notethatBaldorcurrentlysourcescastingsfortheIMTDCsitmanufacturesonthefinishing
equipmentmovedfromCanadatotheUnitedStatesprimarilyfromfoundriesin***.CRatVIIͲ4;PR
atVIIͲ4.277Petitioner’sPrehearingBriefatExhibit3.
278CRatVIIͲ5;PRatVIIͲ4.
279BaldorCanadareportedthatitsourceditsunfinishedIMTDCsfromfoundriesin***.U.S.
ImporterQuestionnaire,EDISDoc.***.
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Canada.280Purchaser***alsoreportedthatsince2012,itsCanadiansupplierhas“shorted”
shipmentsbecauseofalackofavailabilityofcastings,andbecausethesupplierclosedin
2015. 281
Fortheforegoingreasons,wedeterminethattheclosureofthelargestsourceof
subjectmerchandisefromCanadahasfundamentallyalteredhowanyIMTDCindustryin
CanadawillcompeteintheU.S.marketintheimminentfuture.Intheabsenceofany
similardisruptionaffectingparticipationintheU.S.marketbytheIMTDCindustryinChina,
wehaveexercisedourdiscretionnottocumulativelyassessthevolumeandpriceeffectsof
subjectimportsfromCanadaandChinaforpurposesofourthreatanalysis.
C. NoThreatofMaterialInjurybyReasonofSubjectImportsfromCanada
1. LikelyVolumeofSubjectImportsfromCanada
TheUnitedStateswasthelargestdestinationforIMTDCsproducedinCanadaduring
thePOI. 282Nevertheless,thevolumeofU.S.shipmentsofsubjectimportsfromCanada,by
value,declinedoverallduringthePOI;itincreasedfrom$***in2013to$***in2014,
declinedto$***in2015(alowerlevelthanin2013),andwaslowerininterim2016$(***)
thanininterim2015$(***).283TheshareofapparentU.S.consumption,byvalue,for
subjectimportsfromCanadaincreasedfrom***percentin2013to***percentin2014
and2015,andtheirmarketsharewaslowerininterim2016(***percent)thanininterim
2015(***percent).284BaldorCanada,thesolerespondingexporterofsubjectmerchandise
inCanada,reportedproducing***IMTDCsontheproductionequipmentusedto
280***Questionnaire,EDISDoc.***(Oct.21,2016).
281CRatIIͲ8;PRatIIͲ6.
282ExportstotheUnitedStatesaccountedfor***percentoftheCanadianindustry’stotal
reportedshipmentsin2013,***percentin2014,***percentin2015,***percentininterim2015,
and***percentininterim2016.CR/PRatTableVIIͲ2.
283Intermsofpieces,thevolumeofU.S.shipmentsofsubjectimportsfromCanadaalso
declinedoverallduringthePOI;itincreasedfrom***piecesin2013to***piecesin2014,
decreasedto***piecesin2015,andwaslowerininterim2016(***pieces)thanininterim2015
(***pieces).CR/PRatTableIVͲ6.EndͲofͲperiodinventoriesinCanadadeclinedfrom***piecesin
2013to***piecesin2015,werelowerininterim2016(***)thanininterim2015(***pieces),and
areprojectedtobe***in2017.CR/PRatTableVIIͲ2.AlthoughendͲofͲperiodU.S.inventoriesof
subjectmerchandisefromCanadaincreasedoverallfrom***piecesin2013to***piecesin2015
andwerehigherininterim2016(***pieces)thanininterim2015(***pieces),CR/PRatTableVIIͲ
10,thisisconsistentwithBaldorCanada’srelocationofproductionoperationsfromCanadatothe
UnitedStates.Moreover,importersreported***arrangedimportsofunfinishedIMTDCsand***
arrangedimportsoffinishedIMTDCsfromCanadaafter2016.CR/PRatTableVIIͲ11.
284Intermsofpieces,themarketshareofsubjectimportsfromCanadadeclinedfrom
***percentin2013to***percentin2014and***percentin2015,andtheirmarketsharewas
lowerininterim2016(***percent)thanininterim2015(***percent).CR/PRatTableIVͲ7.
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manufactureIMTDCsinCanada.285Moreover,BaldorCanadaprojectsthatitsproduction
capacityandproductionwillbe***intheimminentfuture,giventheclosureofitsSt.Claire
facility,relocationoftheequipmenttotheUnitedStates,andconsolidationofits
operationsintheUnitedStates.286TheclosureofBaldorCanadaeliminatesbyfarthe
largestsourceofsubjectimportsfromCanadaduringthePOI. 287Asdiscussedinmore
detailabove,althoughtheCommissionsurveyedmultiplepossibleproducersofIMTDCsin
Canada,thereisnorecordevidencethatanyotherfirmsinCanadawillexportmeaningful
volumesofunfinishedorfinishedIMTDCstotheUnitedStatesintheimminentfuture,with
evenpetitionerconcedingthatsuchaconclusionwouldbespeculative.288Basedonthe
recordandourfindingsabove,thereisnoindicationonthisrecordthattherearelikelyto
besignificantvolumesofsubjectimportsfromCanadaoffinishedorunfinishedlargeͲ
diameterIMTDCsintotheU.S.marketintheimminentfuture,letalonealikelysignificant
increaseinsubjectimportsfromCanada.
2. LikelyPriceEffectsofSubjectImportsfromCanada
SubjectimportsfromCanadaundersoldthedomesticlikeproductinall84instances
(involving21,999pieces)atmarginsthatrangedfrom8.4percentto63.3percent.289Aswe
foundabove,however,evenwhentheundersellingbysubjectimportsfromCanadais
combinedwiththeundersellingbysubjectimportsfromChina,cumulatedsubjectimports
fromCanadaandChinadidnothavesignificantpriceeffects,giventheabsenceofany
significantmarketshareshiftsorevidenceindicatingthatcumulatedsubjectimports
depressedpricesofthedomesticlikeproductorpreventedincreasesinpricesofthe
domesticlikeproductthatotherwisewouldhaveoccurredtoasignificantdegree.Given
ourfindingthatthevolumeofsubjectimportsfromCanadaisunlikelytobesignificantand
intheabsenceofevidencethatsubjectimportsfromCanadahavecausedsignificantprice
effectsevenwhentheywerepresentintheU.S.market,wefindthattheseimportsare
unlikelytocausepriceeffectsintheimminentfuture.Weconsequentlyconcludethat
subjectimportsfromCanadaareunlikelytoentertheU.S.marketatpricesthatarelikelyto
285CR/PRatTableVIIͲ3.
286ReportedproductioncapacityinCanadawas***piecesbetween2013and2015and***
piecesininterim2015andinterim2016,andisprojectedtobe***piecesin2017.Productionof
subjectmerchandiseinCanadawas***piecesin2013,***piecesin2014,***piecesin2015,***
piecesininterim2015,and***piecesininterim2016.Capacityutilizationintermsofpieces
declinedirregularlyfrom***percentin2013to***percentin2015andwaslowerininterim2016
(***percent)thanininterim2015(***percent),asBaldorCanadapreparedtocloseitsoperating
facility.CR/PRatTableVIIͲ2.
287Wenotethatmostpurchasers(22of24)reportedthatnonewsuppliershaveentered
theU.S.marketsinceJanuary1,2013,andtheonlynewentrantstheyreported***.CRatIIͲ8;PR
atIIͲ6. 288HearingTr.at102.
289CR/PRatTableVͲ2toTableVͲ9.
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havesignificantdepressingorsuppressingeffectsonpricesofthedomesticlikeproductor
thatarelikelytoincreasedemandforfurtherimports.
3. LikelyImpactofSubjectImportsfromCanada
PetitionerandotherdomesticproducersreportedthatsubjectimportsfromCanada
andChinaaffectedtheirexistingdevelopmentandproductionefforts,growth,investment,
andabilitytoraisecapital,andtheyanticipatedfurthereffectsintheabsenceofreliefasa
resultoftheseinvestigations. 290Petitionerarguesthatthedomesticindustryis
vulnerable.291Althoughthedomesticindustryexperiencedpoorfinancialperformanceand
declinesinsomeofitsotherperformanceindicatorsincertainportionsofthePOI,as
indicatedinsectionVI.Eabove,wedidnotfindacorrelationbetweenthesedomestic
industryperformanceindicatorsandcumulatedsubjectimports.Unlikethevolumeof
cumulatedsubjectimports,whichwefoundabovetobesignificant,wefindthatthe
volumeofsubjectimportsfromCanadaisunlikelytobesignificantintheimminentfuture.
WefurtherfindthatsubjectimportsfromCanadaareunlikelytoentertheU.S.marketat
pricesthatarelikelytohavesignificantpriceͲdepressingorͲsuppressingeffectsonpricesof
thedomesticlikeproductorthatarelikelytoincreasedemandforfurtherimports.Based
ontheseconsiderations,wefindthatsubjectimportsfromCanadaarenotlikelytohavea
significantimpactonthedomesticindustryintheimminentfuture.Therefore,wedonot
findthatmaterialinjurybyreasonofsubjectimportsfromCanadawouldoccurabsentthe
issuanceofanantidumpingdutyorder.
Accordingly,weconcludethatthedomesticindustryisnotthreatenedwithmaterial
injurybyreasonofsubjectimportsfromCanada.
D. NoThreatofMaterialInjurybyReasonofSubjectImportsfromChina
1. LikelyVolumeofSubjectImportsfromChina
TheIMTDCindustryinChinareportedlargecapacityandproductionofsubject
merchandise.292Ithastheabilitytoshiftproductionfromotherproductstosubject
290CR/PRatAppendixF.
291Petitioner’sPosthearingBriefat12,14;Petitioner’sPrehearingBriefat40Ͳ42,48Ͳ49.
292ReportedproductioncapacityinChinawas***piecesin2013and2014,***piecesin
2015,and***piecesininterim2015andinterim2016;respondingproducersinChinaproject
similarlevelsin2016and2017(***pieces).ProductionofsubjectmerchandiseinChinawas***
piecesin2013,***piecesin2014,***piecesin2015,***piecesininterim2015,and***piecesin
interim2016,andisprojectedtobeatsimilarlevelsin2016(***pieces)and2017(***pieces).
Capacityutilizationintermsofpieceswas***percentin2013,***percentin2014,***percentin
2015,***percentininterim2015,and***percentininterim2016,andisprojectedtobe***
percentin2016and***percentin2017.CR/PRatTableVIIͲ6.
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merchandise.293EventhoughtheindustryinChinahastheabilitytoexportsignificant
volumesofsubjectmerchandisetotheUnitedStates,exportstotheUnitedStates
accountedforadecliningshareoftotalshipmentsbytheindustryinChina(lessthan
oneͲthird). 294Consistentwiththistrend,thevalueofU.S.shipmentsofsubjectimports
fromChinadeclinedoverallduringthePOI;itincreasedfrom$***in2013to$***in2014,
declinedto$***in2015,andwaslowerininterim2016$(***)thanininterim2015
$(***).295TheshareofapparentU.S.consumptionrepresentedbysubjectimportsfrom
China,byvalue,wasrelativelystable;itdeclinedfrom***percentin2013to***percentin
2014,increasedto***percentin2015andwaslowerininterim2016(***percent)thanin
interim2015(***percent).296U.S.importersdidnotreportarrangingforsizablevolumes
293CR/PRatTableVIIͲ7(indicatingthatapproximately***ofallreportedIMTDCproduction
onsharedequipmentbyproducersinChina,bypieces,consistsofsubjectmerchandise).Other
productsreportedlymanufacturedinChinaonthesameequipmentassubjectmerchandiseinclude
***.CRatVIIͲ15;PRatVIIͲ9.PetitionercontendsthattheIMTDCindustryinChinabenefitsfrom
numerouscountervailablesubsidyprograms,manyofwhichitallegesaredependentonexport
performance.Petitioner’sPosthearingBriefat14Ͳ15;Petitioner’sPrehearingBriefat49Ͳ50.Inits
finalcountervailingdutydeterminationregardingIMTDCsfromChina,Commerceidentifiedfive
countervailableprogramsthatitconcludedPowermachutilized:(1)policyloanstotheIMTDC
industry,(2)provisionofinputsforlessthanadequateremuneration,(3)importtariffandvalueͲ
addedtariffexemptionsforforeignͲinvestedenterprisesandcertaindomesticenterprisesusing
importedequipmentinencouragedindustries,(4)preferentialtaxrateforcompaniesinthe
WesternDevelopmentArea,and(5)reportedgrants.Commerceassignedacountervailingdutyrate
of33.26percenttoPowermach,anadversefactsavailablerateof163.46percenttocertainnamed
nonͲcooperativefirms,andarateof33.26percenttoallotherfirms.81Fed.Reg.at75,037(Oct.
28,2016);CR/PRatTableIͲ1;CRatIͲ9toIͲ11;PRatIͲ6toIͲ9;Commerce’sIssuesandDecision
MemorandumfortheFinalDeterminationintheCountervailingDutyInvestigationofCertainIron
MechanicalTransferDriveComponentsfromthePeople’sRepublicofChina(Oct.21,2016),EDIS
Doc.594776,file1132084.WeacknowledgeCommerce’sfindingsthattherewereseveral
countervailablesubsidyprogramsbenefittingIMTDCproducersinChina.Wehaveconsideredthe
natureoftheseprograms,noneofwhichCommercefoundtobeanexportsubsidydescribedin
Article3or6.1oftheWTOSCMAgreement,inconjunctionwiththeotherfactorspertainingtolikely
subjectimportvolumeandpriceeffectsdiscussedbelowinascertainingwhetherimportsofthe
subjectmerchandisearelikelytoincrease,andanyeffectslikelytobecausedbythecountervailable
subsidies.
294ExportstotheUnitedStatesaccountedfor***percentoftotalshipmentsbytheindustry
inChinain2013,***percentin2014,***percentin2015,***percentininterim2015,and
***percentininterim2016,andU.S.exportsareprojectedtoaccountfor***percentoftotal
shipmentsin2016and***percentin2017.CR/PRatTableVIIͲ6.
295Intermsofpieces,thevolumeofsubjectimportsfromChinaincreasedfrom***pieces
in2013to***piecesin2014and***piecesin2015,andwaslowerininterim2016(***pieces)
thanininterim2015(***pieces).CR/PRatTableIVͲ6.
296Intermsofpieces,themarketshareofsubjectimportsfromChinaincreasedfrom
***percentin2013to***percentin2014and***percentin2015andwaslowerininterim2016
(***percent)thanininterim2015(***percent).CR/PRatTableIVͲ7.
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ofsubjectmerchandisefromChinaintheimminentfuture.297Nofirmsparticipatinginthis
proceedingidentifiedanyotherimportreliefproceedingsintheUnitedStatesorother
countriesregardingIMTDCs.298
WeacknowledgethatourdatacoveragefortheIMTDCindustryinChinais
uncertain.Althoughthepetitionsidentified31possibleproducersofsubjectmerchandise
inChina,theCommissionissuedforeignproducer/exporterquestionnairestonearlydouble
thatamount(61possiblefirms),includingfirmsnamedinthepetitionsandthoseidentified
throughsearchesof***recordsconcerningU.S.importsunderthreeHTSUSstatistical
reportingnumbers.299Petitionerreliedonthesestatisticalreportingnumbersasthebest
availableinformationforitscalculationofU.S.importsinitspetitions,butitacknowledged
thatthesestatisticalreportingnumberscorrespondtobroadbasketcategoriesthatlikely
includemerchandisethatisoutsidethescopeidentifiedinthepetitions(whichhas
narrowedconsiderablyintheinterveningtime,asdiscussedabove). 300Inthefinalphaseof
theseinvestigations,theCommissionreceivedusablequestionnaireresponsesfromseven
firms,includingPowermach,301whichChineseRespondentsreportedwasthe“singlelargest
producerandexporterofChina.” 302Basedoninformationprovidedbytheresponding
producersinChina,thereporteddatainthefinalphaseoftheseinvestigationsaccounted
forapproximately***percentofallIMTDCproductioninChinaandapproximately
***percentofexportsofsubjectmerchandisefromChinain2015. 303Thefirms’reported
exportswereequivalentto***percentofU.S.importsofIMTDCsfromChinain2015as
reportedinimporterquestionnaireresponses.304
PetitioneraskstheCommissiontorelyonadversefactsavailablebasedonits
argumentthatthequestionnairedatasubstantiallyunderstatethesizeoftheindustryin
Chinaintheabsenceofquestionnaireresponsesfromninespecificfirms,eightofwhichit
297U.S.importers’arrangedimportsofsubjectmerchandisefromChinawere***piecesin
thethirdquarterof2016,***piecesinthefourthquarterof2016,***piecesinthefirstquarterof
2017,and***piecesinthesecondquarterof2017.CR/PRatTableVIIͲ11.Inventoriesarenot
unusualinthisindustrygiventhelargenumberofproductpermutationsandtheuseofcatalogues
toadvertiseofferings.CRatVͲ4;PRatVͲ3.EndͲofͲperiodinventoriesinChinaandU.S.importers’
endͲofͲperiodinventorieswererelativelystable.EndͲofͲperiodinventoriesofsubjectmerchandise
inChinawere***piecesin2013,***piecesin2014,***piecesin2015,***piecesininterim2015,
and***piecesininterim2016,andareprojectedtobe***piecesin2016and***piecesin2017.
CR/PRatTableVIIͲ6.U.S.importers’endͲofͲperiodinventoriesofsubjectmerchandisefromChina
were***piecesin2013,***piecesin2014,***piecesin2015,***piecesininterim2015,and
***piecesininterim2016.CR/PRatTableVIIͲ10.
298CRatVIIͲ23;PRatVIIͲ13.
299CRatVIIͲ11;PRatVIIͲ7.
300CRatIVͲ3;PRatIVͲ3;Petitions,vol.Iat10,15.
301CRatVIIͲ11;PRatVIIͲ7.
302Confer.Tr.at34(Grimson).
303CRatVIIͲ11;PRatVIIͲ7.
304CRatVIIͲ11;PRatVIIͲ7.
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arguesparticipatedinCommerce’sproceedings.305Wenotethatpetitionerneveridentified
fourofthesefirmsinitspetitionsaspossibleproducers/exportersofsubjectmerchandisein
China.306AlthoughtheCommissiondidnotreceiveaforeignproducerquestionnaire
responsefromMinYue(theninthfirmreferencedbypetitioner)inthefinalphaseofthese
investigations,MinYuesubmittedaquestionnaireinthepreliminaryphaseofthese
investigations, 307whichwehaveconsidered.ThedatathatMinYuesubmittedinthe
preliminaryphaseoftheseinvestigationsmaybeoverstatedbecausethequestionnaire
predatedseveralscopeamendmentsthatnarrowedtheuniverseofimportssubjectto
theseinvestigations.Nevertheless,MinYue’sdataareconsistentwiththeinformation
discussedabovefortheIMTDCindustryinChina.MinYue***.308
Wealsoquestionthepremiseunderpinningpetitioner’sargumentthatthe
Commission’srecorddoesnotcontainquestionnairedatafromcertainfirmsthat
participatedtosomedegreeinCommerce’sproceedings.Thefactthatninefirmsidentified
bypetitionersubmittedinformationonthevolumeandvalueoftheirexportsofIMTDCsto
Commerceattheoutsetoftheinvestigationsisnotdeterminativeofwhetherthesefirms
actuallymanufacturedorexportedsubjectmerchandise,giventhemanyinterveningscope
changes.Indeed,Commerceselectedtwomandatoryrespondentstoinvestigateforits
antidumpingandcountervailingdutyproceedingsinvolvingIMTDCsfromChina
(PowermachandNOKWuxi)becausethey“accountedforthelargestvolumeofexportsof
themerchandiseunderconsideration.” 309Oneofthem(NOKWuxi)subsequentlynotified
CommerceofitsintenttowithdrawfromCommerce’sinvestigationscontingenton
Commerce’sacceptanceofpetitioner’srequesttoexcludecertainTVDsfromthe
investigations’scope.OnceCommerceexcludedTVDsfromthescopeinitspreliminary
305Petitioner’sPosthearingBriefat12Ͳ13,Exhibit1at25Ͳ26;HearingTr.at37,51Ͳ52
(Pickard);Petitioner’sPrehearingBriefat14,42Ͳ44.Inthesesubmissions,petitioneralsoargued
thatthereareatleast15,000foundriesinChinathatcollectivelyproducedmorethan74billion
poundsofironcastingsin2014.AsweexplainedinsectionVII.Babove,however,foundriesdonot
existsolelytomanufactureIMTDCcastings,andU.S.importsofunfinishedIMTDCswererelatively
lowoverthePOI.
306CRatVIIͲ12n.17;PRatVIIͲ7n.17.
307Inthepreliminaryphaseoftheseinvestigations,theCommissionreceivedusable
questionnaireresponsesfromfourfirmsmanufacturingsubjectmerchandiseinChina:***;Min
Yue;BaldorMaska;andPowermach.Thesefirmscollectivelyaccountedfor***percentofall
IMTDCproductioninChinaandapproximately***percentofexportstotheUnitedStatesin2014.
ConfidentialPreliminaryViews,EDISDoc.571266at58;USITCPub.4587at38.BaldorMaskadid
notsubmitaforeignproducerquestionnaireinthefinalphaseoftheseinvestigations;itceased
productionoperationsinDecember2014,asindicatedearlier.Confer.Tr.at22(McCartney);CRat
IIIͲ5;PRatIIIͲ3.
308MinYue’sForeignProducerQuestionnaire,EDISDoc.570526atTableIIͲ10(Nov.25,
2015). 309See,e.g.,Commerce’sIssuesandDecisionMemorandumfortheFinalDeterminationin
theCountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfrom
thePeople’sRepublicofChina(Oct.21,2016),EDISDoc.594776,file1132084at2.
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59
determinations,NOKWuxi,whichreporteditselfasprimarilyanexporterofTVDs,withdrew
fromCommerce’sinvestigations. 310
Inthepreliminaryphaseoftheseinvestigations,respondentsreportedthat
PowermachandMinYuewerethelargestexportersofsubjectmerchandisefromChina,
andtheyreportedtheexistenceofperhapstwoorthreeotherfirmsofanysignificant
size.311TheCommission’srecordincludesinformationonbothoftheselargeexportersof
subjectmerchandisefromChina.Totheextentthattheinformationontherecord
concerningtheIMTDCindustryinChinaisincomplete,therecorddoesnotindicatethatthe
informationfromanyproducersofinͲscopeIMTDCsthatdidnotrespondtothe
Commission’sforeignproducerquestionnairewouldhavebeenappreciablydifferentfrom
theinformationobtainedfromtherespondingproducers(norhaspetitionersuggestedthat
isthecase).Therecorddoesnotcontain(norhaspetitionerprovided)publiclyavailable
informationabouttheIMTDCindustryinChina.TheGlobalTradeAtlasdataontherecord
concernamuchbroaderproductcategorythanIMTDCs(flywheelsandpulleys,including
pulleyblocks), 312andareinourviewlessprobativethantheinformationprovidedbythe
respondingproducersinChina.Inanyevent,thesedataindicatethatexportsfromChinato
theUnitedStatesofflywheelsandpulleysaccountforlessthanoneͲfifthoftotalexportsof
flywheelsandpulleysfromChina,byvalue;moreover,thesedatadonotindicatethat
exportsofflywheelsandpulleysfromChinatotheUnitedStates,byvalueorasa
percentageoftotalexportsfromChina,areincreasing. 313Consequently,wehaverelied
primarilyonthedatafromtherespondingforeignproducers,assupplementedwithother
availablerecordevidence,asthefactsavailableconcerningthesubjectindustryinChina.
Basedontherecord,wefindthatthevolumeofsubjectimportsfromChinaislikely
tobesignificantintheimminentfuture,butwedonotfindthatthereislikelytobea
significantincreaseintheseimports.Webasethisconclusiononavailableinformation
aboutthebehaviorofsubjectimportsfromChinabetweenJanuary2013andJune2016,
discussedabove,includingthatsubjectimportsfromChinamaintainedarelativelystable
shareoftheU.S.marketandthattheUnitedStatesaccountedforadecliningshareofthe
Chineseindustry’stotalshipmentsofIMTDCs(lessthanoneͲthird).TheChineseindustry’s
310CRatIͲ6n.18;PRatIͲ5n.18;Commerce’sIssuesandDecisionMemorandafortheFinal
DeterminationintheInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe
People’sRepublicofChina(Oct.21,2016),EDISDoc.594776;Commerce’sIssuesandDecision
MemorandaforthePreliminaryDeterminationintheInvestigationofCertainIronMechanical
TransferDriveComponentsfromthePeople’sRepublicofChina,EDISDoc.594778;NOK’s
withdrawalletter,EDISDoc.594779.
311ConfidentialPreliminaryViews,EDISDoc.571266at62Ͳ63;USITCPub.4587at40;
Confer.Tr.at34(Grimson).
312CR/PRatTableVIIͲ8;CRatVIIͲ17;PRatVIIͲ13(indicatingthatexportstatisticsunder
HarmonizedTariffSchedulesubheading8483.50asreportedbyStatisticsChinaintheGTAdatabase
includenotonlytheinͲscopeIMTDCsbutalsoasubstantialamountofitemsthatarenotatissuein
theseinvestigations,includingsteel,plastic,andaluminumflywheelsandpulleys,includingpulley
blocks).313CR/PRatTableVIIͲ8.
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60
capacitywasalsorelativelystableduringthePOI,andtherearenoreportedincreases
anticipated.Thus,thereisnobasistoconcludethatthelikelysignificantvolumeofsubject
importsfromChina,whichwearenotcumulatingwithsubjectimportsfromCanadaforour
threatanalysis,islikelytoincreasesignificantlyintheimminentfuture.
2. LikelyPriceEffectsofSubjectImportsfromChina
SubjectimportsfromChinaundersoldthedomesticlikeproductin133of144
instances(involving14,832pieces)atmarginsthatrangedfrom0.1percentto84.8
percent.314Aswefoundabove,however,evenwhentheundersellingbysubjectimports
fromChinaiscombinedwiththeundersellingbysubjectimportsfromCanada,cumulated
subjectimportsfromCanadaandChinadidnothavesignificantpriceeffects,giventhe
absenceofanysignificantmarketshareshiftsorevidenceindicatingthatcumulatedsubject
importsdepressedpricesofthedomesticlikeproductorpreventedincreasesinpricesof
thedomesticlikeproductthatotherwisewouldhaveoccurredtoasignificantdegree.In
lightofourfindingthatthevolumeofsubjectimportsfromChinaisunlikelytochange
significantlyintheimminentfutureandintheabsenceofevidencethatsubjectimports
fromChinahavecausedsignificantpriceeffectsevenwhentheywerepresentintheU.S.
marketandpervasivelyundersellingthedomesticlikeproduct,315wefindthatthese
importsareunlikelytocausepriceeffectsintheimminentfuture.Consequently,therecord
indicatesthatsubjectimportsfromChinaarenotlikelytoentertheU.S.marketatprices
thatarelikelytohavesignificantpricedepressingorsuppressingeffectsonpricesofthe
domesticlikeproductorthatarelikelytoincreasedemandforfurtherimports.
3. LikelyImpactofSubjectImportsfromChina
PetitionerandotherdomesticproducersreportedthatsubjectimportsfromCanada
andChinaaffectedtheirexistingdevelopmentandproductionefforts,growth,investment,
andabilitytoraisecapital,andtheyanticipatedfurthereffectsintheabsenceofreliefasa
resultoftheseinvestigations. 316Petitionerarguesthatthedomesticindustryis
vulnerable.317Althoughthedomesticindustryexperiencedpoorfinancialperformanceand
declinesinsomeofitsotherperformanceindicatorsincertainportionsofthePOI,wedid
notfindinsectionVI.Eaboveacorrelationbetweenthesedomesticindustryperformance
indicatorsandcumulatedsubjectimports.ShiftsinU.S.shipmentsandnetsalesforboth
thedomesticindustryandcumulatedsubjectimportsoftentrackedchangesinapparent
U.S.consumption,andchangesinthedomesticindustry’sfinancialperformanceappeared
mostaffectedbychangesinSG&AandCOGSduetochangesinoutputassociatedwith
changesinapparentU.S.consumption.
314CR/PRatTableVͲ2toTableVͲ9.
315CR/PRatTableVͲ2toTableVͲ9.
316CR/PRatAppendixF.
317Petitioner’sPosthearingBriefat12,14;Petitioner’sPrehearingBriefat40Ͳ42,48Ͳ49.
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61
WefindnoevidenceindicatingthatsubjectimportsfromChinaarelikelytohavea
significantimpactonthedomesticindustryintheimminentfuture.Asdiscussedabove,we
findthatthevolumeofsubjectimportsfromChinaislikelytobesignificantbutatlevels
equivalenttothoseduringthePOI.WefurtherfindthatsubjectimportsfromChinaare
unlikelytoentertheU.S.marketatpricesthatarelikelytohavesignificantpricedepressing
orsuppressingeffectsonpricesofthedomesticlikeproductorthatarelikelytoincrease
demandforfurtherimports.Basedontheseconsiderationsandtheabsenceofany
correlationbetweenthedomesticindustry’sconditionandthevolumeandpriceeffectsof
cumulatedsubjectimportsduringthePOI,wefindthatsubjectimportsfromChinaarenot
likelytohaveasignificantimpactonthedomesticindustryintheimminentfuture.
Therefore,wedonotfindthatmaterialinjurybyreasonofsubjectimportsfromChina
wouldoccurabsenttheissuanceofantidumpingandcountervailingdutyorders.
Accordingly,weconcludethatthedomesticindustryisnotthreatenedwithmaterial
injurybyreasonofsubjectimportsfromChina.
VIII. Conclusion
Forthereasonsstatedabove,wedeterminethatanindustryintheUnitedStatesis
notmateriallyinjuredorthreatenedwithmaterialinjurybyreasonofsubjectimportsof
largeͲdiameterIMTDCsfromCanadaandChinathatCommercefoundweresoldinthe
UnitedStatesatlessthanfairvalueandsubsidizedbythegovernmentofChina.
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IͲ1
PARTI: INTRODUCTION
BACKGROUND
TheseinvestigationsresultfrompetitionsfiledwiththeU.S.DepartmentofCommerce
(“Commerce”)andtheU.S.InternationalTradeCommission(“Commission”)byTBWood’s
Incorporated(“TBW”),Chambersburg,Pennsylvania,onOctober28,2015,allegingthatan
industryintheUnitedStatesismateriallyinjuredandthreatenedwithmaterialinjurybyreason
oflessͲthanͲfairͲvalue(“LTFV”)importsofcertainironmechanicaltransferdrivecomponents
(“IMTDCs”)1fromCanadaandChinaandsubsidizedimportsofIMTDCsfromChina.The
petitionersubsequentlyamendedand/orsupplementedthepetitionsonNovember5,
November6,November10,andNovember17,2015. 2Furtheramendmentsandclarificationsto
thescopelanguagewereproposedbythepetitioneronMarch30,June27,August4,August
17,andAugust22,2016,concerningtheexclusionofcertainfinishedtorsionalvibration
dampers(“TVDs”),certainTVDinnerrings,andcertainflywheelswithringgear.3Thefollowing
tabulationprovidesinformationrelatingtothebackgroundoftheseinvestigations. 45
Effective date Action
October 28, 2015
Petitions filed with Commerce and the Commission;
institution of Commission investigations (80 FR 67789,
November 3, 2015)
November 17, 2015
Commerce’s notices of initiation (80 FR 73716-73726,
November 25, 2015)
April 11, 2016
Commission’s preliminary countervailing duty determination
and alignment of final investigations (81 FR 21316)
June 8, 2016
Commerce’s preliminary antidumping duty determinations
(81 FR 36876-36881 and 36887-36890, June 8, 2016);
scheduling of final phase of Commission investigations
(81 FR 41318, June 24, 2016)
October 18, 2016 Commission’s hearing
October 28, 2016 Commerce’s final determinations (81 FR 75032-75042)
November 18, 2016 Commission’s vote
December 12, 2016 Commission’s views
1Seethesectionentitled“TheSubjectMerchandise”inPartIofthisreportforacomplete
descriptionofthemerchandisesubjecttotheseinvestigations.
2OnNovember5,2015andNovember17,2015,thepetitionerproposedrevisingthescopelanguage
tochange,amongotherthings,thedimensionandchemistryelementsofthescope.
3TheamendmentofMarch30,2016,wasaddressedinCommerce’spreliminarydeterminationscope
language.SubsequentamendmentswereaddressedinCommerce’sfinaldeterminationscopelanguage.
4PertinentFederalRegisternoticesarereferencedinapp.A,andmaybefoundattheCommission’s
website(www.usitc.gov).
5Alistofwitnessesthatappearedatthehearingispresentedinapp.Bofthisreport.
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IͲ2
STATUTORYCRITERIAANDORGANIZATIONOFTHEREPORT
Statutorycriteria
Section771(7)(B)oftheTariffActof1930(the“Act”)(19U.S.C.§1677(7)(B))provides
thatinmakingitsdeterminationsofinjurytoanindustryintheUnitedStates,theCommissionͲͲ
shallconsider(I)thevolumeofimportsofthesubjectmerchandise,(II)the
effectofimportsofthatmerchandiseonpricesintheUnitedStatesfor
domesticlikeproducts,and(III)theimpactofimportsofsuch
merchandiseondomesticproducersofdomesticlikeproducts,butonlyin
thecontextofproductionoperationswithintheUnitedStates;and...
mayconsidersuchothereconomicfactorsasarerelevanttothe
determinationregardingwhetherthereismaterialinjurybyreasonof
imports.
Section771(7)(C)oftheAct(19U.S.C.§1677(7)(C))furtherprovidesthatͲͲ6
Inevaluatingthevolumeofimportsofmerchandise,theCommissionshall
considerwhetherthevolumeofimportsofthemerchandise,orany
increaseinthatvolume,eitherinabsolutetermsorrelativetoproduction
orconsumptionintheUnitedStatesissignificant....Inevaluatingthe
effectofimportsofsuchmerchandiseonprices,theCommissionshall
considerwhether...(I)therehasbeensignificantpriceundersellingbythe
importedmerchandiseascomparedwiththepriceofdomesticlike
productsoftheUnitedStates,and(II)theeffectofimportsofsuch
merchandiseotherwisedepressespricestoasignificantdegreeor
preventspriceincreases,whichotherwisewouldhaveoccurred,toa
significantdegree....Inexaminingtheimpactrequiredtobeconsidered
undersubparagraph(B)(i)(III),theCommissionshallevaluate(withinthe
contextofthebusinesscycleandconditionsofcompetitionthatare
distinctivetotheaffectedindustry)allrelevanteconomicfactorswhich
haveabearingonthestateoftheindustryintheUnitedStates,including,
butnotlimitedto...(I)actualandpotentialdeclineinoutput,sales,
marketshare,grossprofits,operatingprofits,netprofits,abilitytoservice
debt,productivity,returnoninvestments,returnonassets,andutilization
ofcapacity,(II)factorsaffectingdomesticprices,(III)actualandpotential
negativeeffectsoncashflow,inventories,employment,wages,growth,
abilitytoraisecapital,andinvestment,(IV)actualandpotentialnegative
effectsontheexistingdevelopmentandproductioneffortsofthe
6AmendedbyPL114Ͳ27(assigned,June29,2015),TradePreferencesExtensionActof2015.
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IͲ3
domesticindustry,includingeffortstodevelopaderivativeormore
advancedversionofthedomesticlikeproduct,and(V)in{anantidumping
investigation},themagnitudeofthemarginofdumping.
Inaddition,Section771(7)(J)oftheAct(19U.S.C.§1677(7)(J))providesthat—7
(J)EFFECTOFPROFITABILITY.—TheCommissionmaynotdeterminethat
thereisnomaterialinjuryorthreatofmaterialinjurytoanindustryinthe
UnitedStatesmerelybecausethatindustryisprofitableorbecausethe
performanceofthatindustryhasrecentlyimproved.
Organizationofreport
PartIofthisreportpresentsinformationonthesubjectmerchandise,subsidy/dumping
margins,anddomesticlikeproduct.PartIIofthisreportpresentsinformationonconditionsof
competitionandotherrelevanteconomicfactors.PartIIIpresentsinformationonthecondition
oftheU.S.industry,includingdataoncapacity,production,shipments,inventories,and
employment.PartsIVandVpresentthevolumeofsubjectimportsandpricingofdomesticand
importedproducts,respectively.PartVIpresentsinformationonthefinancialexperienceof
U.S.producers.PartVIIpresentsthestatutoryrequirementsandinformationobtainedforuse
intheCommission’sconsiderationofthequestionofthreatofmaterialinjuryaswellas
informationregardingnonsubjectcountries.
MARKETSUMMARY
AnIMTDC(atermthatincludessheaves(alsoknownaspulleys),flywheels,and
bushings)isanironwheelorcylinderthatmaybefittedwithabeltaroundtheouter
circumference.IMTDCsareusedfortransmittingpowergeneratedbyamotor,turbine,or
enginetoanothershaft(i.e.,sheave)ortostorerotationalenergy(i.e.,flywheel).
TheleadingintegratedU.S.producersofIMTDCs 8identifiedbythepetitionerinclude
TBWandMartinSprocket&Gear(“MartinSprocket”). 9TwoleadingU.S.foundriesproducing
IMTDCcastings 10includeBrillionIronWorks(“Brillion”)andWaupacaFoundryInc.
7AmendedbyPL114Ͳ27(assigned,June29,2015),TradePreferencesExtensionActof2015.
8Forpurposesofthisreport,integratedproducersofIMTDCsarethosefirmsthatbothcast/forge
andfinish/machineIMTDCs.
9Petitions,vol.I,exh.IͲ3.PetitionerTBWanddomesticproducerMartinSprocketprovided
responsestotheCommission’squestionnaire.SmallerdomesticintegratedproducersofIMTDCsthat
alsoprovidedaresponsetotheCommission’squestionnaireincludeBremenCastings,Inc.(“Bremen”);
EnDynLtd.(“EnDyn”);andGoldens’FoundryandMachineCompany(“Goldens”).
10Forpurposesofthisreport,foundriesarefirmsthatcast/forge,butdonotfinish/machine,IMTDCs
attheirmanufacturingfacilities.
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(“Waupaca”). 11LeadingdomesticfinishersofIMTDCs12identifiedbythepetitionerincludethe
followingfourfirms:B&BManufacturing(“B&B”),BaldorElectricCompany(“Baldor”),Custom
Machine&ToolCo.,Inc.(“Custom”),andMaureyManufacturingCorporation(“Maurey”).13
OtherleadingdomesticfinishersofIMTDCsthatrespondedtotheCommission’squestionnaire
includeHiͲLoManufacturingCo.(“HiͲLo”)andSterlingIndustries,Inc.(“Sterling”).14
OfthosefirmsrespondingtotheCommission’simporterquestionnaire,thelargestU.S.
importerofIMTDCsfromCanada***is***.15ThelargestrespondingimportersofIMTDCs
fromChinaare***.LeadingimportersofIMTDCsfromnonsubjectcountriesthatrespondedto
theCommission’squestionnaireinclude***.
BaldorElectricCanada(“BaldorCanada”)wasaleadingproducerofIMTDCsinCanada
during2015.However,BaldorCanadacloseditsSt.Claire,QuebecfacilityonMay27,2016,and
relocateditsCanadianfinishingequipmenttotheBaldorfacilitiesinWeavervilleandMarion,
NorthCarolina.NootherfirmsinCanadaindicatedthattheyproducedIMTDCs.BaldorCanada
wasthesolemandatoryCanadianrespondentinCommerce’sinvestigation. 16
Theleadingproducers/exportersofIMTDCsinChinathatrespondedtothe
Commission’squestionnaireinthefinalphaseoftheseinvestigationsincludePowermach
Import&ExportCo.Ltd.(Sichuan)(“Powermach”);YueqingBethelShaftCollarManufacturing.
Co.,Ltd.(“Yueqing”);andMartinSprocket&Gear(Shanghai)Co.,Ltd.(“MartinSprocket
China”).17PowermachwastheonlycooperatingmandatoryChineserespondentinCommerce’s
investigations. 18
11Petitions,vol.I,exh.IͲ3.AlthoughBrillionprovidedaresponsetotheCommission’squestionnaire,
itwassubstantiallyincomplete.WaupacaprovidedacompleteresponsetotheCommission’s
questionnairebutitsdataisbelievedtobesubstantiallyoverstated.Otherdomesticfoundriesthat
respondedtotheCommission’squestionnairebutwereunabletoprovidethedataandother
informationrequestedbytheCommissionincludeGreatLakesCastingsLLC(“GreatLakesCastings”);
OscoIndustries,Inc.(“Osco”);andTorranceCasting,Inc.(“Torrance”).
12Forpurposesofthisreport,finishersarefirmsthatfinish/machine,butdonotcast/forge,IMTDCs
attheirmanufacturingfacilities.
13Petitions,vol.I,exh.IͲ3.Ofthesefourfinishersidentifiedbythepetitioner,onlyCustomdidnot
completeaproducerquestionnaire.TorqueTransmission(“Torque”)wasalsoidentifiedbythe
petitionerasadomesticfinisherofIMTDCs,however,thefirmrespondedtotheCommission’s
questionnaireindicatingthatitdoesnotproduceorimportironpulleysbutthatitmanufacturespulleys
fromaluminumandmoldedplastic.
14FinisherSkywayPrecision,Inc.(“Skyway”)alsorespondedtotheCommission’squestionnaire;
however,thefirmindicatedthat***.
15Inthepreliminaryphaseoftheseinvestigations,***werealsoidentifiedasleadingimportersof
IMTDCsfromCanada.However,bothCaterpillarandGMnotifiedtheCommissionthat,basedon
Commerce’spreliminarydeterminations,theirimportsarenotincludedinthescopeofthe
investigations.
16CertainIronMechanicalTransferDriveComponentsFromCanada:FinalAffirmativeDetermination
ofSalesatLessThanFairValue,81FR75039,October28,2016.
17SmallerfirmsinChinathatrespondedtotheCommission’sfinalphasequestionnaireinclude
HaiyangJingweidaGearingCo.,Ltd.(“Haiyang”);HuadeTianjinMetalManufacture(“Huade”);Shanxi
(continued...)
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IͲ5
Leadingpurchasersinclude***.
Accordingtoquestionnairesreceivedinthefinalphaseoftheseinvestigations,apparent
U.S.consumptionofIMTDCstotaledapproximately***in2015.ReportingU.S.producers’U.S.
shipmentsofIMTDCstotaled***in2015,andaccountedfor***percentofapparentU.S.
consumptionbyquantity(inpieces)and***percentbyvalue.U.S.shipmentsofimportsfrom
respondingfirmsreportingimportsfromsubjectsourcestotaled***in2015andaccountedfor
***percentofapparentU.S.consumptionbyquantity(inpieces)and***percentbyvalue.
U.S.shipmentsofimportsfromrespondingfirmsreportingimportsfromnonsubjectsources
totaled***in2015andaccountedfor***percentofapparentU.S.consumptionbyquantity
(inpieces)and***percentbyvalue.19
SUMMARYDATAANDDATASOURCES
Asummaryofdatacollectedinthefinalphaseoftheseinvestigationsispresentedin
appendixC,tableCͲ1.Exceptasnoted,U.S.industrydataarebasedonquestionnaireresponses
offiveintegratedfirmsandfivefinishersthatareestimatedtohaveaccountedfor
approximately90percentofU.S.productionoffinishedIMTDCsduring2015andapproximately
twoͲthirdsofU.S.productionofunfinishedIMTDCs(basedonvalueandweightinpounds,
ratherthanpieces).Inadditiontothefirmsnotedabove,theCommissionhaspresented
separatelythedatasubmittedbyonefoundry(Waupaca)concerningitsU.S.castingoperations.
ThesedataarenotaggregatedwiththeremainderofthedatasubmittedbytheU.S.industry
becauseWaupaca’sdataappeartobesubstantiallyoverstatedbytheinclusionofexcluded
(…continued)
HuaxiangGroupCo.,Ltd.(“Shanxi”);andShijiazhuangCAPTPowerTransmissionCo.,Ltd.
(“Shijiazhuang”).TwofirmsinChinathatrespondedtothepreliminaryphasequestionnairedidnot
respondtotheCommission’squestionnaireinthesefinalphaseinvestigations:FuzhouMinYue
Mechanical&ElectricalCo.,Ltd.(“MinYue”)andMaskaPowerTransmission(Changzhou)Co.Ltd.
(“Maska”).Maska,whichwasownedbyBaldor,permanentlycloseditsproductionfacilitiesinChinain
late2014.Conferencetranscript,p.22(McCartney).
18CertainIronMechanicalTransferDriveComponentsFromthePeople’sRepublicofChina:Final
AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016;and
CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsFromthe
People’sRepublicofChina:FinalAffirmativeDetermination,81FR75037,October28,2016.NOK(Wuxi)
VibrationControlChinaCo.Ltd.(“NOKWuxi”)wasalsoselectedbyCommerceasamandatoryChinese
respondentinitsinvestigations.However,onMarch30,2016,NOKWuxinotifiedCommerceofitsintent
towithdrawfromtheinvestigations,contingentonCommerce’sacceptanceandinclusionofthe
petitioner’sMarch30,2016amendmenttothescopethatsoughttoexcludecertainTVDs.OnApril19,
2016,NOKWuxiwithdrewfromCommerce’sinvestigationafterCommercepreliminarilydetermined
thatTVDswereproperlyexcludedfromthescope.IssuesandDecisionMemorandumfortheFinal
DeterminationintheCountervailingDutyInvestigationofCertainIronMechanicalTransferDrive
ComponentsfromthePeople’sRepublicofChina,October21,2016,p.4.
19Asdiscussedbelow,smallͲdiameterIMTDCsarenotincludedinthescopeofimportedsubject
merchandiseandareconsiderednonsubjectregardlessofthesourceofimports.
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IͲ6
merchandise,asindicatedinfootnote3inPartIIIofthisreport.Regardless,Waupaca’sdataare
presentedseparatelyinappendixC(tablesCͲ2throughCͲ5),asitisaleadingsupplierofIMTDC
castingsfor***.Waupaca’sunfinishedIMTDCsthatwerefinishedby***arereflectedinthe
U.S.industry’sdataasfinishedIMTDCs.U.S.importsarebasedonquestionnaireresponsesof
25firmsthatareestimatedtohaveaccountedforatleastoneͲhalfofU.S.importsofIMTDCs
during2015.Presentingadecisiveestimateiscomplicatedbytheinclusionofsubjectand
nonsubjectmerchandiseinthevariousrelevantHTSUSprovisions,thelargenumberof
potentialimportersidentifiedbyproprietaryCustomsdata(especiallycomparedtothe
relativelysmallnumberofimportersidentifiedinthepetitions),thediversityofsizesand
applicationsoftheproductatissue(makingitdifficulttoidentifyrelevantimportersby
businesslineoraverageunitvalueonimports),andtheshiftingdefinitionofthesubject
merchandiseitself.
PREVIOUSANDRELATEDINVESTIGATIONS
IMTDCshavenotbeenthesubjectofanypriorantidumpingorcountervailingduty
investigationsintheUnitedStates.
NATUREANDEXTENTOFSUBSIDIESANDSALESATLTFV
Subsidies
OnOctober28,2016,CommercepublishedanoticeintheFederalRegisterofitsfinal
determinationofcountervailablesubsidiesforproducersandexportersofIMTDCsfrom
China.20CommerceselectedPowermachImport&ExportCo.,Ltd.(Sichuan)(“Powermach”)
andNOK(Wuxi)VibrationControlChinaCo.Ltd.(“NOKWuxi”)asmandatoryrespondents.The
periodofCommerce’sinvestigationwasJanuary1,2014,throughDecember31,2014.
20CountervailingDutyInvestigationofCertainIronMechanicalTransferDriveComponentsfromthe
People’sRepublicofChina:FinalAffirmativeDetermination,81FR75037,October28,2016.
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Initsfinaldetermination,Commercefoundthefollowingprogramstobe
countervailableandusedbyPowermach:21
1. PolicyLoanstotheIMTDCIndustry
2. ProvisionofInputs(pigiron,ferrousscrap,electricity,andlandͲuserightsinJiangsu
andSichuanprovinces)forlessthanadequateremuneration(“LTAR”)
3. ImportTariffandVATExemptionsforForeignͲInvestedEnterprises(“FIEs”)and
CertainDomesticEnterprisesUsingImportedEquipmentinEncouragedIndustries
4. PreferentialTaxRateforCompaniesintheWesternDevelopmentArea
5. ReportedGrants
Initsfinaldeterminations,Commercefoundthefollowingprogramstobenotusedby,
ornottoconferameasurablebenefitto,Powermach:22
1. TreasuryBondLoansorGrants
2. PreferentialLoansforKeyProjectsandTechnologies
3. LoansandInterestSubsidiesProvidedPursuanttotheNortheastRevitalization
Program
4. ForeignTradeDevelopmentFundGrants
5. ExportAssistanceGrants
6. ExportInterestSubsidies
7. SubsidiesforDevelopmentof“FamousBrands”andChinaWorldTopBrands
8. SubͲCentralGovernmentSubsidiesforDevelopmentofFamousBrandsandChina
WorldTopBrands
9. FundsforOutwardExpansionofIndustriesinGuangdongProvince
10. ProvincialFundforFiscalandInnovationTechnologies
11. StateSpecialFundforPromotingKeyIndustriesandInnovationTechnologies
12. ShandongProvince’sSpecialFundfortheEstablishmentofKeyEnterprise
TechnologyCenters
13. GrantsforAntidumpingInvestigations
14. ShandongProvince’sAwardFundforIndustrializationofKeyEnergyͲSaving
Technology
15. ShandongProvince’sEnvironmentalProtectionIndustryResearchandDevelopment
Funds
16. WasteWaterTreatmentSubsidies
17. FundsofGuangdongProvincetoSupporttheAdoptionofEͲCommercebyForeign
TradeEnterprises
21IssuesandDecisionMemorandumfortheFinalDeterminationintheCountervailingDuty
InvestigationofCertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina,
October21,2016,pp.8Ͳ10.
22Ibid.,p.10.
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IͲ8
18. TechnologytoImproveTradeResearchandDevelopmentFund
19. ProvisionofWaterforLTAR
20. ProvisionofLandtoStateOwnedEnterprises(“SOEs”)forLTAR
21. IncomeTaxReductionsunderArticle28oftheEnterpriseIncomeTaxLaw(“EITL”)
22. TaxOffsetsforResearchandDevelopmentundertheEITL
23. IncomeTaxReductionsforExportͲOrientedFIEs
24. IncomeTaxBenefitsforFIEsBasedonGeographicLocations
25. LocalIncomeTaxExemptionandReductionProgramsfor“Productive”FIEs
26. TaxOffsetsforResearchandDevelopmentbyFIEs
27. TaxRefundsforReinvestmentofFIEProfitsinExportͲOrientedEnterprises
28. PreferentialTaxProgramsforFIEsRecognizedasHighorNewTechnology
Enterprises
29. PreferentialIncomeTaxPolicyforEnterprisesintheNortheastRegion
30. ForgivenessofTaxArrearsForEnterprisesLocatedintheOldIndustrialBasesof
NortheastChina
31. ValueAddedTax(“VAT”)RebateExemptionsonFIEPurchasesofChineseͲMade
Equipment
32. VATandTariffExemptionsforPurchasesofFixedAssetsUndertheForeignTrade
DevelopmentFundProgram
33. IncomeTaxCreditsforDomesticallyOwnedCompaniesPurchasingDomestically
ProducedEquipment
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 78 of 218
IͲ9
TableIͲ1presentsCommerce’sfinaldeterminationofsubsidizationoflargeͲdiameter
IMTDCsfromChina.
Table I-1
IMTDCs: Commerce’s final subsidy determination with respect to imports from China
Company
Final
countervailable
subsidy margin
(percent)
Powermach Import & Export Co., Ltd. (Sichuan), Sichuan Dawn Precision Technology
Co., Ltd., Sichuan Dawn Foundry Co. Ltd., and Powermach Machinery Co., Ltd. 33.26
NOK (Wuxi) Vibration Control China Co., Ltd., and Wuxi NOK - Freudenberg Oil Seal
Co., Ltd.; Changzhou Baoxin Metallurgy Equipment Manufacturing Co. Ltd.;
Changzhou Changjiang Gear Co., Ltd.; Changzhou Gangyou Lifting Equipment Co.,
Ltd.; Changzhou Juling Foundry Co., Ltd.; Changzhou Liangjiu Mechanical
Manufacturing Co Ltd.; Changzhou New Century Sprocket Group Company;
Changzhou Xiangjin Precision Machinery Co., Ltd.; FIT Bearings; Fuzhou Minyue
Mechanical & Electrical Co., Ltd.; Hangzhou Chinabase Machinery Co., Ltd.;
Hangzhou Ever Power Transmission Group; Hangzhou Vision Chain Transmission
Co., Ltd.; Hangzhou Xingda Machinery Co., Ltd.; Henan Xinda International Trading
Co., Ltd.; Henan Zhiyuan Machinery Sprocket Co. Ltd.; Jiangsu Songlin Automobile
Parts Co., Ltd.; Martin Sprocket & Gear (Changzhou) Co., Ltd.; Ningbo Blue Machines
Co., Ltd.; Ningbo Fulong Synchronous Belt Co., Ltd.; Ningbo Royu Machinery Co.,
Ltd.; Praxair Surface Technologies; Qingdao Dazheng Jin Hao International Trade
Co., Ltd.; Quanzhou Licheng Xintang Automobile Parts Co., Ltd. (“XTP Auto Parts”)
Shangyu Shengtai Machinery Co., Ltd.; Shenzhen Derui Sourcing Co., Ltd.;
Shengzhou Shuangdong Machinery Co., Ltd.; Shengzhou Xinglong Machinery;
Sichuan Reach Jiayuan Machinery Co. Ltd.; Tran-Auto Industries Co. Ltd.; Ubet
Machinery1 163.46
All others 33.26
1 Non-cooperative companies to which an adverse facts available rate was applied.
Source: 81 FR 75037, October 28, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 79 of 218
IͲ10
SalesatLTFV
OnOctober28,2016,CommercepublishednoticesintheFederalRegisterofitsfinal
determinationsofsalesatLTFVwithrespecttoimportsoflargeͲdiameterIMTDCsfrom
Canada23andChina. 24TablesIͲ2andIͲ3presentCommerce’sdumpingmarginswithrespectto
importsofIMTDCsfromCanadaandChina.
Table I-2
IMTDCs: Commerce’s final weighted-average LTFV margins with respect to imports from Canada
Manufacturer/exporter
Final dumping margin
(percent)
Baldor Electric Company Canada 1 191.34
All others 100.47
1 Non-cooperative company to which an adverse facts available rate was applied.
Source: 81 FR 75039, October 28, 2016.
23CertainIronMechanicalTransferDriveComponentsfromCanada:FinalAffirmativeDetermination
ofSalesatLessThanFairValue,81FR75039,October28,2016.
24CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina:Final
AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 80 of 218
IͲ11
Table I-3
IMTDCs: Commerce’s final weighted-average LTFV margins with respect to imports from China
Exporter Producer
Final dumping
margin
(percent)
Powermach Import & Export Co., Ltd.
(Sichuan) / Sichuan Dawn Precision
Technology Co., Ltd. / Sichuan Dawn
Foundry Co., Ltd. / Powermach Co.,
Ltd.
Powermach Import & Export Co., Ltd.
(Sichuan) / Sichuan Dawn Precision
Technology Co., Ltd. / Sichuan Dawn
Foundry Co., Ltd. / Powermach Co.,
Ltd. 13.64
Fuqing Jiacheng Trading Corporation
Limited
Fuzhou Min Yue Mechanical & Electrical Co.,
Ltd. 13.64
Haiyang Jingweida Gearing Co., Ltd. Haiyang Jingweida Gearing Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Shijiazhuang CAPT Power Transmission Co.,
Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Shanghai CPT Machinery Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Yueqing Bethel Shaft Collar Manufacturing
Co., Ltd 13.64
Hangzhou Powertrans Co., Ltd.
Kezheng (Fuzhou) Mechanical & Electrical
Manufacture Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Handan Hengfa Transmission Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Shijiazhuang Lihua Mechanical
Manufacturing Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Xingtai Shengjia Machinery and Equipment
Factory 13.64
Hangzhou Powertrans Co., Ltd. Shanghai Keli Machinery Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Jiangsu Zhengya Technology Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Taizhou Feiyang Metal Spinning Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Taizhou Pengxun Machinery Manufacturing
Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd.
Guangde Ronghua Machinery Manufacturing
Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Qiuxian Hengxin Machinery Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Reach Machinery Enterprise 13.64
Hangzhou Powertrans Co., Ltd. Chengdu Novo Machinery Co., Ltd. 13.64
Hangzhou Powertrans Co., Ltd. Chengdu Leno Machinery Co., Ltd. 13.64
Shijiazhuang CAPT Power
Transmission Co., Ltd.
Shijiazhuang CAPT Power Transmission Co.,
Ltd. 13.64
Xinguang Technology Co. Ltd of
Sichuan Province
Sichuan Dawn Precision Technology Co.,
Ltd. 13.64
PRC-wide entity 401.68
Source: 81 FR 75032, October 28, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 81 of 218
IͲ12
THESUBJECTMERCHANDISE
Commerce’sscope
Commercehasdefinedthescopeoftheseinvestigationsinitsfinaldeterminationsas
follows:
Theproductscoveredbythisinvestigationareironmechanicaltransfer
drivecomponents,whetherfinishedorunfinished(i.e.,blanksorcastings).
Subjectironmechanicaltransferdrivecomponentsareintheformof
wheelsorcylinderswithacenterboreholethatmayhaveoneormore
groovesorteethintheiroutercircumferencethatguideormeshwitha
flatorribbedbeltorlikedeviceandareoftenreferredtoassheaves,
pulleys,flywheels,flatpulleys,idlers,conveyerpulleys,synchronous
sheaves,andtimingpulleys.Theproductscoveredbythisinvestigation
alsoincludebushings,whichareironmechanicaltransferdrive
componentsintheformofacylinderandwhichfitintotheboreholesof
othermechanicaltransferdrivecomponentstolockthemintodriveshafts
bymeansofelementssuchasteeth,bolts,orscrews.
Ironmechanicaltransferdrivecomponentssubjecttothisinvestigation
arethosenotlessthan4.00inches(101mm)inthemaximumnominal
outerdiameter.
Unfinishedironmechanicaltransferdrivecomponents(i.e.,blanksor
castings)possesstheapproximateshapeofthefinishedironmechanical
transferdrivecomponentandhavenotyetbeenmachinedtofinal
specificationaftertheinitialcasting,forgingorlikeoperations.These
machiningprocessesmayincludecutting,punching,notching,boring,
threading,mitering,orchamfering.
Subjectmerchandiseincludesironmechanicaltransferdrivecomponents
asdefinedabovethathavebeenfinishedormachinedinathirdcountry,
includingbutnotlimitedtofinishing/machiningprocessessuchascutting,
punching,notching,boring,threading,mitering,orchamfering,orany
otherprocessingthatwouldnototherwiseremovethemerchandisefrom
thescopeoftheinvestigationifperformedinthecountryofmanufacture
oftheironmechanicaltransferdrivecomponents.
Subjectironmechanicaltransferdrivecomponentsarecoveredbythe
scopeoftheinvestigationregardlessofwidth,design,orirontype(e.g.,
gray,white,orductileiron).Subjectironmechanicaltransferdrive
componentsarecoveredbythescopeoftheinvestigationregardlessof
whethertheyhavenonͲironattachmentsorpartsandregardlessof
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 82 of 218
IͲ13
whethertheyareenteredwithothermechanicaltransferdrive
componentsoraspartofamechanicaltransferdriveassembly(which
typicallyincludesoneormoreoftheironmechanicaltransferdrive
componentsidentifiedabove,andwhichmayalsoincludeotherparts
suchasabelt,couplingand/orshaft).Whenenteredasamechanical
transferdriveassembly,onlytheironcomponentsthatmeetthephysical
descriptionofcoveredmerchandisearecoveredmerchandise,notthe
othercomponentsinthemechanicaltransferdriveassembly(e.g.,belt,
coupling,shaft).However,thescopeexcludesflywheelswitharinggear
permanentlyattachedontotheouterdiameter.Aringgearisasteelring
withconvexexternalteethcutormachinedintotheouterdiameter,and
wherethediameteroftheringexceeds200mmanddoesn’texceed
2,244.3mm.
Forpurposesofthisinvestigation,acoveredproductisof“iron”where
thearticlehasacarboncontentof1.7percentbyweightorabove,
regardlessofthepresenceandamountofadditionalalloyingelements.
Excludedfromthescopearefinishedtorsionalvibrationdampers(TVDs).
AfinishedTVDisanenginecomponentcomposedofthreeseparate
components:aninnerring,arubberringandanouterring.Theinnerring
isanironwheelorcylinderwithaboreholetofitacrankshaftwhich
formsasealtopreventleakageofoilfromtheengine.Therubberringisa
{damping}mediumbetweentheinnerandouterringsthateffectively
reducesthetorsionalvibration.Theouterring,whichmaybemadeof
materialsotherthaniron,mayormaynothavegroovesinitsouter
circumference.ToconstituteafinishedexcludedTVD,theproductmustbe
composedofeachofthethreepartsidentifiedaboveandthethreeparts
mustbepermanentlyaffixedtooneanothersuchthatboththeinnerring
andtheouterringarepermanentlyaffixedtotherubberring.Afinished
TVDisexcludedonlyifitmeetsthephysicaldescriptionprovidedabove;
merchandisethatotherwisemeetsthedescriptionofthescopeanddoes
notsatisfythephysicaldescriptionofexcludedfinishedTVDsaboveisstill
coveredbythescopeoftheinvestigationregardlessofenduseor
identificationasaTVD.
AlsoexcludedfromthescopearecertainTVDinnerrings.Toconstitutean
excludedTVDinnerring,theproductmusthaveeachofthefollowing
characteristics:(1)asinglecontinuouscurveformingaprotrusionor
indentationonoutersurface,alsoknownasasinelock,withaheightor
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 83 of 218
IͲ14
depthnotlessthan1.5millimetersandnotexceeding4.0millimetersand
withawidthofatleast10millimetersasmeasuredacrossthesinelock
fromoneedgeofthecurvetotheother;25(2)afacewidthoftheouter
diameterofgreaterthanorequalto20millimetersbutlessthanorequal
to80millimeters;(3)anoutsidediametergreaterthanorequalto101
millimetersbutlessthanorequalto300millimeters;and(4)aweightnot
exceeding7kilograms.ATVDinnerringisexcludedonlyifitmeetsthe
physicaldescriptionprovidedabove;merchandisethatotherwisemeets
thedescriptionofthescopeanddoesnotsatisfythephysicaldescription
ofexcludedTVDinnerringsisstillcoveredbythescopeofthis
investigationregardlessofenduseoridentificationasaTVDinnerring.
ThescopealsoexcludeslightͲduty,fixedͲpitch,nonͲsynchronoussheaves
(“excludableLDFPNsheaves”)witheachofthefollowingcharacteristics:
MadefromgreyirondesignatedasASTM(NorthAmericanspecification)
Grade30orlower,GB/T(Chinesespecification)GradeHT200orlower,
DIN(Germanspecification)GG20orlower,orEN(Europeanspecification)
EN–GJL200orlower;havingnomorethantwogrooves;havinga
maximumfacewidthofnomorethan1.75inches,wherethefacewidthis
thewidthofthepartatitsoutsidediameter;havingamaximumoutside
diameterofnotmorethan18.75inches;andhavingnoteethonthe
outsideordatumdiameter.ExcludableLDFPNsheavesmustalsoeither
haveamaximumstraightboresizeof1.6875incheswithamaximumhub
diameterof2.875inches;orelsehaveataperedboremeasuring1.625
inchesatthelargeend,amaximumhubdiameterof3.50inches,alength
throughtaperedboreof1.0inches,exactlytwotappedholesthatare180
degreesapart,anda2.0Ͳinchboltcircleonthefaceofthehub.Excludable
LDFPNsheavesmorethan6.75inchesinoutsidediametermustalsohave
anarmorspokeconstruction. 26
25Theedgesofthesinelockcurvearedefinedasthepointswherethesurfaceoftheinnerringisno
longerparalleltotheplaneformedbytheinnersurfaceoftheboreholethatattachestheringtothe
crankshaft.
26Anarmorspokeconstructioniswherearmsorspokes(typically3to6)connecttheoutside
diameterofthesheavewiththehubofthesheave.Thisisincontrasttoablockconstruction(inwhich
thematerialbetweenthehubandtheoutsidediameterissolidwithauniformthicknessthatisthe
samethicknessasthehubofthesheave)orawebconstruction(inwhichthematerialbetweenthehub
andtheoutsidediameterissolidbutisthinnerthanatthehubofthesheave).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 84 of 218
IͲ15
Further,excludableLDFPNsheavesmusthaveagrooveprofileas
indicatedinthetablebelow:
Size (belt profile)
Outside diameter
(inches)
Top width
range of
each groove
(inches)
Maximum
height
(inches)
Angle
MA/AK (A, 3L, 4L) ..................................................... d5.45 .................................................... 0.484–0.499 0.531 34
MA/AK (A, 3L, 4L) ..................................................... >5.45 but d18.75 .................................. 0.499–0.509 0.531 38
MB/BK (A, B, 4L, 5L) ................................................ d7.40 .................................................... 0.607–0.618 0.632 34
MB/BK (A, B, 4L, 5L) ................................................ >7.40 but d18.75 .................................. 0.620–0.631 0.635 38
Inadditiontotheabovecharacteristics,excludableLDFPNsheavesmust
alsohaveamaximumweight(poundsͲperͲpiece)asfollows:For
excludableLDFPNsheaveswithonegrooveandanoutsidediameterof
greaterthan4.0inchesbutlessthanorequalto8.0inches,themaximum
weightis4.7pounds;forexcludableLDFPNsheaveswithtwogroovesand
anoutsidediameterofgreaterthan4.0inchesbutlessthanorequalto
8.0inches,themaximumweightis8.5pounds;forexcludableLDFPN
sheaveswithonegrooveandanoutsidediameterofgreaterthan8.0
inchesbutlessthanorequalto12.0inches,themaximumweightis8.5
pounds;forexcludableLDFPNsheaveswithtwogroovesandanoutside
diameterofgreaterthan8.0inchesbutlessthanorequalto12.0inches,
themaximumweightis15.0pounds;forexcludableLDFPNsheaveswith
onegrooveandanoutsidediameterofgreaterthan12.0inchesbutless
thanorequalto15.0inches,themaximumweightis13.3pounds;for
excludableLDFPNsheaveswithtwogroovesandanoutsidediameterof
greaterthan12.0inchesbutlessthanorequalto15.0inches,the
maximumweightis17.5pounds;forexcludableLDFPNsheaveswithone
grooveandanoutsidediameterofgreaterthan15.0inchesbutlessthan
orequalto18.75inches,themaximumweightis16.5pounds;andfor
excludableLDFPNsheaveswithtwogroovesandanoutsidediameterof
greaterthan15.0inchesbutlessthanorequalto18.75inches,the
maximumweightis26.5pounds.
ThescopealsoexcludeslightͲduty,variableͲpitch,nonͲsynchronous
sheaveswitheachofthefollowingcharacteristics:Madefromgreyiron
designatedasASTM(NorthAmericanspecification)Grade30or
lower,GB/T(Chinesespecification)GradeHT200orlower,DIN(German
specification)GG20orlower,orEN(Europeanspecification)EN–GJL200
orlower;havingnomorethan2grooves;havingamaximumoverall
widthoflessthan2.25incheswithasinglegroove,orof3.25inchesor
lesswithtwogrooves;havingamaximumoutsidediameterofnotmore
than7.5inches;havingamaximumboresizeof1.625inches;having
eitheroneortwoidentical,internallyͲthreaded(i.e.,withthreadsonthe
insidediameter),adjustable(rotating)flange(s)onanexternallyͲthreaded
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 85 of 218
IͲ16
hub(i.e.,withthreadsontheoutsidediameter)thatenable(s)thewidth
(opening)ofthegroovetobechanged;andhavingnoteethonthe
outsideordatumdiameter.
ThescopealsoexcludescertainIMTDCbushings.AnIMTDCbushingis
excludedonlyifithasataperedangleofgreaterthanorequalto10
degrees,wheretheangleismeasuredbetweenoneoutsidetapered
surfaceandthedirectlyopposingoutsidetaperedsurface.27
Tarifftreatment
BaseduponthescopesetforthbyCommerce,themerchandisesubjecttothese
investigationsisimportedunderthefollowingstatisticalreportingnumbersoftheHarmonized
TariffScheduleoftheUnitedStates(“HTS”):8483.30.8090,8483.50.6000,8483.50.9040,
8483.50.9080,and8483.90.8080.ThescopealsoidentifiesHTSstatisticalreportingnumber
8483.90.3000,whichcoverspartsofbearinghousingsandplainshaftbearings,otherthanparts
offlanges,takeͲup,cartridge,andhangerunits.GoodsimportedundertheseHTSstatistical
reportingnumbersaredutiableatgeneraldutyratesfrom2.8percentto4.5percentad
valorem.CoveredmerchandisemayalsobeimportedunderthefollowingHTSstatistical
reportingnumbers:7325.10.0080,7325.99.1000,7326.19.0010,7326.19.0080,8431.31.0040,
8431.31.0060,8431.39.0010,8431.39.0050,8431.39.0070,8431.39.0080,and8483.50.4000.
Generaldutyratesonthesegoodsrangefromfreeto5.7percentadvalorem.28
27CertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicofChina:Final
AffirmativeDeterminationofSalesatLessThanFairValue,81FR75032,October28,2016.
28Decisionsonthetariffclassificationandtreatmentofimportedgoodsarewithintheauthorityof
U.S.CustomsandBorderProtection.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 86 of 218
IͲ17
THEPRODUCT
Descriptionandapplications
CharacteristicsandfunctionsofIMTDCs
IMTDCsaretypicallygrayorductileiron 29blanksorcastings(ifunfinished)orwheelsor
cylinders(iffinished)knownassheaves(alsocommonlyreferredtoaspulleys)(figureIͲ1).The
subjectIMTDCsarethosewithcarboncontents,byweight,of1.7percentorabove, 30regardless
ofthepresenceandamountofadditionalalloyingelements.IMTDCsalsoincludebushings,
whichareusedtoconnecttheshafttothesheave.UnfinishedIMTDCs(alsoreferredtoas
blanksorcastings)possesstheapproximateshapeofthefinishedIMTDCs,buthavenotyet
beenmachinedtothefinalspecifications.
29Nonsubjectmechanicaltransferdrivecomponentsareproducedfromothermaterials,including
aluminum,plastic,andsteel.Theymayalsobemadefrompowdermetals,whichare“discreteparticles
ofelementalmetalsorofmixturesofelementalmetalsorofalloys.”Thesevariousmetalshavedifferent
strengthsandmaximumpossiblerimspeedsforsheaves.Forexample,agrayironsheavemayhavea
maximumrimspeedof6,500to7,500feetperminute(fpm)(dependingontheclassofmaterial),a
ductileironsheave8,000to9,000fpm,asteelsheave9,000to11,000fpm,apowdermetal(sintered
steel)sheave7,000to9,000fpm,andaluminum11,000to15,000fpm.Conferencetranscript,p.19
(McCartney);GatesCorp.,MetalsTechnicalGuide,pp.1Ͳ5,
https://www.gates.com/~/media/files/gates/industrial/powerͲtransmission/manuals/metalsͲtechnicalͲ
guide.pdf(accessedNovember21,2015);andMetalPowderIndustriesFederationWebsite,
https://www.mpif.org/AboutMPIF/mppa.asp?linkid=31(accessedNovember28,2015).
30Ironistypicallydefinedashavingacarboncontentofmorethan2percent.AtlasFoundry
CompanyWebsite,http://www.atlasfdry.com/castͲirons.htm(accessedNovember27,2015);and
EngineersHandbookWebsite,http://www.engineershandbook.com/Materials/castiron.htm(accessed
November27,2015).Steelhasacarboncontentoflessthan2percent,withmostcommercially
availablesteellessthan1percent.AtlasFoundryCompanyWebsite,http://www.atlasfdry.com/castͲ
irons.htm(accessedNovember27,2015).Thefivetypesofironincludegrayiron,ductileiron,malleable
iron,compactedgraphiteiron(CGI)andwhiteiron.Therecanbeoverlapinthechemicalcompositionof
theseirons,andtheyaredefinedbytheirstructure.Grayiron,forexample,“containsalargeamountof
carbonintheformofgraygraphiteflakes,”whileinductileiron“thegraphiteisintheshapeofspheres
ornodules.”Gray,ductile,andwhiteironwithmorethan3percentofanalloyareoftenreferredtoas
highͲalloyiron.GatesCorp.,MetalsTechnicalGuide,pp.1Ͳ5,
https://www.gates.com/~/media/files/gates/industrial/powerͲtransmission/manuals/metalsͲtechnicalͲ
guide.pdf(accessedNovember21,2015);AtlasFoundryCompanyWebsite,
http://www.atlasfdry.com/castͲirons.htm(accessedNovember27,2015);andEngineersHandbook
Website,http://www.engineershandbook.com/Materials/castiron.htm(accessedNovember27,2015).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 87 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 88 of 218
Figure I-1
IMTDCs: Classic V-belt drive (left) and V-belt sheave cross-section (right)
Bushing
Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. B2-1—2.
Most sheaves are connected with belts to transmit power from a shaft operated by a
motor or engine to another shaft. The combined belt and sheave are referred to as a belt drive,
which is typically defined by the shape of the belt. For sheaves with grooves, the belts fit into
the center grooves, though certain types of sheaves have a flat surface without grooves.”
Sheaves vary in size depending on the application and type of sheave, and may be stock items
or may be customized for individual purchasers. Stock classic sheaves, for example, range from
less than 5 inches in outer diameter, with a weight of 1 to 2 pounds, to more than 58 inches
and 1,500 pounds or more.”
+ Petitions, pp. 6-8; conference transcript, pp. 41 (Luberda) and 88 (Juergens); hearing transcript, p.
14 (Juergens).
3? Baldor Maska Product Catalog, February 2014, pp. 78-99; TBW, “Belt Drives, Sheaves, and
Couplings,” pp. B2-4-12; and conference transcript, p. 78 (McCartney).
1-18
IͲ19
VͲbeltdrives
AcommontypeofbeltdriveistheVͲbeltdrive.33TheVͲbeltdriveusesabeltshapedlike
aVthatusuallyfitsintoshapedgroovesinthesheave(figureIͲ2).Thisconfigurationprovides
advantagesinsomeapplications,suchaslowerbearingloadsandlongerbeltlife,ascompared
toflatpulleys(discussedbelow).Thesheavemayhaveonegrooveormultiplegrooves. 34
Figure I-2
IMTDCs: Classical V-belt, classical banded V-belt, classical cog V-belt, and classical cog banded
V-belts (from left to right)
Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. B2-13.
ThemaintypesofVͲbeltdrivesareclassical,narrow,andlightduty.Classicaldrivesare
theoriginalVͲbeltdrivesusedinindustry.NarrowVͲbeltdrivesweredevelopedlaterwithnew
materials,suchthatathinnerbeltcouldcarrythesameloadasaclassicalVͲbelt. 35LightdutyVͲ
beltdrivesaredesignedforuseinapplicationsinvolvinglessthan15horsepower,anddonot
exceed18.75inchesindiameter.36
33Hearingtranscript,p.16(Juergens).
34JosephL.Foszcz,“BasicsofBeltDrives,”PlantEngineering,September1,2001,
http://www.plantengineering.com/singleͲarticle/basicsͲofͲbeltͲ
drives/981c1be10d400323db10aa592e4cc7b3.html;ArthurG.ErdmanandRaymondGiese,“BeltDrive,”
AccessScience,2014,http://www.accessscience.com/content/beltͲdrive/078100;andTBW,“Belt
Drives,Sheaves,andCouplings,”p.B2Ͳ13.
35GregCober,“UnderstandingTradeͲOffsWhenSelectingBeltedDriveSystems,”TBW,p.2,
http://www.altraliterature.com/pdfs/PͲ7636ͲTBW.pdf(accessedNovember11,2015).
36Alightdutysheaveuseslessmaterialandislighterthanasheaveofthesamediameter.Certain
lightdutysheavesareexcludedfromthescopeoftheinvestigation.Conferencetranscript,pp.47Ͳ48
(McCartney)and71Ͳ72(Luberda).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 89 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 90 of 218
Within these three types of drives, there are a range of belts of standard dimensions
designated by a numbering and lettering system (figure I-3). The first number (though not used
for classic V-belts) refers to the top width of the V-belt and the letter refers to the type of belt.
For narrow V and light duty V-belts, for example, the first number in the belt designation refers
to the top width to the nearest one-eighth of an inch. “V” denotes narrow V-belts and “L”
denotes light duty.?” There are also cogged V-belts, which are more expensive but provide
advantages such as a higher power capacity and reduced friction and, therefore, heat.*®
Figure I-3
IMTDCs: Select classic V-belts (top left), narrow V-belts (top right), and light duty v-belts (bottom)
7 } 1 |
Ep w®wee Fy
2L 3L 4L
Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. B1-11, B2-13, and B3-9.
37 This discussion only covers the first part of the coding system as additional numbers and letter may
be used to denote other attributes of the belts. TBW, “Belt Drives, Sheaves, and Couplings,” pp. B1-11
and B3-8; Gates, “Belt |.D. Chart,” May 2012,
https://www.gates.com/~/media/files/gates/industrial/power-
transmission/chart/gatescorporationbeltidchart.pdf.
38 Unlike synchronous belt drives, the cogs in the V-belts are not gripped by matching grooves on the
sheaves. Greg Cober, “Understanding Trade-Offs When Selecting Belted Drive Systems,” TBW, pp. 2-3,
http://www.altraliterature.com/pdfs/P-7636-TBW.pdf (accessed November 11, 2015); and TBW, “Belt
Drives, Sheaves, and Couplings,” pp. B2-13.
1-20
IͲ21
Flatpulleys
Flatpulleysaresheavesthatdonothavegroovesandtypicallyuseflatbelts(figureIͲ4).
FlatbeltdrivesaremoreefficientthanVͲbeltdrives,buthavedrawbackssuchashigherbearing
loadsandmorewearonthebelt,asnotedabove.Inmanyflatbeltdrives,pulleysarerounded
sothatthecenterisslightlyraised(orcrowned)toimprovethebeltalignment. 39Inretrofit
applications,itispossiblethatonlyonesheaveinthedrivewillbereplacedwithaVͲbeltsheave
(withtheotherremainingaflatpulley).Inthesedrives,theflatpulleywilluseaVͲbelt.40
Figure I-4
IMTDCs: Flat pulley
Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. B5-1.
39JosephL.Foszcz,“BasicsofBeltDrives,”PlantEngineering,September1,2001,
http://www.plantengineering.com/singleͲarticle/basicsͲofͲbeltͲ
drives/981c1be10d400323db10aa592e4cc7b3.html;andTBW,“BeltDrives,Sheaves,andCouplings,”
pp.B5Ͳ5.
40TBW,“BeltDrives,Sheaves,andCouplings,”p.BEVͲ8.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 91 of 218
IͲ22
Synchronousdrives
Synchronousdrives,includingtimingpulleys,usebeltswithteethandsheaveswith
correspondinggrooves(figureIͲ5). 41Sheavesforsynchronousbeltdrivesmayalsoreferredto
assprockets.42SynchronousdrivesaretypicallymoreexpensivethanVͲbeltdrives,butoffera
numberofadvantages,includinghighefficiency,constantspeeds,lowerbearingloads,and
loweroperationandmaintenancecosts.Theycanalsobeusedinapplications,suchasthose
requiringmoreprecisetiming,thathavenottraditionallyusedbeltdrives. 43Therehavebeena
numberofimprovementsinsynchronousdrivesovertime—includingincreasingload
capacities—andtheyarethefastestgrowingportionoftheIMTDCmarket.44
Figure I-5
IMTDCs: Synchronous belt drive
Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. C1-1.
41Hearingtranscript,pp.14,16(Juergens).
42Hearingtranscript,p.16(Juergens);conferencetranscript,p.142(Price).Sprocketsthatare
toothedwheelsthatengagewithchains,ratherthanbelts,andgearsthataretoothedwheelsthat
transferenergybyengagingwithothergearsarenotincludedinthescopeoftheinvestigations.
43Synchronousdrivesarealsosometimesreferredtoaschainbeltdrives.TBW,“BeltDrives,Sheaves,
andCouplings,”pp.C1Ͳ2Ͳ3;andGregCoper,“UnderstandingTradeͲOffsWhenSelectingBeltedDrive
Systems,”TBW,pp.3Ͳ4,http://www.altraliterature.com/pdfs/PͲ7636ͲTBW.pdf(accessedNovember11,
2015).
44Conferencetranscript,p.79(McCartney).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 92 of 218
IͲ23
OtherIMTDCsforpowertransferapplications
OthertypesofIMTDCsincludevariablespeeddrives 45andconveyorpulleys.Variable
andadjustabledrivespermitoutputspeedchangesbyadjustingthediameterofthesheave,
whichresultsinafasterorslowerspeed(figureIͲ6). 46Somedrivesrequiremanualspeed
adjustment,47whereasotherscanbeadjustedwhilethedriveisinmotion. 48Conveyorpulleys,
includingdrumpulleys,arecylindricallyshapedpulleysusedformovingaconveyorbelt. 49
Figure I-6
IMTDCs: Manually adjustable sheave (left) and cross section of a variable speed sheave (right)
Source: TBW, “Belt Drives, Sheaves, and Couplings,” pp. D1-44 (left) and D1-14 (right).
45Thesearesometimesreferredtoasvariablepitchdrives,whilethosethatdonotallowforspeed
adjustmentsarereferredtoasfixedpitchdrives.RegalPowerTransmissionSolutions,BeltDrive
Monthly,vol.29,December2010,
http://www.regalpts.com/PowerTransmissionSolutions/Other/Belt%20Drive%20Monthly's/Form 9406E
.pdf.
46Thetermvariablespeeddriveisusedheretorefertobeltdrives,butcanalsorefertovariable
frequencydrives(VFDs).VFDsvarythefrequencyandvoltagedeliveredtoanACmotortochangethe
speedofthemotor.WithVFDs,themotorisoftendirectlyconnectedto,forexample,afan,whilewitha
beltdrivesystemtheengineormotorisconnectedbythebelt.VFDs.comWebsite,
http://www.vfds.com/blog/whatͲisͲaͲvfd(accessedSeptember9,2016).
47Forexample,certainTBWsheavesareadjustedby“looseningtheclampingscrewsandturninga
singleadjustingscrew.”TBW,“BeltDrives,Sheaves,andCouplings,”pp.D1Ͳ44.
48TBW,“BeltDrives,Sheaves,andCouplings,”p.D1Ͳ44.
49MartinSprocketandGearWebsite,http://www.martinsprocket.com/products/conveyorͲpulleys
(accessedNovember10,2015);andBaldorWebsite,http://www.baldor.com/brands/baldorͲ
dodge/products/conveyorͲcomponents/pulleys/drumͲpulleys(accessedNovember10,2015).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 93 of 218
IͲ24
Flywheelsandidlerpulleys
WhilethefunctionofmostIMTDCsistotransmitpowerfromoneshafttoanother,
flywheelandidlerpulleysdonothaveapowertransmissionfunction.Flywheelsarerotating
mechanicaldevicesthatareusedtostorerotationalenergy(figureIͲ7).Therotational
momentumoftheflywheelisusedtoprovidecontinuousenergyinapplicationswhereenergy
isvariable,suchaswithareciprocating(piston)engine.50Flywheelsandsheavesmaybe
producedseparatelysothattheycanbeplacedondifferentpartsoftheshaft,ormaybe
producedasapartofthesameunit(knownasaflywheelsheave).51Flywheelsheavescanbe
largeinsize.Forexample,oneprojectduringtheperiodinvolvedflywheelsheavesupto62
inchesindiameterandupto7,000pounds. 52
Figure I-7
IMTDCs: Flywheel
Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. B5-5.
Flywheelswitharinggearpermanentlyattachedontotheouterdiameterareexcluded
fromthescope.Aringgearisasteelringwithconvexexternalteethcutormachinedintothe
outerdiameterthatengageswithanothergear.53
50Conferencetranscript,pp.57–58(McCartney)and138–139(Christenson);TBW,“BeltDrives,
Sheaves,andCouplings,”p.B1Ͳ70;andBaldor’spostconferencebrief,exh.1,pp.17–18.
51Conferencetranscript,p.139(Christenson).
52TBW,“TBWood's&NuttallGearTeamuptoprovideCustomSheavesandShaftAssembliesfor
OneWorldTradeCenterExpressElevators,”January14,2014,
http://www.tbwoods.com/newsroom/2014/01/OneͲWorldͲTradeͲCenterͲElevators.
53EngineeringDictionaryWebsite,http://www.engineeringͲdictionary.org/Flywheel ring gear
(accessedOctober31,2016).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 94 of 218
IͲ25
Idlerpulleysareplacedinsideoroutsideofthedrive,andareusedtoincreasetension,
provideproperalignment,reducetheextenttowhichthebeltcanwhip,andredirectthebelts
(figureIͲ8).Theyarenotusedtodrivethepulleysystem.Idlerpulleysareusedinarangeof
applications,includingwithconveyorbelts.54
Figure I-8
IMTDCs: Schematic of a conveyor belt with idler pulleys (right)
Source: Diagram developed based on information in PCI, Conveyor Pulley Selection Guide, November
2014, p. 4, http://www.pcimfg.com/wp-content/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf.
54PCI,ConveyorPulleySelectionGuide,November2014,p.4,http://www.pcimfg.com/wpͲ
content/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf;andTBW,“BeltDrives,Sheaves,and
Couplings,”p.BEVͲ7.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 95 of 218
IͲ26
Bushings
Bushingsareusedtoconnecttheshafttothesheave.55Standardbushingsizesand
configurationsaresetbytheMechanicalPowerTransmissionAssociation(“MPTA”).Thereare
threemainbushingtypes,basedonthenumberofscrewholesinthebushing(figureIͲ9).
Standarddiametersrangefrom2.0inchesto17.8inches.Standardbushinglengthsare0.7to
15.7inches.Somebushingsaretapered,withthediameterononeendwiderthanthediameter
ontheotherend.MPTAstandardtaperedbushingshaveanominaltaperedangleof8degrees
andlargeenddiametersrangingfrom1.4to17.2inches.Inadditiontothesebushingtypes,
therearearangeofotherbushingsonthemarket,suchasthoseinmetricdimensionsand
flangelessbushings. 56
Figure I-9
IMTDCs: Three standard types of bushings
Source: TBW, “Belt Drives, Sheaves, and Couplings,” p. A1-3.
55Hearingtranscript,p.16(Juergens).
56MPTA,“QuickDetachableBushing&MatingHubStandard,”MPTAͲB6iͲ2010,2010,
http://www.mpta.org/MPTAPubs.htm;MPTA,“TaperͲLockBushing&MatingHubStandard,”MPTAͲB9iͲ
2013,2013,pp.4–6;andTBW,“BeltDrives,Sheaves,andCouplings,”pp.A1Ͳ3–A2Ͳ5.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 96 of 218
IͲ27
UsesforIMTDCs
TestimonybythepetitioneratthestaffconferenceindicatedthatunfinishedIMTDCs
areprimarilyusedintheproductionoffinishedIMTDCs. 57Theymaybefinishedatalocation
adjacenttothefoundry(asdiscussedbelow),finishedatadifferentlocationbythesame
company,orsoldtoacompanythatfinishestheproducts. 58
MostfinishedIMTDCsareusedtotransmitpowerfromamotororenginetoproducts
suchasfans,conveyors,compressors,pumps,andmixers(figureIͲ10). 59VͲbeltdrives,
synchronousdrives,andflatpulleysareallusedtoperformthisfunctionwherethespeedof
thedrivedoesnotneedtobeadjusted.Wherespeedadjustmentsareneeded,variableand
adjustablespeeddrivesareused.Conveyorpulleysareusedtodriveaconveyorbelt.In
addition,flywheelandidlerpulleyscanbeusedinabeltdrivesystem,thoughtheirprimary
functiondiffersfromthatofotherIMTDCs.Flywheelsareusedtostorerotationalenergy,as
notedabove,whileidlerpulleysareusedtoincreasetension,provideproperalignment,reduce
theextenttowhichthebeltcanwhip,andredirectthebelts.60
Figure I-10
IMTDCs: Synchronous belt drive connecting a motor to a vacuum pump
Source: TBW, “TB Wood's Custom QT Power Chain II Synchronous Drive for Paper Mill Vacuum Pump,”
December 18, 2014, http://www.tbwoods.com/newsroom/2014/12/Custom-QT-Power-Chain-II-for-Paper-
Mill-Vacuum-Pump.
57Conferencetranscript,p.85(McCartney).
58Conferencetranscript,pp.10,30(Luberda)andp.101(Crist).
59Conferencetranscript,p.92(Coder);hearingtranscript,pp.13Ͳ14(Juergens).
60Certainflywheelsareexcludedfromthescopeasnotedabove.Conferencetranscript,pp.57Ͳ58
(McCartney)and138–139(Christenson);TBW,“BeltDrives,Sheaves,andCouplings,”p.B1Ͳ70;Baldor’s
postconferencebrief,exh.1,pp.17Ͳ18;PCI,ConveyorPulleySelectionGuide,November2014,p.4,
http://www.pcimfg.com/wpͲcontent/uploads/2014/11/PCI Pulley Selection Guide 2014.pdf;and
TBW,“BeltDrives,Sheaves,andCouplings,”p.BEVͲ7.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 97 of 218
IͲ28
MarketsforIMTDCs
Asnotedabove,unfinishedIMTDCsareprimarilyusedintheproductionoffinished
IMTDCs.ThemarketforunfinishedIMTDCs,therefore,isprimarilycomprisedofcompaniesthat
finishIMTDCs. 61
FinishedIMTDCsaretypicallysoldtoeitherOEMsthatproducemachinery,orto
distributors. 63DistributorstypicallysellIMTDCstosmallOEMsandintothereplacementparts
market.IMTDCusersneedtoreplacebeltsmorefrequently,butoccasionallyalsoneedto
replacesheavesthathavewornout.64
FinishedIMTDCsareusedinarangeofapplications,suchasmining,oilfield,material
handling,agricultural,dieselengine,forestryandlogging,construction,manufacturing,other
industrial,andheating,ventilating,andairconditioning(HVAC)applications. 65Inmaterial
handlingapplications,forexample,conveyorpulleysareusedinapplicationssuchasmining,
productpackaging,foodprocessing,powergeneration,andrecycling(figuresIͲ11andIͲ12). 66
61Conferencetranscript,pp.10,30(Luberda)andp.101(Crist).SeePartIIIregardingreportedsales
ofunfinishedIMTDCsdirectlytooriginalequipmentmanufacturers(“OEMs”).
63Hearingtranscript,p.80(Christenson).
64TBWstatedthatreplacementpartsaccountforcloseto40percentofitsbusiness.Hearing
transcript,pp.90Ͳ91(Christenson).
65BothsmallͲdiameterandlargeͲdiameterIMTDCsareusedinusedinarangeofapplications,some
ofwhichoverlap.Petitions,p.6;MartinSprocketandGearWebsite,
http://www.martinsprocket.com/products/conveyorͲpulleys(accessedNovember10,2015);conference
transcript,p.79(McCartney);hearingtranscript,p.55(Christenson);BaldorMaska,“HVACProduct
Catalog”December2013;BaldorWebsite,http://www.baldor.com/brands/baldorͲ
maska/products/mechanicalͲdriveͲcomponents/sheaves/stepͲpulleys(accessedNovember28,2015);
andTBW,“PremiumBeltDriveSystemforToughApplications,”August2014,p.2.
66MartinSprocketandGearWebsite,http://www.martinsprocket.com/products/conveyorͲpulleys
(accessedNovember10,2015);andBaldorWebsite,http://www.baldor.com/brands/baldorͲ
dodge/products/conveyorͲcomponents/pulleys/drumͲpulleys(accessedNovember10,2015).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 98 of 218
IͲ29
Figure I-11
IMTDCs: Material handling applications
Source: TBW, “Premium V-Belt Drives,” November 2015, p. TOC-1.
Figure I-12
IMTDCs: Bottling applications
Source: TBW, “Synchronous Drives,” November 2015, p. cover; TBW, “V-Belt Drives,” April 2015, p.
cover.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 99 of 218
IͲ30
Theoilindustryisasignificantuseroflargesheavesinupstreamapplicationssuchas
drilling. 67Intheagriculturalsector,sheavesandbeltdrivesareusedinequipmentrangingfrom
combinesandharvesterstoconveyorbelts. 68InHVACapplicationsIMTDCsareoftenusedto
transmitpowerfromamotortoafan(figureIͲ13). 69
Figure I-13
IMTDCs: Synchronous drive in an HVAC application
Source: TBW, “TB Wood's QT Power Chain II Belt Drive System For HVAC Exhaust Fan,” April 8, 2013,
http://www.tbwoods.com/newsroom/2013/04/QT-Power-Chain-II-for-HVAC-Exhaust-Fan.
67Conferencetranscript,p.79–80(McCartneyandMoore)andp.93(Coder);andpetitioner’s
postconferencebrief,exh.1,p.55.
68AltraIndustrialMotion,“PowerTransmissionSolutionsfortheFarmandAgricultureMarket,”p.7,
http://www.altraliterature.com/pdfs/PͲ7362ͲC.pdf(accessedNovember11,2015);hearingtranscript,p.
55(Christenson).
69Thoughbeltdriveshavetraditionallybeenusedinlargefans,directdrivefansetͲups—inwhichthe
motorconnectsdirectlytothefanandvariablefrequencydrives(VFDs)areusedtocontrolthespeedof
themotor—areincreasinglyusedinthisapplication.TraneEngineersNewsletter,“DirectDrivePlenum
FansandFanArrays,”vol.31,no.1(2010),
https://www.trane.com/content/dam/Trane/Commercial/global/productsͲsystems/educationͲ
training/engineersͲnewsletters/acoustics/admapn036en 0310.pdf;Conferencetranscript,p.79
(McCartney);andBaldorMaskaProductCatalog,February2014,p.58.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 100 of 218
IͲ31
Flywheelsarecommonlyusedinapplicationswhereenergyisvariable,suchaswitha
reciprocating(piston)engine.70Theoilindustryisoneexampleofwhereflywheelsareused.
Theflywheelisusedwithapumpjack,forexample,andiscounterbalancedontheotherendof
theshaftfromthesheave.71Anotherapplicationisinflywheelsheavesusedinelevators.72
Manufacturingprocesses
TransformationprocessforIMTDCs
ThesubjectIMTDCsaremanufacturedinfivesteps:(1)design,(2)ironmelting,(3)mold
making,(4)casting,and(5)finishing(alsoknownasmachining). 73Melting,moldmaking,and
castingnormallytakeplaceatafoundry,andtheseproductionstepscombinedarecollectively
referredtoas“casting.”Designandfinishingmaybeperformedatthefoundry,butthesesteps
mayalsotakeplaceataseparateplant.Themanufacturingprocessesandtechnologiesusedby
foreignproducersarelargelysimilartothoseofdomesticproducers.74
Design
Sheavesandbushingsaredesignedbyengineersusingcomputersimulationsofmetal
flowandsolidification. 75Whilecustomersusuallychoosefromanextensivecatalogofsheaves
andcorrespondingbushings,someapplicationsrequirecustomizedsheavesthatmeetspecific
size,strength,speedorotherrequirements.76Customersmayprovidethedesignsthemselves,
ordesignengineersatthefoundrymayprovidedesignconsultationandservices.77
70Asnotedabove,certainflywheelsareexcludedfromthescopeoftheinvestigations.
71Conferencetranscript,pp.57Ͳ58(McCartney).
72TBW,“TBWood's&NuttallGearTeamuptoprovideCustomSheavesandShaftAssembliesfor
OneWorldTradeCenterExpressElevators,”January14,2014,
http://www.tbwoods.com/newsroom/2014/01/OneͲWorldͲTradeͲCenterͲElevators.
73Hearingtranscript,p.13Ͳ17(Juergens);andU.S.InternationalTradeCommission,“Foundry
Products:CompetitiveConditionsintheU.S.Market,”InvestigationNo.332Ͳ460,May2005,pp.2Ͳ7to
2Ͳ8.
74Conferencetranscript,p.150(Crist).
75USITC,“FoundryProducts,”p.2Ͳ7.
76***.
77USITC,“FoundryProducts,”p.2Ͳ7.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 101 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 102 of 218
Iron melting
The melting takes place at the foundry using a variety of raw materials, such as pig iron,
recycled materials (gates, risers, and scrap castings), and scrap steel (figure I-14).
Figure I-14
IMTDCs: Molten iron raw materials -- pig iron (left), rail steel (middle), and scrap castings (right)
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 5.
”? Hearing transcript, p. 14 (Juergens); and USITC, “Foundry Products,” p. 2-7.
I-32
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 103 of 218
Each furnace is specific to the iron type, such as gray iron or ductile iron (figure I-15). A
combination of raw materials (“the recipe”) is weighed and processed through a preheater to
evaporate moisture and then placed gradually in the furnace to melt at a high temperature.”
White iron is not commonly used because it is brittle and not easily machined.” The chemistry
of the melting material inside the furnace (called the “charge”) is measured *** to ensure a
desired composition of iron, carbon, silicon, and other content specific to the iron type. on
Once the desired chemistry and temperature is reached, the molten iron is ready to be poured.
Figure 1-15
IMTDCs: Iron melting furnace at TBW’s facility in Chambersburg
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 6.
Mold making
The mold making process begins with making patterns mounted on flasks. Patterns
determine the contours and shapes of the sand mold through which molten metal will flow to
fill the cavity of the finished mold (figure I-16).®° Patterns are made of metal and wood plates.
Patterns may be made at the foundry or made at a separate facility.
” TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 6; Hearing transcript, p. 14; and ***.
8° Machine design, “Cast iron,” http://machinedesign.com/basics-design/cast-iron (accessed
December 3, 2015).
®*) TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 6; and ***.
82 ex
83 Hearing transcript, p. 15 (Juergens); and USITC, “Foundry Products,” 2-7.
** USITC, “Foundry Products,” p. 2-7.
1-33
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 104 of 218
Figure I-16
IMTDCs: Upside-down flask with molding patterns (left) and two molding halves in flasks (right)
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 7.
Sand is filled into the patterned flask, pressed, and hardened by a heat or chemical
treatment. Different types of sands are used for specific iron types. Sand that is hardened
primarily through chemical treatment (referred to as “chemical sand” or “no bake sand”) is
used to make ductile iron castings; sand that is hardened by pressure treatment (referred to as
“green sand”) is used to make gray iron castings.”
### 87 yfter the sand hardens sufficiently, the molds are removed from the flasks. Two
halves of the molds are usually hardened separately (figure I-16), and then placed together to
make a complete mold.”
Casting: pouring, cooling, and cleaning
Castings, otherwise referred to as “blanks,” are made by pouring molten iron into the
sand mold using pouring ladles (figure I-17). The molten iron within the sand mold is left to cool
and harden. After cooling and hardening, the sand mold is broken away, and the sand is
recycled. Limited processing is performed on the molds to remove excess materials, such as
sand, gate connections, and risers (figure I-18).°” Resulting scrap materials are returned to the
melting furnace to be recycled.
®° TBW’s Foundry Capabilities, http://www.tbwoods.com/Products Mechanical Castings.asp
(accessed December 3, 2015).
°° The American Foundry Society, “Guide to Casting and Molding Processes”, p. 1-3; and ***,
87 ex
®8 Conference transcript, p. 89 (Juergens); TBW, “Description of the Manufacturing Process,” p. 4.
*° USITC, “Foundry Products,” p. 2-8; Hearing transcript, p. 15 (Juergens).
1-34
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 105 of 218
Figure I-17
IMTDCs: Casting process: pouring ladle deposits molten iron to sand molding (left), and cooled to
harden (right)
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 10.
Figure I-18
IMTDCs: Excess material is ground away to complete the casting process
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 11.
I-35
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 106 of 218
Finishing
Castings undergo a finishing process to achieve their final specified size and
characteristics (figures I-19 and I-20). Grooves or teeth are cut into the casting’s outer
circumference using a variety of machines.”” Other machining processes include drilling holes in
sheaves and bushings, balancing large sheaves, broaching, and painting.”* The various
machining processes can be completely automated, or can utilize a combination of machines
and labor. The finishing process may take place at a facility adjacent to the foundry, or may take
place at a separate plant.”
Figure I-19
IMTDCs: Unfinished castings: V-belt sheave (left), synchronous sheave (middle), bushing (right)
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 12.
°° Examples of automated machines can be found at JK Pulley Company’s website
http://www. jkpulley.com/high-production-robotic-machining-services.html (accessed December 3,
2015), and TBW also lists machining capabilities on its website.
http://www.tbwoods.com/Products Mechanical Castings.asp (accessed December 3, 2015); Hearing
transcript, p. 16; and ***.
°! TBW website, http://www.tbwoods.com/Products Mechanical Castings.asp (accessed December
3, 2015). ***.
*? USITC, “Foundry Products,” 2-8; and ***.
1-36
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 107 of 218
Figure I-20
IMTDCs: Finished products: V-belt sheave (left), synchronous
sheave (middle), bushing (right)
Source: TBW, “V-Belt, Synchronous, and Variable Speed Drives,” p. 13.
Value added of castings and finishing
Value is added by both casting and finishing stages of the manufacturing process. The
division between value added by casting and machining varies by the product size, complexity
of the casting and machining, and the end-use of the products. The value added by machining is
a point of dispute in this case, with the respondents arguing that machining adds as much as
one-half of the value of the finished products, while the petitioner argues that the casting
process adds significantly more value than machining.”° Further information compiled from
questionnaire responses in these investigations concerning value added is presented in tables
IIIl-7 and IIl-8 in Part III of this report.
8 Petitioners argue that value added by machining can be inflated if the unfinished imported castings
have been dumped at low prices. See Conference transcript, pp. 18, 19, 116, 117, and 156. The 2012
Economic Census found that the value added in gray and ductile iron foundry castings accounts for
approximately 51 percent of the total value of castings shipments and receipts for services. Census,
2012 Manufacturing Survey, NAICS 331511. A 2005 Commission survey of gray and ductile iron
foundries found that machining costs accounted for about 25 percent of the total costs of finished
products. USITC, “Foundry Products,” pp. 5-16 and 5-17.
1-37
IͲ38
DOMESTICLIKEPRODUCTISSUES
Summaryoffindingsfrompreliminaryphase
Inthepreliminaryphaseoftheinvestigations,thepartiesdiscussedthreedomesticlike
productissues:(1)whethertoincludeunfinishedandfinishedIMTDCsinthesamedomestic
likeproduct;(2)whethertoincludeIMTDCsunder4inchesinmaximumnominaloutside
diameter(herein“smallͲdiameter”IMTDCs)inthesamedomesticlikeproductdefinitionasthe
“largeͲdiameter”IMTDCsthatcorrespondtothescopeoftheseinvestigations(thosewhose
maximumnominaloutsidediameterisatleast4inches);and(3)whethertoincludemechanical
transferdrivecomponents(“MTDCs”)thataremanufacturedfromsinteredsteelpowderor
directͲmachinedsteelbars(collectively“steelMTDCs”)inthesamedomesticlikeproduct
definitionastheironMTDCscorrespondingtothescopeoftheseinvestigations.Forthe
reasonsdiscussedbelow,theCommissiondefinedthedomesticlikeproductinthepreliminary
determinationsasallformsofunfinishedandfinishedIMTDCsdescribedinthescopeofthese
investigations,aswellassmallͲdiameterIMTDCsunder4inchesinmaximumnominaloutside
diameter.TheCommissiondidnotincludesteelMTDCsthataremanufacturedfromsintered
steelpowderordirectͲmachinedsteelbarsinthedomesticlikeproductdefinition. 94
UnfinishedandfinishedIMTDCs
Thescopeoftheimportedmerchandisesubjecttotheseinvestigationsincludes
unfinishedandfinishedIMTDCs.Basedonananalysisofthesemifinishedproductfactors,the
CommissiondefinedunfinishedandfinishedIMTDCsaspartofthesamedomesticlikeproduct
initspreliminaryphasedeterminations.Specifically,theCommissionfoundthatunfinishedand
finishedIMTDCshavesimilarphysicalcharacteristicsandthatunfinishedIMTDCsserveno
functionotherthanbeingmachinedintofinishedIMTDCs.Thatis,unfinishedIMTDCsare
dedicatedtotheproductionoffinishedIMTDCs,andfinishingoperationsareanecessarystep
foranunfinishedIMTDCtobeusable.TheCommissionnotedinitspreliminarydeterminations
thattheextentofanyseparatemarketsforunfinishedandfinishedIMTDCswasdisputedby
thepartiesandwasunclearfromtherecord.Therecordatthetimeofthepreliminaryphase
investigationssuggestedthepossibleexistenceofseveralfirmsthatonlycastunfinished
IMTDCsandatleastonefirmthatonlyfinishedIMTDCs,buttherecordalsoindicatedthatat
leasttwoU.S.firmsmanufacturedbothunfinishedandfinishedIMTDCs.TheCommission
furthernotedthatalthoughthevalueaddedbyfinishingoperationswasdisputedbytheparties
inthepreliminaryphaseoftheinvestigations,thevalueoffinishingoperationswasnot
insignificant. 95
94CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550
and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,pp.10and19.
95CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550
and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.13.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 108 of 218
IͲ39
SmallͲdiameterIMTDCs
Basedonananalysisofthetraditionaldomesticlikeproductfactors,theCommission
concludedinitspreliminarydeterminationsthatsmallͲdiameterIMTDCsarepartofthesame
domesticlikeproductdefinitionasthelargeͲdiameterIMTDCscorrespondingtothe
investigations’scope.Inmakingitspreliminarydeterminations,theCommissionnotedthatthe
preliminaryphaserecorddidnotsupportTBW’sassertionthataclearlinedividessmallͲ
diameterIMTDCsfromthelargeͲdiameterIMTDCsthatcorrespondtothescopeofthese
investigations.Therecordinthepreliminaryphaseinvestigationsalsoshowedthatcertainfirms
producesmallͲandlargeͲdiameterIMTDCsusingsomecommonfacilities,processes,and
employees.TheCommissionnotedinitspreliminarydeterminationsthatsmallͲandlargeͲ
diameterIMTDCshavesimilarphysicalcharacteristics,someoverlapintheirenduses,andare
soldthroughsimilarchannelsofdistribution.Inaddition,theCommissionnotedthattherecord
inthepreliminaryphaseoftheinvestigationssuggestedthatproducersandcustomersdonot
differentiateamongIMTDCsbasedonafourͲinchdiameterdividingline,asshownbyavailable
productcataloguesandindustrystandards.Furthermore,althoughtheCommissionrecognized
thatitisnotunexpectedthatpricesdifferforsmallͲandlargeͲdiameterIMTDCsorthatsmallͲ
andlargeͲdiameterIMTDCsarenotinterchangeable,itnotedthatthesamecanbesaidof
IMTDCsofdifferentsizesregardlessofthediameterusedasthedividingline.96
SteelMTDCs
Initspreliminarydeterminations,theCommissiondeterminednottoincludeMTDCs
manufacturedfromsinteredsteelpowderordirectͲmachinedsteelbarsinthedomesticlike
productdefinitionwithironMTDCs,notwithstandingsomesimilaritiesbetweenthetwotypes
ofproducts.Inmakingitsdeterminations,theCommissionnotedthatalthoughcustomersand
industryassociationsmaynotdifferentiatebetweenMTDCsmadefromironandsteelandall
suchproductsappearedtosharechannelsofdistribution,someevidencesuggestedthatthey
havedifferentphysicalqualitiesduetotheirdifferentchemicalproperties.TheCommission
furtherdeterminedthatnotonlyareironMTDCspriceddifferentlythansteelMTDCs,butthat
thosefirmsthatmanufactureMTDCsfromironandoneormoreofthesteelrawmaterials(i.e.,
96TheCommissionnotedthattherecordinthepreliminaryphaseoftheinvestigationsthatincluded
thesmallͲdiameterIMTDCoperationsof***andthefinishingoperationsconductedby***suggested
thatproductionvolumesofsmallͲdiameterIMTDCsintheUnitedStateswererelativelysmallandthat
smallͲdiameterMTDCswereoftenmanufacturedfromsinteredsteelpowderordirectͲmachinedsteel
barsinsteadofiron,butitobservedthattherecordatthattimewasunclearastowhethertherewere
additionalfirmsthatmightalsocastand/orfinishsmallͲdiameterIMTDCsusingthesameorsimilar
productionequipment,processes,andequipment.CertainIronMechanicalTransferDriveComponents
fromCanadaandChina,Inv.Nos.701ͲTAͲ550and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication
4587,December2015,pp.15Ͳ16;andConfidentialPreliminaryViews,EDISDoc.571242,pp.22Ͳ23.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 109 of 218
IͲ40
sinteredsteelpowderordirectͲmachinedsteelbar)dosousingdifferentrawmaterials,
productionfacilities,processes,andemployees.97
Partyarguments
Preliminaryphase
Theargumentsofpartiesaresummarizedbrieflybelow.Whereaspartiesdisagreed
aboutthetreatmentofsmallͲdiameterIMTDCsandnonͲironMTDCsinthepreliminaryphaseof
theinvestigations,nopartyarguedthatunfinishedandfinishedIMTDCsareseparatedomestic
likeproducts. 98
Inthepreliminaryphaseoftheinvestigations,thepetitionerproposedthatIMTDCs
constitutedasingledomesticlikeproduct,coextensivewiththescopeoftheseinvestigationsas
initiatedbyCommerce.Specifically,thepetitionernotedthattheCommissionshouldnot
includeinthedomesticlikeproductIMTDCsthatarelessthanfourinchesindiameteror
MTDCsthatarenotmadeofiron(suchassinteredsteelpowderMTDCsandMTDCsmadefrom
directmachinedsteelbars).99
97CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550
and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.19.
98Baldor’spostconferencebrief,exh.1;ChineseRespondents’postconferencebrief,pp.11Ͳ13;
Petitioner’spostconferencebrief,p.5;Petitions,vol.I,pp.20Ͳ21;andconferencetranscript,pp.32,58Ͳ
59,and110.
99Petitioner’spostconferencebrief,p.5.ThepetitioneramendeditsoriginalOctober28,2015
petitionsonNovember5,2015toproposerevisionstothescopelanguage.Aspartofthoserevisions,
thepetitionerproposedexcludingitemsoflessthan4.00inches(101mm)inmaximumnominalouter
diameterfromthescope.Thepetitionerarguedthattheadditionofadiameterlimittodefinethe
IMTDCscoveredbythescopeimprovesthescope’sclarityandabilitytodistinguishbetweenironand
steelproductssinceitarguesthatsomesmallͲdiameter(i.e.,below4.0inches)importedcomponents
maybeproducedfromeithersteeloriron(ortheirproductionprocessesmaybechangedrelatively
easilytoutilizesteel),whilelargeͲdiametercomponentsarepredominantlyproducedfromiron.
ResponsetotheDepartment’sNovember3,2015SupplementalQuestionsRegardingVolumeIofthe
PetitionfortheImpositionofAntidumpingandCountervailingDuties,November5,2015,pp.4Ͳ5.The
petitioneragainamendeditspetitionsduringtheCommission’spreliminaryphaseinvestigationson
November17,2015toproposefurthermodificationstothescopelanguagebyadjustingthecarbon
contentthresholdfrom1.5to1.7percentbyweightoraboveforitemsincludedinthescope.Additional
RevisiontotheScope,November17,2015,p.1.Aspreviouslynoted,furtheramendmentsand
clarificationstothescopelanguagewereproposedbythepetitionersubsequenttoCommerce’s
preliminarydeterminationsonJune27,2016,August4,2016,andAugust17,2016,andAugust22,
2016,concerningtheexclusionofcertaintorsionalvibrationdamperinnerringsandcertainflywheels
withringgear.
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IͲ41
RespondentBaldorandChineserespondentsPowermachandMinYuearguedinthe
preliminaryphaseoftheinvestigationsthatallIMTDCsshouldbeconsideredtobewithinthe
samedomesticlikeproductregardlessofdiameter,andthatMTDCsmadefromsinteredsteel
ormachinedsteelbarshouldalsobeincludedinthesamedomesticlikeproductasMTDCs
madefromiron. 100Additionally,basedonitsproposedexpandeddomesticlikeproduct,Baldor
arguedthatthedomesticindustryshouldincludethosefirmsthatproduceitemsusinga
sinteringand/ordirectmachiningprocess,regardlessofthecarboncontent,andthosethat
produceitemsbelow4inchesindiameter.101
Inthepreliminaryphaseoftheinvestigations,respondentCaterpillararguedthatthe
petitioner’ssuggestionthattheCommission’sdomesticlikeproductmustnecessarilybe
coterminouswithCommerce’sscopewasincorrect,butotherwisemadenospecificarguments
astodomesticlikeproductanddomesticindustry.Itsimplynotedthatthedefinitionsremain
“wideopenquestions”andarguedthatthepetitioner’schangeinthescopelanguageverylate
duringthepreliminaryphaseoftheCommission’sinvestigationshinderedtheCommission’s
abilitytogathertheappropriateindustryinformation. 102
Finalphase
Initspreliminaryphasedeterminations,theCommissionremindedpartiestoidentifyin
theircommentsonthedraftquestionnairesforthefinalphaseoftheseinvestigationsany
argumentsthatwouldimplicatedatacollection,suchasrequeststodefinethedomesticlike
productinadifferentmanner.103Onlyoneparty,TBW,providedcommentsonthedraft
questionnairesinthefinalphaseoftheseinvestigations,noneofwhichinvolvedachangeinthe
mannerinwhichtheproposeddatawerecollectedinthesefinalphaseinvestigationsthat
wouldsuggestadifferentdomesticlikeproductdefinition. 104
100Baldor’spostconferencebrief,p.5;andChineserespondents’postconferencebrief,p.7.
101Baldor’spostconferencebrief,p.27.
102Caterpillar’spostconferencebrief,pp.4Ͳ7.
103CertainIronMechanicalTransferDriveComponentsfromCanadaandChina,Inv.Nos.701ͲTAͲ550
and731ͲTAͲ1304Ͳ1305(Preliminary),USITCPublication4587,December2015,p.19.
104TBW’sCommentsonDraftQuestionnaires,June24,2016.
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Initsprehearingbriefinthefinalphaseoftheinvestigations,TBWarguedthatthe
CommissionshouldfindthatIMTDCsconstituteasingledomesticlikeproduct,coextensivewith
thescopeoftheseinvestigations.Specifically,unfinishedandfinishedIMTDCsshouldbe
treatedaspartofasingledomesticlikeproductandmechanicaltransferdrivecomponentsnot
madeofironshouldbeexcludedfromthedomesticlikeproductdefinition.Further,TBW
arguesthattheCommissionshouldalsonotincludeIMTDCsthatarelessthanfourinchesin
diameterinthedomesticlikeproduct.105
TheChinaChamberofInternationalCommerce’sadhocCoalitionofProducersand
ExportersofCertainIronMechanicalTransferDriveComponentsfromthePeople’sRepublicof
China,106PowermachImport&ExportCo.,Ltd.,(Sichuan);ShijiazhuangCAPTPower
TransmissionCo.,Ltd.;andYueqingBethelShaftCollarManufacturing.Co.,Ltd.providedbriefs
inthefinalphaseoftheseinvestigationsbutdidnotmakeanyargumentsconcerningthe
definitionofthedomesticlikeproduct.
105TBW’sprehearingbrief,pp.2Ͳ3.
106ThemembersoftheCoalitionarePowermachImport&ExportCo.,Ltd.(Sichuan),Shijiazhuang
CAPTPowerTransmissionCo.,Ltd.andYueqingBethelShaftCollarManufacturingCo.,Ltd.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 112 of 218
IIͲ1
PARTII: CONDITIONSOFCOMPETITIONINTHEU.S.MARKET
U.S.MARKETCHARACTERISTICS
IMTDCsareusedintheHVAC,mining,upstreamoilandgas,buildingandroad
construction,andgeneralindustrialandagriculturalsectors.1Theycanvarysubstantiallyinsize
andareincorporatedintoawiderangeofmachineryandequipment,suchasfans,conveyors,
pumps,compressors,andmixers.SmallͲdiameterIMTDCsgenerallyareusedwithsmall
machineryandlargeͲdiameterIMTDCsareusedinlargeͲscalemachinerysuchasthatusedin
miningandoilandgasrigs. 2IMTDCsareproducedintwoprimaryphases:castingandfinishing.
IMTDCsmaybecastbyonefirm,andfinishedbyanother.3
Overall,apparentU.S.consumptionofIMTDCsin2015was***percentlowerthanin
2013onavaluebasisand***percenthigheronaunit(piece)basis.
U.S.PURCHASERS
TheCommissionreceived24usablequestionnaireresponsesfromfirmsthathave
purchasedIMTDCssinceJanuary2013. 4Sixteenrespondingpurchasersaredistributorsand
eightareendusers.MostoftherespondingU.S.purchasersarelocatedintheMidwestand
CentralSouthwest.Therespondingendusersrepresentfirmsproducingavarietyofproducts
includingHVAC,refrigeration,conveyorequipment,vibratingscreens,andagricultural
equipment.TherespondingdistributorsselltoawidevarietyofOEMsandotherindustrial
customersincludingmaterialhandlingequipmentmanufacturers,HVAC,agricultural,general
manufacturing,mining,petrochemicals,foodprocessing,automotive,andoilandgas.The
largestrespondingpurchaserswere***.
1Conferencetranscript,pp.92Ͳ93(Coder).
2Hearingtranscript,p.17(Juergens).
3AsnotedinPartI,thisreportpresentsseparatelycertaindatasubmittedbyonefoundry(Waupaca)
regardingitsU.S.castingoperationsbecauseofconcernsovertheinclusionofsubstantialamountsof
excludedmerchandise.AlthoughWaupaca’sdataarepresentedseparatelyinappendixC,***.
4Eighteenofthe24respondingpurchasersreporteddatafortheirpurchasesoflargeͲdiameter
IMTDCs,including14fordomesticallyͲproducedproduct,9forsubjectimportsfromCanada,9for
subjectimportsfromChina,8forproductfromMexico,2forproductfromothercountries,and9for
productofunknownorigin.SixteenpurchasersreporteddatafortheirpurchasesofsmallͲdiameter
IMTDCs,including9fordomesticproduct,7forimportedproduct,and8forunknownoriginproduct.A
numberofpurchaserswerenotabletoprovideanydatafortheirpurchasesofIMTDCs,orwerenotable
toreportbysizeorbycountryoforigin.
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IIͲ2
CHANNELSOFDISTRIBUTION
U.S.producersandimporterssoldfinishedIMTDCstobothdistributorsandendusers
(tableIIͲ1).TBWstatedthatitsindustrialdistributionchannelservessmallerOEMsandthe
replacementpartsbusinessandthatitsellsIMTDCsdirectlytolargerOEMs. 5
Table II-1
IMTDCs: U.S. producers’ and importers’ U.S. commercial shipments, by sources and channels of
distribution, 2013-15, January-June 2015, and January-June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Share of commercial U.S. shipment value (percent)
U.S. producers (finished only).--
Distributors *** *** *** *** ***
End users *** *** *** *** ***
U.S. importers: subject Canada.--
Distributors *** *** *** *** ***
End users *** *** *** *** ***
U.S. importers: subject China.--
Distributor 61.9 60.5 60.7 61.6 69.8
End users 38.1 39.5 39.3 38.4 30.2
U.S. importers: Nonsubject
sources 1
.--
Distributors 76.8 76.5 78.2 77.0 74.3
End users 23.2 23.5 21.8 23.0 25.7
1 Nonsubject sources includes imports of large-diameter IMTDCs from countries other than Canada and
China and imports of small-diameter IMTDCs from all sources.
Note.--U.S. producers' data excludes unfinished IMTDCs. Channels of distribution data were not gathered
for imports by level of finishing, however the vast majority of imports were of finished IMTDCs.
Source: Compiled from data submitted in response to Commission questionnaires.
5Hearingtranscript,p.90(Christenson).
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IIͲ3
GEOGRAPHICDISTRIBUTION
U.S.producersandsubjectimportersreportedsellingIMTDCstoallregionsinthe
UnitedStates(tableIIͲ2).ForU.S.producers,13percentofsaleswerewithin100milesoftheir
productionfacility,68percentwerebetween101and1,000miles,and20percentwereover
1,000miles.Subjectimporterssold5percentwithin100milesoftheirU.S.pointofshipment,
62percentbetween101and1,000miles,and32percentover1,000miles.
Table II-2
IMTDCs: Geographic market areas in the United States served by U.S. producers and importers
Region U.S. producers
Subject U.S. importers
Canada China
Northeast 9 5 16
Midwest 11 6 18
Southeast 10 6 17
Central Southwest 9 6 18
Mountains 8 6 15
Pacific Coast 8 6 15
Other 1 3 3 8
All regions (except Other) 7 5 14
Reporting firms 11 6 19
1 All other U.S. markets, including AK, HI, PR, and VI.
Source: Compiled from data submitted in response to Commission questionnaires.
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IIͲ4
SUPPLYANDDEMANDCONSIDERATIONS
U.S.supply
Domesticproduction
Basedonavailableinformation,U.S.producersofIMTDCshavetheabilitytorespondto
changesindemandwithlargechangesinthequantityofshipmentsofU.S.ͲproducedIMTDCsto
theU.S.market.Themaincontributingfactorstothisdegreeofresponsivenessofsupplyare
theavailabilityofunusedcapacity,availabilityofinventories,andtheabilitytoproduce
alternateproducts.
Industrycapacity
DomesticcapacityutilizationforIMTDCsonacombinedbasisdecreasedirregularlyfrom
***percentin2013to***percentin2015.Capacityofthedomesticindustryincreasedslightly
from***piecesin2013to***piecesin2015.Therelativelylowlevelofcapacityutilization
suggeststhatU.S.producersmayhaveasubstantialabilitytoincreaseproductionofIMTDCsin
responsetoanincreaseinprices.
Alternativemarkets
U.S.producers’exportscomprisedasmallshareofthevalueoftotalshipmentsof
finishedIMTDCs(***percent)in2013Ͳ15,butalargershareofunfinishedIMTDCs(***
percent).U.S.producersindicatedthattheirprincipalexportmarketswereCanadaandMexico.
Inventorylevels
U.S.producers’inventoriesoffinishedIMTDCsincreasedandwereequivalentto***
percentoftotalshipmentsin2013and***percentin2015.Whilethereissubstantialvariation
amongdifferentsizesandsomeIMTDCsmaybecustomproducts,thevastmajorityofIMTDCs
arestandardcatalogproducts. 6Therelativelyhighinventorylevelsandlargeproportionof
standarditemssuggestthatU.S.producersmayhaveasubstantialabilitytorespondtochanges
indemandwithchangesinthequantityshippedfrominventories.
Productionalternatives
Sevenof11respondingU.S.producersstatedthattheycouldswitchproductionfrom
IMTDCstootherproducts.Otherproductsthatproducersreportedlycanproduceonthesame
6Conferencetranscript,p.69(Beck);andNotesfromStafffieldworkatTBW’smanufacturingfacility,
November12,2015.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 116 of 218
IIͲ5
equipmentasIMTDCsarecouplingsandcastingsfornonͲIMTDCproducts,adapters,covers,
spacers,rotors,calipers,housings,andothermachineshopproducts.U.S.producersreported
thatproductionofotherproductsbesidesIMTDCsaccountedforabout***ofproduction(in
pieces)usingthesamefinishingequipmentandabout***ofproduction(inpieces)usingthe
samecastingequipmentin2015.AccordingtothePetitioner,aftertheinitialinvestmentina
foundryandthenecessaryequipment,itisveryeasyforfirmstoswitchproductionfromother
productstoIMTDCs. 7
SubjectimportsfromCanada
ThesolerespondingproducerinCanada,BaldorCanada,shutdownitsIMTDCfinishing
operationsonMay26,2016andrelocateditsIMTDCfinishingequipmenttoNorthCarolina.
BaldorCanadadidnothavecastingoperations.***.
SubjectimportsfromChina8
Basedonavailableinformation,ChineseproducersoflargeͲdiameterIMTDCshavethe
abilitytorespondtochangesindemandwithlargechangesinthequantityofshipmentsof
largeͲdiameterIMTDCstotheU.S.market.Themaincontributingfactorstothisdegreeof
responsivenessofsupplyaretheavailabilityofunusedcapacity,abilitytoshipamongalternate
markets,availableinventories,andtheabilitytoproducealternateproducts.
Industrycapacity
Chineseproducers’capacityutilizationforlargeͲdiameterIMTDCs(basedonpieces)
increasedfrom***percentin2013to***percentin2014andthendeclinedsomewhatto***
percentin2015.ThismoderatelevelofcapacityutilizationsuggeststhatChineseproducers
mayhaveanabilitytoincreaseproductionofIMTDCsinresponsetoanincreaseinprices.
Alternativemarkets
Chineseproducers’reportedshipmentstothirdͲcountrymarketsincreasedmarkedly
overtheperiod,risingfrom***percentoftotalshipmentsin2013to***percentin2015,as
shipmentstotheUnitedStatesandtheChinesehomemarketdeclined.Theshareofshipments
totheChinesehomemarketdeclinedfrom***percentin2013and***percentin2014to***
percentin2015.ExportshipmentstotheUnitedStateswereabout***percentoftotal
7Conferencetranscript,p.145(Crist).
8FordataonthenumberofrespondingforeignfirmsandtheirshareofU.S.importsfromChina,
pleaserefertoPartI,“SummaryDataandDataSources.”DatainthissectionareforlargeͲdiameter
IMTDCs.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 117 of 218
IIͲ6
shipmentsin2013and2014,decliningto***percentin2015.Othermarketsidentifiedby
ChineseproducerswereEurope,Canada,Australia,Asia,Africa,andtheMiddleEast.
Inventorylevels
Chineseproducers’inventoriesrelativetototalshipmentsdecreasedirregularlyfrom
***percentin2013to***percentin2015.Therelativelyhighinventorylevelssuggestthat
Chineseproducersmaybeabletorespondtochangesindemandwithchangesinthequantity
shippedfrominventories.
Productionalternatives
ChineseproducersmanufactureoutͲofͲscopeIMTDCsaswellasotherproductsonthe
samemachineryusedforcastingandfinishingsubjectIMTDCs.In2015,outͲofͲscopeIMTDCs
andotherproductsaccountedformorethan***ofproduction(inpieces)onmachineryused
forcastingIMTDCsand***ofproduction(inpieces)onmachineryusedforfinishingIMTDCs.
FiveChineseproducersreportedthattheyarenotabletoshiftproductionbetween
IMTDCsandotherproductsusingthesameequipment,whiletwoChineseproducersreported
thattheyareabletoshiftproduction.Chineseproducersalsoreportedbeingabletoproduce
compressorparts,pumpparts,bearings,androllers.
Nonsubjectimports
ThelargestsourceofnonsubjectimportsofIMTDCsduringJanuary2013ͲJune2016was
Mexico,whichaccountedfor***percentofreportednonsubjectimportsoflargeͲandsmallͲ
diameterIMTDCs(inpieces)in2015, 9and***percentofnonsubjectimportsoflargeͲdiameter
IMTDCs(inpieces).
Supplyconstraints
Nearlyallpurchasers(23of24)reportednosupplyconstraintsforIMTDCsfromany
source.However,purchaser***statedthatsince2012,itsCanadiansupplierhas“shorted”
shipmentsbecauseoflackofavailabilityofcastings,andbecausethesupplierclosedin2015.
Newsuppliers
Most(22of24)purchasersindicatedthatnonewsuppliershaveenteredtheU.S.
marketsinceJanuary1,2013.TwopurchasersindicatedthatMasterDrive(animporter)and
Powermach(aChineseproducer)havedoneso.
9NonsubjectimportsincludeimportsofsmallͲdiameterIMTDCsfromCanadaandChina.
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IIͲ7
U.S.demand
Basedonavailableinformation,theoveralldemandforIMTDCsislikelytoexperience
smallchangesinresponsetochangesinprice.Themaincontributingfactorsarethelackof
substituteproductsandthesmallcostshareofIMTDCsinmostofitsendͲuseproducts.
Enduses
U.S.demandforIMTDCsdependsonthedemandforU.S.Ͳproduceddownstream
products.Reportedendusesincludepumpjacks,crushersandmixers,conveyorsystems,OEM
equipment,fansandblowers,HVACapplications(e.g.,exhaustventilationfans),heat
exchangers,oilandgasapplications,andagriculturalapplications(e.g.,combines).
Attheconference,TBWstatedthatIMTDCsareusedinawidevarietyofdownstream
applications,includingfans,conveyors,pumps,compressors,rockcrushers,andmixers.10TBW
statedthattheoverallU.S.belteddrivesmarketwasdividedamongthefollowingsectors:
generalindustrial(***percent),airhandling(***percent),pumpandcompressor(***
percent),oilandgas(***percent),materialshandling(***percent),constructionand
agriculture(***percent),andsandandgravel(***percent).11
Costshare
IMTDCsaccountforasmallshareofthecostofthedownstreamendͲuseproductsin
whichtheyareused,butcanbealargershareofreplacementcomponents.Purchasers’
reportedcostsharesforsomeenduseswereasfollows:camshafts,combines,vibrating
screens,conveyors,tractors,linesorters(1percent);compressors(5percent);andpumps(10
percent).
Businesscycles
Mostfirms(10of11U.S.producers,20of23importers,and18of24purchasers)
indicatedthattheIMTDCmarketwasnotsubjecttobusinesscycles.Afewfirmsreportedthat
certainsectorsthatuseIMTDCs,includingagricultureandoilandgas,arecyclicalorseasonal.
PetitionerstatedthatIMTDCdemandisderivedfromavarietyofendͲusesectorsand
generallytracksoveralleconomicconditionsmorecloselythananyparticularmarketsegment
(seefigureIIͲ1).Itaddedthatdemandisdrivenbygeneralindustrialandconstructiondemand,
includingbuildingandroadconstruction,demandinthefoodandbeveragesectors,and
demandintheoilandgassectors.12
10Conferencetranscript,pp.92Ͳ93(Coder),120(Christenson).
11Petitioner’spostconferencebrief,exh.1,p.55.
12Petitioner’spostconferencebrief,pp.9Ͳ10.Petitioner’sprehearingbrief,p.13.
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IIͲ8
Figure II-1
GDP: Percent change from preceding period in real GDP in the United States, seasonally adjusted
at annual rates, in percent, January 2013-September 2016
Source: BEA, Table 1.1.1. Percent Change From Preceding Period in Real Gross Domestic Product.
http://www.bea.gov/iTable/index_nipa.cfm, October 28, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 120 of 218
IIͲ9
Demandtrends
Respondingfirmsreportedavarietyofresponseswithrespecttochangesindemandin
theUnitedStatesforIMTDCssinceJanuary1,2013,thoughfewindicatedanincreasein
demand(tableIIͲ3).PetitionerandChineserespondentsstatedthatU.S.demandforIMTDCs
hasdecreasedsince2013. 13
Table II-3
IMTDCs: Firms’ responses regarding U.S. demand and demand outside the United States
Item
Number of firms reporting
Increase No change Decrease Fluctuate
Demand inside the United States:
U.S. producers 1 1 5 4
Importers 0 4 6 8
Purchasers 1 8 6 7
Demand outside the United States:
U.S. producers 2 1 2 2
Importers 2 4 3 5
Purchasers 1 5 3 2
Demand for purchasers' final products:
Purchasers 2 3 4 2
Source: Compiled from data submitted in response to Commission questionnaires.
Threepurchasersreportedreduceddemandintheenergysector,specificallyIMTDCs
forOEMmachinesandsparepartsusedinthecoal,oil,andgasindustries.***reported
reduceddemandbecauseofadownturnincertainsectorsoftheeconomy,aswellasmachines
thatuseIMTDCsbeingproducedinothercountries.Ontheotherhand,purchaser***reported
increaseddemandforHVACapplications(becauseofnewhomeconstructionandinolder
homesforrepairsandreplacements),andpurchaser***reportedgrowingdemandforIMTDCs
inmaterialhandlingconveyors.
Substituteproducts
SubstitutesforIMTDCsarelimited.MostU.S.producers(4of6),importers(17of21),
andpurchasers(20of23)reportedthattherewerenosubstitutesforIMTDCs.Twoofthethree
purchasersthatreportedsubstitutesstatedthatthesubstitutesweremoreexpensiveIMTDCs
butmoreefficient.SubstituteslistedbypurchaserswerevariablefrequencydrivesfortheHVAC
industry,directdrivesforoilfieldpumpingequipment,integralgearmotorsforspeedreduction
applications,andrightanglegeardrivesforheattransferproducts.Nofirmreportedthat
changesinthepricesofsubstituteshadaffectedpricesofIMTDCs.
13Petitioner’sprehearingbrief,pp.11Ͳ13.Respondent’sprehearingbrief,pp.19Ͳ21.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 121 of 218
IIͲ10
SUBSTITUTABILITYISSUES
ThedegreeofsubstitutionbetweendomesticandimportedIMTDCsdependsuponsuch
factorsasrelativeprices,quality(e.g.,appearance,durability,meetingtolerances,packaging,
andperformance),andconditionsofsale(e.g.,pricediscounts/rebates,leadtimesbetween
orderanddeliverydates,paymentterms,productservices,etc.).Basedonavailabledata,staff
believesthatthereisahighdegreeofsubstitutabilitybetweendomesticallyproducedIMTDCs
andIMTDCsimportedfromsubjectsources.
Leadtimes
IMTDCsaresoldbothproducedͲtoͲorderandfrominventory.MostrespondingU.S.
producersreportedthatthemajorityoftheirsaleswereproducedͲtoͲorder,althoughtwo
producersreportedthatlessthanhalfoftheirsaleswereproducedͲtoͲorder(***).U.S.
producers’reportedproducedͲtoͲorderleadtimesaveraged52days.MostU.S.producers’
reportedleadtimesfrominventorywere1to5days.Mostimportersreportedthatthe
majorityoftheirsaleswerefromU.S.inventories,withmostreportingleadtimesfromU.S
inventoriesof1to7days.
Knowledgeofcountrysources
TwentyͲoneof24purchasersindicatedthattheyhadmarketing/pricingknowledgeof
domesticproduct,8ofCanadianproduct,9ofChineseproduct,9ofMexicanproduct,and3of
productfromothercountries(GermanyandIndia).
AsshownintableIIͲ4,mostpurchasersandtheircustomerssometimesornevermake
purchasingdecisionsbasedontheproducerorcountryoforigin.Ofthethreepurchasersthat
reportedthattheyalwaysmakedecisionsbasedonthemanufacturer,***statedthatitonly
purchasesfromfirmsonitsapprovedsupplierlist, 14***statedthatitselectssuppliersbased
onqualityandvalue,and***didnotgiveareason.***answered“usually,”explainingthatit
stocksU.S.ͲproducedIMTDCsforcustomersthatstateapreferencefordomesticproduct,anda
morecostͲeffectivesolutionforothercustomers.
Table II-4
IMTDCs: Purchasing decisions based on producer and country of origin
Purchaser/customer decision Always Usually Sometimes Never
Purchaser makes decision based on producer 3 6 6 10
Purchaser’s customers make decision based on producer 0 3 10 8
Purchaser makes decision based on country 0 3 9 11
Purchaser’s customers make decision based on country 0 2 13 8
Source: Compiled from data submitted in response to Commission questionnaires.
14***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 122 of 218
IIͲ11
Factorsaffectingpurchasingdecisions
Themostoftencitedtopthreefactorsfirmsconsiderintheirpurchasingdecisionsfor
IMTDCswereprice(19firms),quality(19firms),andavailability(16firms)asshownintableIIͲ
5.QualitywasthemostfrequentlycitedfirstͲmostimportantfactor(citedby7firms),followed
byprice(5firms);pricewasthemostfrequentlyreportedsecondͲmostimportantfactor(7
firms);andprice,wasthemostfrequentlyreportedthirdͲmostimportantfactor(7firms).
Table II-5
IMTDCs: Ranking of factors used in purchasing decisions as reported by U.S. purchasers, by
factor
Factor First Second Third Total
Price 5 7 7 19
Quality 7 6 6 19
Availability 4 6 6 16
Delivery/lead time 1 2 1 4
Product range 1 0 2 3
Traditional supplier 1 0 0 1
Other 1 5 2 1 8
1 Other factors include customer preference, distribution agreement, brand, and relationship with supplier.
Source: Compiled from data submitted in response to Commission questionnaires.
Purchasersreportedthatthecharacteristicstheyconsiderindeterminingquality
included:appearance,castingquality,durability,dimensionalconsistency,labeling,meeting
tolerances,packaging,andperformanceinapplications.Severaldistributorsnotedthatthey
maynotdirectlyassessqualitybutinsteadrelyonbrandreputation,supplierhistory,and
feedbackfromtheircustomers.***statedthatitassessesqualitybasedonindustrystandards,
andthatovertime,Chineseproducthasmetthosestandards“soitcomesdowntoprice.”
Themajorityofpurchasers(14of24)reportedthatthey“sometimes”purchasethe
lowestͲpricedproduct,while8indicated“usually,”2“always,”and1“never.”
WhenaskediftheypurchasedlargeͲdiameterIMTDCsfromonesourcealthougha
comparableproductwasavailableatalowerpricefromanothersource,13purchasers
reportedreasonsincludingavailability,consistencyofsupply,customerpreference,delivery,
andrelationshipwithvendor.Severalpurchasersreportedsometimespurchasingdomestic
producteventhoughitwaspricedhigherbecauseofareputationforbetterquality,requests
fordomesticproduct,reliabilityofdelivery,andpreferencesforuseincriticalapplications.Only
1of22respondingpurchasersindicatedthatcertaintypesofIMTDCswereonlyavailablefrom
asinglesource.15
15***statedthatlesspopularstylesandsizesareonlyavailabledomestically.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 123 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 124 of 218
Seventeen of 23 purchasers indicated that they or their customers do not have a
country preference for large-diameter IMTDCs. Of those who indicated a country preference,
several indicated that occasionally a customer will request domestic product or will specify no
products from a “low-cost country.”
Importance of specified purchase factors
Purchasers were asked to rate the importance of 15 factors in their purchasing decisions
(table Il-6). The factors rated as “very important” by more than half of responding purchasers
were quality meets industry standards (all 24 purchasers); availability, product consistency, and
reliability of supply (23 each); delivery time and price (19 each); and product range (13).
Table II-6
IMTDCs: Importance of purchase factors, as reported by U.S. purchasers, by factor
Number of firms reporting
Somewhat
Factor Very important important Not important
Availability 23 1 0
Delivery terms 7 15 2
Delivery time 19 5 0
Discounts offered 10 12 1
Extension of credit 8 8 7
Minimum quantity requirements 8 13 3
Packaging 3 15 5
Price 19 4 0
Product consistency 25 1 0
Product range 13 8 3
Quality meets industry standards 24 0 0
Quality exceeds industry
standards 8 14 1
Reliability of supply AES) 1 0
Technical support/service 9 15 0
U.S. transportation costs 9 12 2
Source: Compiled from data submitted in response to Commission questionnaires.
I-12
IIͲ13
Suppliercertification
Mostpurchasers(19of24)donotrequiretheirsupplierstobecomecertifiedor
qualifiedtosellIMTDCstotheirfirm.Thepurchasersthatdidreportaqualificationprocess
reportedthatthetimetoqualifyanewsupplierrangedfrom30daystooneyear.Nopurchaser
reportedthatasupplierhadfailedinitsattempttoqualifyproduct,orhadlostitsapproved
statussince2013.
Changesinpurchasingpatterns
Purchaserswereaskedaboutchangesintheirpurchasingpatternsfromdifferent
sourcessince2013(tableIIͲ7);reasonsreportedforchangesinsourcingincludedprice,quality,
declineindemand,availability,brandsupport,focusonkeybrands,theclosureofBaldor
Canada,andcustomerdemand.Sixof24respondingpurchasersreportedthattheyhad
changedsupplierssinceJanuary1,2013.
Table II-7
IMTDCs: Changes in purchase patterns from U.S., subject, and nonsubject countries
Source of purchases
Did not
purchase Decreased Increased Constant Fluctuated
United States 0 8 4 7 4
Canada 7 4 2 4 2
China 5 2 6 3 2
Mexico 7 1 2 5 3
All other sources 8 2 1 4 1
Sources unknown 6 1 1 4 3
Source: Compiled from data submitted in response to Commission questionnaires.
***reportedthatasalargedistributorwithmanycustomers,itsmixofsuppliers
changes,butthatmostofitspurchasesaresourcedtolongͲtermsuppliers.***reportedthat
withover25suppliersinthisproductcategory,itsbusinessmovesbackandforthbasedoncost
andcustomerpreference.***reporteddropping***forcustommanufacturedflywheelsin
favorof***basedonbetterpricingandshorterdeliverytimes.16***notedtheclosureofits
Canadiansupplier.***reporteddropping***and***assuppliers.
16***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 125 of 218
IIͲ14
Importanceofpurchasingdomesticproduct
Nineof21respondingpurchasersreportednodomesticrequirementsforanyoftheir
purchases.Fivepurchasersreportedthatdomesticproductwasrequiredbylaw(for1to7
percentoftheirpurchases).Elevenpurchasersreportedthatdomesticproductwasrequiredby
theircustomers(for6ofthesepurchasers,1to14percentoftheirpurchases,for4purchasers,
50Ͳ55percent,andforonepurchaser,90percent).17Threepurchasersreportedother
preferencesfordomesticproduct(for1to25percentofpurchases).Threepurchasers(***)did
notanswerthequestion.
Comparisonsofdomesticproducts,subjectimports,andnonsubjectimports
PurchaserswereaskedanumberofquestionscomparingIMTDCsproducedinthe
UnitedStates,subjectcountries,andnonsubjectcountries.Purchaserswereaskedfora
countryͲbyͲcountrycomparisonoflargeͲdiameterIMTDCsonthesame15factors(tableIIͲ8)for
whichtheywereaskedtoratetheimportance.MostpurchasersreportedthatU.S.and
Canadianproductwerecomparableonallfactorsexceptprice(forwhich6ratedtheCanadian
productaslowerpricedand5ratedthemascomparable)andreliabilityofsupply(forwhich5
of11firmsratedtheU.S.productassuperior).IncomparingU.S.andChineseproducts,a
majorityorpluralityofpurchasersratedtheproductscomparableon7factors,theU.S.product
assuperioron6factors(availability,deliverytime,productrange,qualityexceedsindustry
standards,reliabilityofsupply,andtechnicalsupport/service),theChineseproductassuperior
onprice(i.e.,lowerpriced).Onproductconsistency,anequalnumberoffirmsratedtheU.S.
productassuperiorasratedtheproductsascomparable.IncomparingproductfromCanada
andChina,amajorityofpurchasersratedthemascomparableon9factors,Canadaassuperior
on5factors(deliveryterms,deliverytime,productconsistency,reliabilityofsupply,and
technicalsupport/service),andChinaassuperioronprice.
17Thepurchasersreporting50Ͳ55percentweredistributors***,whichservecustomersinawide
varietyofindustriesincludingoilandgas,agricultural,HVAC,generalmanufacturing,andmining,and
enduser***.Distributor***reported90percent.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 126 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 127 of 218
Table II-8
Large-diameter IMTDCs: Purchasers’ comparisons between U.S.-produced and imported product
Number of firms reporting
United States vs. Canada
United States vs. China
Canada vs. China
Factor s c I Ss c I s c I
Availability 2 9 0 7 5 0 3 5 1
Delivery terms 0 10 0 3 7 1 4 3 0
Delivery time 0 ii 0 7 3 2 5 3 0
Discounts offered 0 8 2 0 6 4 0 6 1
Extension of credit 0 10 0 2 8 0 1 7 0
Minimum quantity requirements 0 11 0 5 7 0 2 5 1
Packaging 0 1 0 4 7 0 3 5 0
Price’ t) 5 6 1 1 10 1 3 4
Product consistency 2 g) 0 5 5 2 5 3 0
Product range 5 6 0 6 5 1 3 4 1
Quality meets industry standards 2 2 0 4 8 0 2 6 0
Quality exceeds industry standards Zz 9 0 Hi 4 1 3 5 0
Reliability of supply 5 a 1 6 5 1 5 2 1
Technical support/service 5 6 0 2) 2 1 5 3 0
U.S. transportation costs’ 5 6 is} 5 7 0 3 a 0
N
Factor
umber of firms reporting
United States vs. Nonsubject
Canada
vs. Nonsubject
China vs. Nonsubject
s
c
Ss
c
s
c
Availability
Delivery terms
Delivery time
Discounts offered
Extension of credit
Minimum quantity requirements
Packaging
Price’
Product consistency
Product range
Quality meets industry standards
Quality exceeds industry standards
Reliability of supply
Technical support/service
MMMM] hy ]=]—] PP] pp |p] =] ho] |b
O/OSO/OS/OsO[W/O/OJO|N OJO!]/oO
ee fess ee pees es pee Im 5 RR) es | es
O/OJO/O/OsO/Os/O/Os/O/O;oj/oO/;/o
O/OJ/O/;/O/Os;O/]=/oO/oO;/oO/—]= oOFJO/]/o
U.S. transportation costs’
NIN IMM IM) M1@)/O]M] NM] hm] =] M/ PM | Ph
2
0
1
0
0
=|=/O/O0/O0/O/O/O/O;O;/oO;/oO;/O;oO;oO;o
o;—/;-/.2/42/4 /43/42 /42)/43/4/42 3/4 /|,-
O/A/s/OTos/ols/osoysol;/o;oyso/;o;oay;o|;a
" A rating of superior means that price/U.S. transportation cost is generally lower. For example, if a firm
reported “U.S. superior,” it meant that the U.S. product was generally priced lower than the imported
product.
Note.--S=first listed country’s product is superior; C=both countries’ products are comparable; I=first list
country’s product is inferior.
Source: Compiled from data submitted in response to Commission questionnaires.
I-15
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 128 of 218
Comparison of U.S.-produced and imported large-diameter IMTDCs
In order to determine whether U.S.-produced large-diameter IMTDCs can generally be
used in the same applications as imports from Canada and China, U.S. producers, importers,
and purchasers were asked whether the products can “always,” “frequently,
“never” be used interchangeably. As shown in table II-9, all responding producers, nearly all
responding importers, and most responding purchasers indicated that large-diameter IMTDCs
from all listed sources were always or frequently interchangeable.
Table II-9
od
sometimes,” or
Large-diameter IMTDCs: Interchangeability between IMTDCs produced in the United States and in
other countries, by country pairs
U.S. producers U.S. importers U.S. purchasers
Country pair A F $ N A F $ N A F $s N
United States vs. Canada 4 2 0 0 8 5 1 0 Tf 7 2 0
United States vs. China 4 z 0 0 8 8 1 0 4] 10 3 0
Canada vs. China 4 1 0 0 6 3} 1 0 3 6 3 0
United States vs. Mexico 5) 1 0 0 6 4 0 0 6 8 1 0
United States vs. Other 2 1 0 0 3 5 0 0 1 3 2 0
Canada vs. Mexico 4 1 0 0 6 4 0 0 4 Th 1 0
Canada vs. Other 2 1 0 0 3 5 0 1 1 PB. 2 0
China vs. Mexico 3) 1 0 0 4 5) 0 0 5 Tf 1 0
China vs. Other 2 1 0 0 3 5 0 0 2 3 0 0
Mexico vs. Other 1 0 0 4 4 0 0 z Z 1 0
Note.—A=Always, F=Frequently, S=Sometimes, N=Never.
Source: Compiled from data submitted in response to Commission questionnaires.
Only four purchasers provided additional explanations regarding interchangeability,
reporting that quality differences, material tolerances, finish, cost, bore size, and sheave
diameter may limit interchangeability in some cases.
Most (15 of 19) responding purchasers reported that domestically produced large-
diameter IMTDCs “always” met minimum quality specifications (table II-10). Eight of 14
responding purchasers reported that Canadian large-diameter IMTDCs “always” met minimum
quality specifications, and 5 reported that they “usually” did. Four of 14 responding purchasers
reported that Chinese large-diameter IMTDCs “always” met minimum quality specifications,
and 7 reported that they “usually” did.
11-16
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 129 of 218
Table Il-10
Large-diameter IMTDCs: Ability to meet minimum quality specifications, by source’
Source Always Usually Sometimes Rarely or never
United States 15 4 0 0
Canada 8 5 1 0
China 4 Hi 2 1
Mexico 2 6 2 0
All other sources 0 1 1 0
" Purchasers were asked how often domestically produced or imported IMTDCs meet minimum quality
specifications for their own or their customers’ uses.
Source: Compiled from data submitted in response to Commission questionnaires.
In addition, U.S. producers, importers, and purchasers were asked to assess how often
differences other than price were significant in sales of large-diameter IMTDCs from the United
States, subject, or nonsubject countries. As seen in table Il-11, a majority of firms indicated that
differences other than price between large-diameter IMTDCs from specified sources were
sometimes or never significant factors in their sales or purchases of the products.
Table II-11
Large-diameter IMTDCs: Significance of differences other than price between IMTDCs produced in
the United States and in other countries, by country pairs
U.S. producers U.S. importers U.S. purchasers
Country pair A F $ N A F $ N A F § N
United States vs. Canada 0 0 3 4 2. 2 4 3 3 0 10 5]
United States vs. China 0 0 5 2 3 3 8 3 3 4 6 2
Canada vs. China 0 0 a 2 2 2 5) 2 1 2 4 1
United States vs. Mexico 0 0 4 3 1 1 4 2 3 2 6 3
United States vs. Other 0 0 4] 2 1 2 2 2 0 2 0 2
Canada vs. Mexico 0 0 3 2 1 2 3 2 1 2 4 2
Canada vs. Other 0 0 2 2 1 | 2 2 Al 0 1 0 1
China vs. Mexico 0 0 2 2 1 2 2 2 1 2 4 3
China vs. Other 0 0 2 2 1 1 3 2 0 0 0 2
Mexico vs. Other 0 0 2 2 1 1 2} 2 0 0 0 2
Note.--A = Always, F = Frequently, S = Sometimes, N = Never.
Source: Compiled from data submitted in response to Commission questionnaires.
Il-17
IIͲ18
Sixpurchasersprovidedadditionalexplanationsregardingdifferencesotherthanprice.18
***statedthattheUnitedStatesandCanadaareperceivedassimilarwhileMexico,China,and
Indiaareconsideredlowerquality.***reporteddifficultieswithavailabilityandtransportation
forspecialtyproductsimportedfromChina.***statedthatasadistributor,transportation,
quality,supplychainrisk,andleadtimesarechallengesinsourcingfromnonͲNAFTAcountries.
***indicatedthatU.S.productishigherqualitythanChineseproduct,andthatChinese
productishigherqualitythanMexicanproduct.***indicatedthatavailabilitywasalwaysa
significantfactorinitspurchasesofIMTDCs.
ELASTICITYESTIMATES
Thissectiondiscusseselasticityestimates;partiesdidnotcommentontheseestimates.
U.S.supplyelasticity
Thedomesticsupplyelasticity19forIMTDCsmeasuresthesensitivityofthequantity
suppliedbyU.S.producerstochangesintheU.S.marketpriceofIMTDCs.Theelasticityof
domesticsupplydependsonseveralfactorsincludingthelevelofexcesscapacity,theeasewith
whichproducerscanaltercapacity,producers’abilitytoshifttoproductionofotherproducts,
theexistenceofinventories,andtheavailabilityofalternatemarketsforU.S.Ͳproduced
IMTDCs.AnalysisofthesefactorsearlierindicatesthattheU.S.industryhastheabilityto
increaseordecreaseshipmentstotheU.S.marketgreatly;anestimateintherangeof4to7is
suggested.
U.S.demandelasticity
TheU.S.demandelasticityforIMTDCsmeasuresthesensitivityoftheoverallquantity
demandedtoachangeintheU.S.marketpriceofIMTDCs.Thisestimatedependsonfactors
discussedearliersuchastheexistence,availability,andcommercialviabilityofsubstitute
products,aswellasthecomponentshareoftheIMTDCsintheproductionofanydownstream
products.Basedontheavailableinformation,theaggregatedemandforIMTDCsislikelytobe
inelastic;arangeofͲ0.5toͲ0.9issuggested.
18Oneofthesepurchasers,***,indicatedthatitscomparisonsarebasedontotalcost,quality,
delivery,andleadtime,notoncountryoforigin.
19AsupplyfunctionisnotdefinedinthecaseofanonͲcompetitivemarket.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 130 of 218
IIͲ19
Substitutionelasticity
Theelasticityofsubstitutiondependsupontheextentofproductdifferentiation
betweenthedomesticandimportedproducts. 20Productdifferentiation,inturn,dependsupon
suchfactorsasquality(e.g.,appearance,packaging,performance,etc.)andconditionsofsale
(e.g.,availability,salesterms/discounts/promotions,etc.).Basedonavailableinformation,the
elasticityofsubstitutionbetweenU.S.ͲproducedlargeͲdiameterIMTDCsandimportedlargeͲ
diameterIMTDCsislikelytobeintherangeof3to5.
20ThesubstitutionelasticitymeasurestheresponsivenessoftherelativeU.S.consumptionlevelsof
thesubjectimportsandthedomesticlikeproductstochangesintheirrelativeprices.Thisreflectshow
easilypurchasersswitchfromtheU.S.producttothesubjectproducts(orviceversa)whenprices
change.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 131 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 132 of 218
IIIͲ1
PARTIII: U.S.PRODUCER’SPRODUCTION,SHIPMENTS,AND
EMPLOYMENT
TheCommissionanalyzesanumberoffactorsinmakinginjurydeterminations(see19
U.S.C.§§1677(7)(B)and1677(7)(C)).Informationonthesubsidiesanddumpingmarginswas
presentedinPartIofthisreportandinformationonthevolumeandpricingofimportsofthe
subjectmerchandiseispresentedinPartIVandPartV.Informationontheotherfactors
specifiedispresentedinthissectionand/orPartVIand(exceptasnoted)isbasedonthe
questionnaireresponsesof10producersthatareestimatedtohaveaccountedfor
approximately90percentofU.S.productionoffinishedIMTDCsduring2015andapproximately
twoͲthirdsofU.S.productionofunfinishedIMTDCs.
U.S.PRODUCERS
TheCommissionissuedU.S.producers’questionnairesto233foundries,integrated
firms,andfinishersidentifiedaspotentialproducersofunfinishedand/orfinishedIMTDCsby
TBWinitspetitions,byinterestedpartiesparticipatingintheseinvestigations,orbyother
availableindustrysources. 1FiveintegratedfirmsthatbothcastandfinishIMTDCsprovideda
responsetotheCommission’sproducerquestionnaire:Bremen,EnDyn,Goldens,Martin
Sprocket,andTBW.Inaddition,fivefinishersthatfinishIMTDCsintheirfacilitiesfrom
purchasedcastingsprovidedausableresponsetotheCommission’sproducerquestionnaire:
B&B,Baldor,HiͲLo,Maurey,andSterling.2
Onefoundry(Waupaca)thatcastsIMTDCsbutdoesnotfinishtheitemsinits
manufacturingfacilitiesalsoprovidedacompleteresponsetotheproducerquestionnaireand
indicated***.Waupaca,whichiswhollyownedby***,reportedthatitsfoundryproduced***
1Thelistofpossibleproducerstowhichquestionnairesweresentincludesintegratedfirms,
foundries,andfinishers.SeventyͲsevenfirmsrespondedthattheydidnotproduceIMTDCs.***ofthe
firmstowhichquestionnaireswereissuedbutthatdidnotrespondwerefirmsidentifiedinthe
preliminaryphaseoftheseinvestigationsbyBaldorasmajordomesticsuppliersofunfinishedIMTDCs
(***)andfinishedIMTDCs(***).***listedbyBaldorthatsuppliedacompletedproducerquestionnaire
responsetotheCommission.Baldornotedthat***accountedfor***percentofitsunfinishedIMTDC
purchasesin2015.Inaddition,***firmsidentifiedbyCaterpillarinthepreliminaryphaseofthese
investigationsasitsmajordomesticsuppliersoffinishedIMTDCs(***)didnotrespondtothe
Commission’sproducerquestionnaireinthesefinalphaseinvestigations,althoughfourfirmsit
identifiedassuppliers(***)indicatedthattheydonotproduceIMTDCs.Caterpillarhasnotifiedthe
Commissioninthesefinalphaseinvestigationsthat,withthemostrecentchangeinthescope,theitems
itimportsarenolongersubjectmerchandise.
2FinisherSkywayalsorespondedtotheCommission’sproducerquestionnairereportingdata
concerningits***.However,accordingtoadditionallanguageconcerningtheexclusionofsuchitemsin
Commerce’sfinaldeterminations,theitemsproducedbySkywayarenolongerinͲscopemerchandise.
Therefore,Skyway’squestionnaireresponseisnotincludedintheaggregatedatapresentedinthis
report.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 133 of 218
IIIͲ2
ofcastingsduring2015,***percentofwhicharebelievedtobeinͲscopeIMTDCs.Italso
reportedthat***.However,becauseWaupaca’squestionnaireresponsewithrespecttoinͲ
scopeIMTDCsisbelievedtobeoverstatedbytheinclusionofoutͲofͲscopeitems,itsdataand
otherfirmͲspecificinformationarenotaggregatedwiththeU.S.industrydatapresentedinthe
bodyofthisreportbutarepresentedseparatelyinappendixC,tablesCͲ2throughCͲ5. 3
Waupaca’sunfinishedIMTDCsthatwerefinishedby***arereflectedintheU.S.industry’sdata
asfinishedIMTDCs.
ThefollowingfouradditionaldomesticfoundriesrespondedtotheCommission’s
producerquestionnairebutwereunabletoprovidecompletedataandotherinformation
requestedbytheCommission:Brillion,GreatLakesCastings,Osco,andTorrance.***reported
thatitproducedapproximately***ofIMTDCsin2015andthatitsfoundryhasanoverall
castingcapacityof***pounds.***reportedthatitsfoundryhasanoverallcastingcapacityof
***.Itnotedthatitproduces“numerous”otherproducts,suchashydraulicbrakecomponents,
oilpumpbodies,oilpumpcovers,valvebodies,pumpbodies,endbells,pillowblocks,elbows,
andnumerousotherparts.Itstatedthat“mostfoundriesproduceavarietyofcastingsnotjust
oneproductlinesuchassheaves,pulleys,etc.”***reportedthatitsoverallcastingbusiness
amountstoapproximately***,ofwhichIMTDCsareestimatedtoaccountfor***.***
reportedthatitshipped***ofIMTDCcastingsin2015tocustomersthatincorporatedthe
castingsascomponentsintheirproductlinesratherthansellingthemachinedpart.
3OfthetoptenfirmsthatWaupacalistedasitmaincustomersofIMTDCs(***),threefirms(i.e.,
***)havereportedthatinͲscopemerchandiseisnotpartoftheirproductlinepurchases.Inaddition,
***isafirmthatisnotlikelytoincludeinͲscopeitemsinitsproductlinesbasedonareviewofthefirm’s
webpagesand***reportedsourcingIMTDCsonlyfromU.S.finishersandnotfromcastingoperations.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 134 of 218
IIIͲ3
TableIIIͲ1listsrespondingintegratedU.S.producersandfinishersofIMTDCs,their
productionlocations,positionsonthepetitions,andsharesofreported2015production.
Table III-1
IMTDCs: U.S. producers, their position on the petitions, location of production, and share of
reported production, 2015
Firm
Position on
petition
Production
location(s)
Share of casting
production (percent)
Share of finishing
production (percent)
Based on
pieces
Based on
pounds
Based on
pieces
Based on
pounds
B&B *** La Porte, IN *** *** *** ***
Baldor *** Weaverville, NC 1 *** *** *** ***
Bremen *** Bremen, IN *** *** *** ***
EnDyn ***
Alice, TX
San Antonio, TX *** *** *** ***
Goldens *** Columbus, GA *** *** *** ***
Hi-Lo *** Stacy, MN *** *** *** ***
Martin
Sprocket ***
Arlington, TX
Abilene, TX
Ft. Worth, TX
Dallas, TX *** *** *** ***
Maurey *** 3 Holly Springs, MS *** *** *** ***
Sterling *** Columbus, IN *** *** *** ***
TBW 4 Petitioner Chambersburg, PA *** *** *** ***
Total *** *** *** ***
1 Baldor closed its Canadian facility and relocated the production finishing equipment to its facilities in
Weaverville and Marion, North Carolina.
2 Less than 0.05 percent.
3 ***.
4 ***.
Source: Compiled from data submitted in response to Commission questionnaires.
Relatedand/oraffiliatedfirms
TableIIIͲ2presentsinformationonU.S.producers’ownershipandrelatedand/or
affiliatedfirms.Asshown,***are(orwere)relatedtoforeignproducersofthesubject
merchandise.However,aspreviouslynoted,BaldorCanadacloseditsSt.Claire,Quebecfacility
onMay27,2016andrelocateditsCanadianfinishingequipmenttotheBaldorfacilitiesin
WeavervilleandMarion,NorthCarolina.AlsoBaldorChina/Maskapermanentlyclosedits
Changzhou,ChinafacilityinDecember2014anddisposedofalloftheproductionequipment. 4
Table III-2
IMTDCs: U.S. producers' ownership, related and/or affiliated firms
*******
4Conferencetranscript,p.22(McCartney).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 135 of 218
IIIͲ4
Changesinoperations
Severalrespondingdomesticproducersreportedchangesintheiroperationsrelatedto
theproductionofIMTDCssinceJanuary1,2013.Detailsconcerningthechangesreportedare
presentedintableIIIͲ3.
Table III-3
IMTDCs: U.S. producers' reported changes in operations, since January 1, 2013
*******
WithregardstotheclosureofitsCanadianfacility,Baldorreportedthat,***.5This
decisiontocloseitsSt.ClairefacilityandrelocateitsequipmenttoNorthCarolinawasreported
byparentABBpubliclyinanApril2016pressrelease.6Inthatannouncement,thecompany
notedthat“Thecurrenteconomiccontext,theslowdowninworldmarketsandinstabilityinoil
andgaspricesareallfactorsthathaveledtoadeclineindemandforproductsmadeinthe
installationofSt.Claire.Inaddition,thepetitionlaunchedintheU.S.inautumn2015tothe
impositionofantidumpingdutiesoncertaincomponentsusedininstallationsSt.Claireledto
furtheruncertainties.Therefore,thisconsolidationofoperationswillallowustotake
advantageoftheexcesscapacityofourotherfacilities,toenhanceourcompetitivenessand
improvetheservicetoourNorthAmericancustomers.”7
BaldorreportedtotheCommissionthattherelocationoftheCanadianfacilitytothe
UnitedStateswasdoneto***.Infact,BaldorreportedthattheSt.Clairemanufacturingfacility
inCanadais***.Baldorreportedthatitcurrentlysourcescastingsforthepartsmachinedon
thefinishingequipmentmovedfromCanadatotheUnitedStatesprimarilyfrom***.8
PRODUCTIONͲRELATEDACTIVITIES
IntheCommission’sproducerquestionnaire,firmswithfinishingoperationsbutnot
castingoperationswereaskedtodescribethesourceandextentoftheircapitaland
investment,thequantityandtypeofpartssourcedintheUnitedStates,thevalueͲadded
operationsperformedintheUnitedStates,thetechnicalexpertiseinvolvedintheU.S.finishing
operations,andanyothercostsoractivitiesintheUnitedStatesdirectlyleadingtothe
productionoffinishedIMTDCs.Inaddition,firmswithbothcastingandfinishingoperationsin
5***.
6“ABBconsolidesesactivitésdeSainteͲClaireauxÉtatsͲUnis,”CNWTelbic,April26,2016,accessed
athttp://www.newswire.ca/fr/newsͲreleases/abbͲconsolideͲsesͲactivitesͲdeͲsainteͲclaireͲauxͲetatsͲ
unisͲ577168771.html.
7Ibid.(translatedfrompressreleaseinFrench).
8***.Inthepreliminaryphaseoftheseinvestigations,Baldorreportedthatitsourcedcastingsforits
U.S.facilitysolelyfromU.S.foundries.Conferencetranscript,pp.17Ͳ18(McCartney).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 136 of 218
IIIͲ5
theUnitedStateswereaskedtodescribeandquantifytheamountofcapitalinvestment
neededtoproduceIMTDCsforcastingandforfinishingseparately.TheresponsesofU.S.
producerstotheseitemsaresummarizedbelow.
Capitalinvestments
Fivedomesticproducerswithfinishingoperationsbutnotcastingoperationsprovided
feedbackontheCommission’srequesttodescribethesourceandextentoftheircapitaland
investments.TheresponsesofthesefivefinishersaresummarizedintableIIIͲ4.
Table III-4
IMTDCs: U.S. finishers' source and extent of capital investment
*******
Fiveintegratedproducers(i.e.,firmsthatoperatebothcastingandfinishingoperations
intheUnitedStates)providedfeedbackontheCommission’srequesttodescribeandquantify
theamountofcapitalinvestmentneededtoproduceIMTDCsforcastingandforfinishing
separately.TheresponsesofthesefiveintegratedproducersarelistedintableIIIͲ5.
Table III-5
IMTDCs: U.S. integrated producers' extent of capital investment
*******
Technicalexpertise
TendomesticproducersprovidedfeedbackontheCommission’srequesttodescribethe
technicalexpertiseinvolvedintheU.S.finishingoperations.AllfivefirmsthatfinishIMTDCsbut
donotalsocasttheitemsindicatedintheirquestionnaireresponsesthattechnicalexpertiseis
requiredtomachineIMTDCsfromtheunfinishedcastings.Threeintegratedfirms(***)
reportedthatnosubstantialtechnicalexpertiseisrequiredtomachineIMTDCsfromthe
unfinishedcastingsandthreesmallerintegratedfirms(***)indicatedthatsuchexpertiseis
required.TheresponsesofthesefirmsaresummarizedintableIIIͲ6.
Table III-6
IMTDCs: U.S. producers' technical expertise
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 137 of 218
IIIͲ6
Valueadded
SixdomesticproducersprovidednarrativefeedbackontheCommission’srequestto
describethevalueaddedoperationsbyfinishersintheUnitedStates.Theresponsesofthese
firmsaresummarizedintableIIIͲ7.
Table III-7
IMTDCs: U.S. finishers' value added
*******
TheCommissionexaminedconverting/finishingoperationsandthevalueaddedtothe
rawmaterialspurchasedorprovidedbythefirmusingsuchservices(atolleetotoller
relationship,forexample).ThevalueͲaddedanalysisusestworatios:(1)theratioofconversion
costs,whicharedirectlaborandotherfactorycosts(factoryoverhead)tototalCOGS;and(2)
theratioofthesumofconversioncostsplusSG&AexpensestothesumoftotalCOGSplus
SG&Aexpenses.Theanalysisreliesontheseparationofcostsoftheinputrawmaterialfrom
costsrelatedtothatrawmaterial’sconversiontofinishedproduct.Intheseinvestigations,the
coststructureofthefirmsthatperformfinishingoperationsreflectstheirpurchasesofcastings
andtheirfinishingoperationsonly. 9TableIIIͲ8depictsvalueͲaddedcalculationsforthefive
finishersandMartinSprocket.AvalueͲaddedcalculationisshownseparatelyforTBW’sMexico
finishingoperations.
Table III-8
IMTDCs: Value-added analysis of U.S. firms performing finishing operations in the United States,
and TBW’s Mexico finishing operations, fiscal years 2013-15, January-June 2015, and January-
June 2016
*******
Employmentlevels
Theemploymentlevelsreportedbyintegratedproducers(Bremen,EnDyn,Goldens,
MartinSprocket,andTBW)andfinishers(B&B,Baldor,HiͲLo,Maurey,andSterling)are
presentedseparatelybytypeofproducerintableIIIͲ9.Apresentationoffullaggregate
employmentindicatorsforalldomesticproducersispresentedlaterinPartIII(seetableIIIͲ18).
9Fivereportingfirmsthatarefinishersonly,i.e.,thosethatdonothavecastingcapabilityandrelyon
purchasesofcastblanks,wereidentifiedinfootnote1ofPartVI:B&B,Baldor,HiͲLo,Maurey,and
Sterling.MartinSprocketalsoutilizescastings***.Additionally,TBWfinishescastingsthatweremadeat
itsU.S.facilityatafacilityinMexico.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 138 of 218
IIIͲ7
Table III-9
IMTDCs: U.S. production and related workers, by type of producer, 2013-15, January to June
2015, and January to June 2016
*******
Sourcingofparts
WithregardtotheCommission’srequestoffinisherBaldortodescribethequantityand
typeofpartssourcedintheUnitedStates,thefirmresponded***.10Thedomesticfoundries
fromwhichBaldorpurchasedunfinishedIMTDCcastingsin2015withthepercentageeach
representedofthefirm’stotalunfinishedcastingpurchasesisasfollows:***.11During2015,
Baldor’sU.S.purchasesofunfinishedcastingsproducedintheUnitedStatesamountedto$***.
FinisherSterlingreportedthat***ofitscastings/forgingsforIMTDCsaresourcedinthe
UnitedStatesandlistedthefollowingdomesticsuppliersofunfinishedIMTDCs:***.During
2015,Sterling’sU.S.purchasesofunfinishedcastingsproducedintheUnitedStatesamounted
toalmost$***.
FinisherMaurey,whichreported$***ofU.S.purchasesofunfinishedcastingsproduced
intheUnitedStatesin2015,listeditsdomesticsuppliersofunfinishedIMTDCsasfollows:***.
Maureyreportedthat***ofitsproductionoffinishedIMTDCsin2015(basedonquantityin
pieces)werefromdomesticallyproducedcastingsandtheremaining***werefromimported
castings.
FinisherHiͲLoreportedthat***ofitscastings/forgingsforIMTDCsaresourcedinthe
UnitedStatesfrom***.AlthoughHiͲLodidnotprovidedataconcerningtheamountofitsU.S.
purchasesofcastings,itreportedthatU.S.shipmentsoffinishedIMTDCs(***producedfrom
domesticcastings)amountedto$***in2015.
During2015,***percentofU.S.producers’combinedfinishedIMTDCproductionin
termsofpieceswasfromunfinishedIMTDCs***.Approximately***ofU.S.producers’
combinedfinishedIMTDCproductionin2015wasfrom***castIMTDCs.Only***percentwas
fromunfinishedIMTDCs***and***percentwasfromunfinishedIMTDCs***.
Othercostsandactivities
OthercostsoractivitiesintheUnitedStatesdescribedbyIMTDCproducersasdirectly
leadingtotheproductionoffinishedIMTDCsincludethefollowing:sourcing,manufacturing,
designengineering,machinesetͲup,productionscheduling,maintenance(plant,tooling,and
equipment),staffing,humanresources,insurance,overhead,SG&Aexpenses,and
subcontractedspecifications,suchaspaintingorplating.
10However,BaldorreportedtotheCommissionthat***.Baldor’sresponsetosupplemental
questions,EDISDocumentNumber593979.
11Allofthesefoundrieswereissuedproducerquestionnaires***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 139 of 218
IIIͲ8
U.S.PRODUCTION,CAPACITY,ANDCAPACITYUTILIZATION
CombinedU.S.capacity,production,andcapacityutilizationdataforallfinishedand
unfinishedIMTDCsarepresentedintableIIIͲ10andfigureIIIͲ1.Thecapacityandproduction
presentedisreportedonacombinedor“merged”basis,removingthedoubleͲcountingfor
castingproductionandcapacitythatiseitherreflectedinfinishers’capacityandproduction
because(1)thefirminternallyconsumesunfinishedIMTDCsthatitproduces,or(2)thefinisher
reportedcapacityandproductionofproductsthatitmanufacturedfromunfinishedIMTDCs
thatitpurchasedatanarm’slengthfromadomesticfoundry.Thereporteddatashowthatthe
domesticproducers’aggregatecapacityincreasedfrom2013to2015,whilereporteddomestic
productionincreasedfrom2013to2014,butfellin2015toalevelhigherthanreportedin
2013.Capacityutilizationincreasedfrom***percentin2013to***percentin2014butfellto
***percentin2015.Capacity,production,andcapacityutilizationwerelowerduringthefirst
halfof2016thaninthecomparableperiodof2015.
Table III-10
IMTDCs: U.S. producers' capacity, production, and capacity utilization, 2013-15, January to June
2015, and January to June 2016
*******
Figure III-1
IMTDCs: U.S. producers' capacity, production, and capacity utilization, 2013-15, January to June
2015, and January to June 2016
*******
Alternativeproducts
FinishedIMTDCs
PresentedintableIIIͲ11aredataconcerningdomesticfirms’overallcapacityand
productionintheirfinishingoperations.Thesedatashowthatduring2015,***(intermsof
pounds)andapproximately***(intermsofpieces)offinisheditemsproducedbyresponding
U.S.firmsareIMTDCs,regardlessofsize,whereas***(intermsofpounds)andapproximately
***(intermsofpieces)ofproductionareothernonͲIMTDCitems.Sixdomesticproducers
reportedtheproductionofotherproductsfinishedonthesameequipmentasIMTDCs.These
otherproductsinclude***.SixrespondingfirmsthatfinishIMTDCs(***)indicatedthatthey
wereabletoswitchproductionfromIMTDCstootherproductsusingthesameequipmentand
labor,whereasfourfirms(***)indicatedthattheycouldnot.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 140 of 218
IIIͲ9
Table III-11
IMTDCs: U.S. firms’ overall finishing capacity and production on the same equipment as in-scope
finished IMTDC production, 2013-15, January to June 2015, and January to June 2016
*******
UnfinishedIMTDCs
PresentedintableIIIͲ12aredataconcerningdomesticfirms’overallcastingcapacityand
production.Thesedatashowthatduring2015,***percent(intermsofpieces)ofunfinished
items(i.e.,castings)producedbyrespondingU.S.firmsareIMTDCs,regardlessofsize,whereas
***percent(intermsofpieces)ofproductionareothernonͲIMTDCcastings.OthernonͲIMTDC
castingsinclude***.ThreerespondingfirmsthatcastIMTDCs(***)indicatedthattheywere
abletoswitchproductionfromIMTDCcastingstootherproductsusingthesameequipment
andlabor,whereastwofirms(***)indicatedthattheycouldnot.
Table III-12
IMTDCs: U.S. firms’ overall casting capacity and production on the same equipment as in-scope
unfinished IMTDC production, 2013-15, January to June 2015, and January to June 2016
*******
U.S.PRODUCERS’U.S.SHIPMENTSANDEXPORTS
TotalU.S.shipmentsofIMTDCs
TableIIIͲ13presentstotalU.S.shipmentsofIMTDCsforpurposesoftheapparentU.S.
consumptioncalculation.TheseU.S.shipmentdatareflectU.S.producers’U.S.shipmentsof
finishedIMTDCsproducedfrominternallyconsumedunfinishedIMTDCsandfromdomestically
purchasedunfinishedIMTDCs.ThedataalsoincludecommercialU.S.shipmentsofunfinished
IMTDCsnetofthoseusedandreportedbyfinishersasfinishedIMTDCs.ThevalueofU.S.
producers’U.S.shipmentsforapparentU.S.consumptionpurposesreflectsthetotalshipment
valuesofthequantitymeasuresdescribedabove,butalsoaddsintheincrementalvalue
attributabletofinishingoperationsconductedintheUnitedStatesonimportsofunfinished
IMTDCs.However,theaverageunitvalueofU.S.producers’U.S.shipmentsdoesnotinclude
thevalueaddedtotheimportedunfinishedIMTDCs,asthequantitiesarecountedasimportsin
apparentU.S.consumption.ThesedatashowthattotalU.S.producers’U.S.shipmentsof
IMTDCsdeclinedirregularlyintermsofquantityandvaluefrom2013to2015.U.S.shipments
werelowerinthefirsthalfof2016intermsofpiecesandvaluethaninthecomparableperiod
of2015.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 141 of 218
IIIͲ10
Table III-13
IMTDCs: U.S. producers' U.S. shipments for use in apparent U.S. consumption, 2013-15, January
to June 2015, and January to June 2016
*******
FinishedIMTDCs
TableIIIͲ14presentsU.S.producers’U.S.shipments,exportshipments,andtotal
shipmentsoffinishedIMTDCs.VirtuallynointernalconsumptionorU.S.companytransfersof
finishedIMTDCswerereportedbyU.S.producers.U.S.producers’totalshipments,ofwhich
morethan***percentwereU.S.shipmentsduring2013Ͳ15,increasedfrom2013to2014,but
fellin2015toalevelthatwashigherthanreportedin2013.U.S.producers’totalshipments
werelowerinthefirsthalfof2016thaninthefirsthalfof2015.TotalU.S.producers’U.S.
shipmentsoffinishedIMTDCsintermsofquantity(inpieces)andvaluelikewiseincreasedfrom
2013to2014,butdeclinedin2015tolevelshigherthanthosereportedin2013.TotalU.S.
producers’U.S.shipmentsoffinishedIMTDCswerelowerinthefirsthalfof2016thanthey
wereinthecomparableperiodof2015intermsofquantity(inpieces)andvalue.Unitvaluesof
U.S.shipments,whichwereconsistentlylowerthanU.S.producers’exportunitvalues,fellfrom
2013to2014butincreasedin2015.TheunitvalueofU.S.shipmentsinthefirsthalfof2016
waslowerthantheunitvalueinthefirsthalfof2015.
***firmsreportedexportshipmentsoftheIMTDCstheyfinished.Principalexport
marketsidentified***include***,whereas***.***didnotidentifytheirprincipalexport
markets.***wasthelargestexporteroffinishedIMTDCs,accountingformorethan***of
domesticproducers’U.S.exportsduring2015intermsofvalue.Exportsaccountedfor***
percentofU.S.producers’combinedtotalshipmentsoffinishedIMTDCsintermsofpieces
during2015and***percentintermsofvalue.
Table III-14
IMTDCs: U.S. producers' U.S. shipments, export shipments, and total shipments of finished
IMTDCs, 2013-15, January to June 2015, and January to June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 142 of 218
IIIͲ11
UnfinishedIMTDCs(notfurtherfinishedbyfirmintheUnitedStates)
TableIIIͲ15presentsU.S.producers’U.S.shipments,exportshipments,andtotal
shipmentsofunfinishedIMTDCs.TworespondingIMTDCintegratedproducerswithcasting
operationsreportedcommercialU.S.shipmentsofunfinishedIMTDCsproducedintheir
facilities(***).***wastheonlyrespondingIMTDCcasterthatreportedexportsofunfinished
castings.***.U.S.producers’U.S.shipmentsofunfinishedIMTDCsgenerallydeclinedfrom
2013to2015intermsofquantity(inpieces)andvalue.Inaddition,suchshipmentsduringthe
firsthalfof2016werelowerthanreportedinthecomparableperiodin2015.
Table III-15
IMTDCs: U.S. producers' U.S. shipments, export shipments, and total shipments of unfinished
IMTDCs, 2013-15, January to June 2015, and January to June 2016
*******
U.S.PRODUCERS’INVENTORIES
TableIIIͲ16presentsU.S.producers’endͲofͲperiodinventoriesoffinishedIMTDCsand
theratiooftheseinventoriestoU.S.producers’production,U.S.shipments,andtotal
shipmentsduring2013Ͳ15,JanuarytoJune2015,andJanuarytoJune2016.Sevendomestic
producersheldinventoriesoffinishedIMTDCsduring2015,ofwhich***accountedfor***
percentofthetotalheldininventory.AggregatedatashowthatinventoriesoffinishedIMTDCs
increasedduring2013Ͳ15andwerehigherinthefirsthalfof2016thaninthefirsthalfof2015.
U.S.producers’inventorieswereequivalenttobetween***percentofU.S.producers’total
shipmentsduring2013Ͳ15,andreached***percentduringthefirsthalfof2016.Therewere
noreportedinventoriesofunfinishedcastingsheldbyU.S.producers.
Table III-16
IMTDCs: U.S. producers' inventories of finished IMTDCs, 2013-15, January to June 2015, and
January to June 2016
*******
U.S.PRODUCERS’IMPORTS
U.S.producers’importsofIMTDCsarepresentedintableIIIͲ17.
Table III-17
IMTDCs: U.S. producers' imports, 2013-15, January to June 2015, and January to June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 143 of 218
IIIͲ12
U.S.EMPLOYMENT,WAGES,ANDPRODUCTIVITY
TableIIIͲ18showsU.S.producers’employmentͲrelateddata.CombinedU.S.producers’
employmentmeasuredbyproductionandrelatedworkers(“PRWs”)increasedoverallfrom
2013to2015,butwaslowerduringthefirsthalfof2016ascomparedwiththefirsthalfof
2015.Totalhoursworked,hoursworkedperPRW,andwagespaidfollowedthissamegeneral
trend.Productivityshowedoveralldeclinessince2013beforepartiallyrecoveringinJanuaryͲ
June2016;however,hourlywagesandunitlaborcostshowedconsistentincreases.
Table III-18
IMTDCs: U.S. producers' employment related data, 2013-15, January to June 2015, and January to
June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 144 of 218
IVͲ1
PARTIV: U.S.IMPORTS,APPARENTU.S.CONSUMPTION,ANDMARKET
SHARES
U.S.IMPORTERS
TheCommissionissuedimporterquestionnairesto91firmsbelievedtobepossible
importersofsubjectlargeͲdiameterIMTDCs,aswellastoanadditional212firmsthatwere
identifiedaspossibleU.S.producersofIMTDCs. 1Usablequestionnaireresponseswerereceived
from25companiesindicatingthattheyhadimportedIMTDCs,whileanadditional120firms
reportedthattheyhadnotimportedIMTDCssinceJanuary1,2013.TableIVͲ1listsall
respondingU.S.importersofIMTDCsfromCanada,China,andothersources,theirlocations,
andtheirsharesofreportedU.S.importsofIMTDCsin2015. 2
Forpurposesofidentifyingpossibleimportersofthesubjectmerchandisetowhich
questionnaireswereissuedintheseinvestigations,stafffocusedonavailableinformation
pertainingtothefollowingthreeHTSstatisticalreportingnumbers:8483.50.6000,
8483.50.9040,and8483.90.8080.Thepetitionerreliedonthesethreenumbersasthebest
availableforitscalculationofU.S.importsinitspetitions,althoughitnotedthatthesenumbers
arebroaderproductcategorieswhichlikelyincludemerchandisethatisoutsidethescopeof
thepetitions. 3
1TheCommissionissuedquestionnairesto18firmsidentifiedinthepetitions,alongwithadditional
firmsthat,basedonareviewofdataprovidedbyU.S.CustomsandBorderProtection(“Customs”),are
leadingimportersofitemsimportedunderHTSstatisticalreportingnumbers8483.50.6000,
8483.50.9040,and8483.90.8080(theprimaryHTSstatisticalreportingnumbersidentifiedinthe
petitions)since2013.Inaddition,allfirmsreceivingaU.S.producerquestionnairealsoreceivedaU.S.
importerquestionnaire.
2Inadditiontothe25companieslistedintableIVͲ1thatprovidedusableimporterquestionnaire
responses,LorenCookCo.(“Cook”)alsoprovidedaquestionnaireresponsethatincluded***.
3Petitions,vol.I,p.10.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 145 of 218
IVͲ2
Table IV-1
IMTDCs: U.S. importers, their headquarters, and share of total imports by source (based on
pieces), 2015
Firm Headquarters
Share of imports by source (percent)
Canada China
Subject
sources
Non-
subject
large-
diameter
Total
large-
diameter
Total
small-
diameter
Total
all
sizes
AMEC Industry Ontario, CA *** *** *** *** *** *** ***
ATP Inc.
Elk Grove
Village, IL *** *** *** *** *** *** ***
B&B Laporte, IN *** *** *** *** *** *** ***
Baart Industrial Group Boise, ID *** *** *** *** *** *** ***
Baldor Ft. Smith, AR *** *** *** *** *** *** ***
Bando USA Inc. Itasca, IL *** *** *** *** *** *** ***
CNH Industrial Racine, WI *** *** *** *** *** *** ***
Cummins Inc. Columbus, IN *** *** *** *** *** *** ***
Daimler Trucks North
America Portland, OR *** *** *** *** *** *** ***
Detroit Diesel Detroit, MI *** *** *** *** *** *** ***
Martin Sprocket Arlington, TX *** *** *** *** *** *** ***
MasterDrive, Inc.
Fort Atkinson,
WI *** *** *** *** *** *** ***
Maurey
Holly Springs,
MS *** *** *** *** *** *** ***
McGuire Bearing Portland, OR *** *** *** *** *** *** ***
MTU America Inc. Novi, MI *** *** *** *** *** *** ***
New Standard Power
Transmission Ontario, CA *** *** *** *** *** *** ***
New Hampshire
Industries Lebanon, NH *** *** *** *** *** *** ***
Nord Gear Corp. Waunakee, WI *** *** *** *** *** *** ***
RAK Ind., Inc., dba
Power Rite Products
New Brunswick,
NJ *** *** *** *** *** *** ***
Regal Beloit Corp. Beloit, WI *** *** *** *** *** *** ***
Schaeffler Group USA Fort Mill, SC *** *** *** *** *** *** ***
Scott Engineering Loveland, OH *** *** *** *** *** *** ***
TBW
Chambersburg,
PA *** *** *** *** *** *** ***
The Crosby Group Tulsa, OK *** *** *** *** *** *** ***
U.S. Tsubaki Wheeling, IL *** *** *** *** *** *** ***
Total *** *** *** *** *** *** ***
1 ***.
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 146 of 218
IVͲ3
Staffissuedquestionnairestoleadingcompaniesidentifiedin***thattogether
accountedfor61.0percentofthetotalvalueofimportsfromallcountriesunderthethree
primaryHTSprovisionsidentifiedbypetitioner.4Companiesthatrespondedtothe
Commission’squestionnaires,eitherwithdataorbycertifyingthattheydidnotimportthe
subjectmerchandise,accountedforthefollowingsharesof2015imports(byvalue)under
thoseprovisions,accordingto***:
• Canada:82.2percent
• China:40.0percent
• Subjectcountries(CanadaandChina):55.7percent
• Nonsubjectcountries:40.4percent
• Total(subjectandnonsubject):46.2percent
Staffalsoissuedquestionnairestoallcompaniesidentifiedasimportersinthepetitions
(basedonabroaderproposedscopethanthatonwhichCommercemadeitspreliminary
determinations).Fifteenoftheeighteencompaniesidentifiedinthepetitionsasimporters
responded(83percent),eitherwithdataorbycertifyingthattheydidnotimportthesubject
merchandise.
Staffestimatesimporters’questionnairedatacoveragetobeatleast50percent.
However,presentingadecisiveestimateiscomplicatedbytheinclusionofsubjectand
nonsubjectmerchandiseinthevariousrelevantHTSprovisions,thelargenumberofpotential
importersidentifiedbyproprietaryCustomsdata(especiallycomparedtotherelativelysmall
numberofimportersidentifiedinthepetitions),thediversityofsizesandapplicationsofthe
productatissue(makingitdifficulttoidentifyrelevantimportersbybusinesslineoraverage
unitvalueonimports),andtheshiftingdefinitionoftheimportedsubjectmerchandiseitself.
U.S.IMPORTS
U.S.importsfromsubjectandnonsubjectsources
IMTDCs
TableIVͲ2andfigureIVͲ1presentdataforU.S.importsofIMTDCsfromCanada,China,
andallothersources.ThesedatashowthatimportsofinͲscopeIMTDCs(i.e.,atleast4inchesin
outsidediameter)fromthesubjectcountriesincreasedby7.4percentbasedonquantity(in
pieces)and10.3percentbasedonvaluefrom2013to2015.Theseimportswere23.1percent
lowerbasedonquantity(inpieces)and28.2percentlowerbasedonvalueduringthefirsthalf
of2016comparedwiththefirsthalfof2015.Theaverageunitvalueofsubjectimports
4Theremaining39percentofthetotalvalueofimportsunderthethreeprimaryHTSprovisionswere
importedbymorethan3,000smallerimportingfirms.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 147 of 218
IVͲ4
increasedoverallfrom2013to2015,butwaslowerinthefirsthalfof2016comparedwiththe
firsthalfof2015.
Table IV-2
IMTDCs: U.S. imports, by source, 2013-15, January to June 2015, and January to June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Quantity (pieces)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 1,461,606 1,525,610 1,569,599 757,013 582,468
Nonsubject sources large-diameter 636,044 652,449 633,414 321,527 346,244
Nonsubject sources small-diameter 2,645,744 2,836,622 2,873,882 1,431,003 1,586,087
Nonsubject sources of all sizes 3,281,788 3,489,071 3,507,296 1,752,530 1,932,331
All sources all sizes 4,743,394 5,014,681 5,076,895 2,509,543 2,514,799
Value (1,000 dollars)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 34,241 35,732 37,778 18,456 13,246
Nonsubject sources large-diameter 24,544 24,998 23,578 11,880 11,213
Nonsubject sources small-diameter 28,050 34,476 21,116 10,581 9,930
Nonsubject sources of all sizes 52,594 59,474 44,693 22,461 21,143
All sources all sizes 86,835 95,205 82,471 40,917 34,388
Unit value (dollars per piece)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 23.43 23.42 24.07 24.38 22.74
Nonsubject sources large-diameter 38.59 38.31 37.22 36.95 32.39
Nonsubject sources small-diameter 1 10.60 12.15 7.35 7.39 6.26
Nonsubject sources of all sizes 16.03 17.05 12.74 12.82 10.94
All sources all sizes 18.31 18.99 16.24 16.30 13.67
Table continued on next page.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 148 of 218
IVͲ5
Table IV-2--Continued
IMTDCs: U.S. imports, by source, 2013-15, January to June 2015, and January to June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Share of quantity (percent)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 30.8 30.4 30.9 30.2 23.2
Nonsubject sources large-diameter 13.4 13.0 12.5 12.8 13.8
Nonsubject sources small-diameter 55.8 56.6 56.6 57.0 63.1
Nonsubject sources of all sizes 69.2 69.6 69.1 69.8 76.8
All sources all sizes 100.0 100.0 100.0 100.0 100.0
Share of value (percent)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 39.4 37.5 45.8 45.1 38.5
Nonsubject sources large-diameter 28.3 26.3 28.6 29.0 32.6
Nonsubject sources small-diameter 32.3 36.2 25.6 25.9 28.9
Nonsubject sources of all sizes 60.6 62.5 54.2 54.9 61.5
All sources all sizes 100.0 100.0 100.0 100.0 100.0
Ratio to U.S. production (percent)
U.S. imports from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources *** *** *** *** ***
Nonsubject sources large-diameter *** *** *** *** ***
Nonsubject sources small-diameter *** *** *** *** ***
Nonsubject sources of all sizes *** *** *** *** ***
All sources all sizes *** *** *** *** ***
1 The increase in unit value for U.S. imports of small-diameter IMTDCs from nonsubject sources from
2013 and 2014 and the decline in unit value from 2014 to 2015 is largely attributable to a change in
imported product mix by ***, which accounted for ***.
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 149 of 218
IVͲ6
Figure IV-1
IMTDCs: U.S. import volumes and prices, 2013-15, January to June 2015, and January to June
2016
Source: Compiled from data submitted in response to Commission questionnaires.
AsashareoftotalIMTDCimports(intermsofpieces),inͲscopeimportsfromCanada
andChinacombineddecreasedfrom30.8percentin2013to30.4percentin2014,before
increasingto30.9percentin2015.InͲscopeimportsfromsubjectcountriesaccountedfor30.2
percentoftotalimports(intermsofpieces)inthefirsthalfof2015and23.2percentoftotal
U.S.importsinthefirsthalfof2016.AsashareoftotalIMTDCimports(intermsofvalue),inͲ
scopeimportsfromCanadaandChinacombineddecreasedfrom39.4percentin2013to37.5
percentin2014,beforeincreasingto45.8percentin2015.InͲscopeimportsfromsubject
countriesaccountedfor45.1percentoftotalimports(intermsofvalue)inthefirsthalfof2015
and38.5percentoftotalU.S.importsinthefirsthalfof2016.
MexicowasoneofthelargestreportednonsubjectsourcesforU.S.importsofIMTDCs,
accountingfor***percentoftotalU.S.importsoflargeͲdiameterIMTDCsin2015intermsof
quantity(inpieces),***percentoftotalU.S.importsofsmallͲdiameterIMTDCs,and***
percentofthequantityoftotalU.S.importsofIMTDCsin2015. 5U.S.importsofIMTDCsfrom
allnonsubjectcountriesincreasedoverallfrom2013to2015(intermsofquantityinpieces),
andwerehigherduringthefirsthalfof2016thaninthecomparableperiodof2015.The
averageunitvaluesofnonsubjectimportsdecreasedfrom2013to2015,andwerelowerinthe
firsthalfof2016comparedwiththefirsthalfof2015.
ThecombinedratioofinͲscopeimportsfromCanadaandChinatoU.S.production(on
thebasisofquantityinpieces)fellfrom***percentin2013to***percentin2014,but
increasedto***percentin2015.Thecombinedratiowaslowerinthefirsthalfof2016at***
percentthaninthefirsthalfof2015at***percent.Adecliningoveralltrendintheratioof
5ThesedatadonotincludeTBW’simportsofIMTDCsfinishedinMexicofromcastingsproducedin
theUnitedStates.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 150 of 218
IVͲ7
importstoU.S.productionwasobservedforCanadaindividually,withtheratioofinͲscope
importsfromCanadatoU.S.productionfallingfrom***percentin2013to***percentin
2015.AnoverallincreasingtrendintheratioofimportstoU.S.productionwasobservedfor
Chinaindividually,withtheratioofinͲscopeimportsfromChinatoU.S.productionincreasing
from***percentin2013to***percentin2015.TheratiosforCanadaandChinawerelowerin
thefirsthalfof2016at***percentand***percentthaninthefirsthalfof2015at***percent
and***percent,respectively.
FinishedandunfinishedIMTDCs
TableIVͲ3presentsdataforU.S.shipmentsofimports,bysourceandbylevelof
finishing(i.e.,finishedandunfinished).ThesedatashowthatalmostallIMTDCimports(***
percentofU.S.shipmentsofimportsin2015basedonquantityinpiecesand***percentof
U.S.shipmentsofimportsin2015basedonvalue)arefinished.Ofthelimitedvolumeof
unfinishedIMTDCs,U.S.shipmentsofinͲscopeimportsfromChinaaccountedforthemajority
ofthetotalU.S.shipmentsofunfinishedIMTDCimports(***).ForfinishedIMTDCs,
Commerce’sscopeindicatesthatthecountryoforiginforimportedITDCsisthecountrywhere
thefinishedIMTDCwascast/forged,sotheCommission’squestionnairedatawerecollectedon
thatbasis.
Table IV-3
IMTDCs: U.S. importers' U.S. shipments by source and finishing, 2013-15, January to June 2015,
and January to June 2016
*******
Table continued on following page.
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IVͲ8
Table IV-3--Continued
IMTDCs: U.S. importers' U.S. shipments by source and finishing, 2013-15, January to June 2015,
and January to June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Quantity (pieces)
U.S. shipments of IMTDCs imported from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 1,319,110 1,405,280 1,349,482 695,379 521,554
Nonsubject sources large-diameter 578,694 588,300 561,421 281,534 305,140
Nonsubject sources small-diameter 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258
Nonsubject sources of all sizes 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398
All sources all sizes 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952
Value (1,000 dollars)
U.S. shipments of IMTDCs imported from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 42,171 44,129 40,231 21,036 15,612
Nonsubject sources large-diameter 28,290 27,518 26,430 13,170 13,191
Nonsubject sources small-diameter 33,645 39,695 25,623 12,964 12,107
Nonsubject sources of all sizes 61,934 67,213 52,053 26,135 25,298
All sources all sizes 104,105 111,342 92,284 47,170 40,910
Unit value (dollars per piece)
U.S. shipments of IMTDCs imported from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 31.97 31.40 29.81 30.25 29.93
Nonsubject sources large-diameter 48.89 46.78 47.08 46.78 43.23
Nonsubject sources small-diameter 13.26 15.36 10.03 10.00 9.49
Nonsubject sources of all sizes 19.88 21.19 16.70 16.56 16.00
All sources all sizes 23.48 24.32 20.66 20.75 19.45
Share of total (percent)
U.S. shipments of IMTDCs imported from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 29.7 30.7 30.2 30.6 24.8
Nonsubject sources large-diameter 13.1 12.9 12.6 12.4 14.5
Nonsubject sources small-diameter 57.2 56.4 57.2 57.0 60.7
Nonsubject sources of all sizes 70.3 69.3 69.8 69.4 75.2
All sources all sizes 100.0 100.0 100.0 100.0 100.0
1 ***.
2 ***.
Note.--U.S. shipments of imports of small-diameter IMTDCs are included in the nonsubject sources small-
diameter aggregate as these imports from subject countries are out-of-scope and therefore not
considered subject imports.
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 152 of 218
IVͲ9
Negligibleimports
Thestatuterequiresthataninvestigationbeterminatedwithoutaninjury
determinationifimportsofthesubjectmerchandisearefoundtobenegligible. 6Negligible
importsaregenerallydefinedintheTariffActof1930,asamended,asimportsfromacountry
ofmerchandisecorrespondingtoadomesticlikeproductwheresuchimportsaccountforless
than3percentofthevolumeofallsuchmerchandiseimportedintotheUnitedStatesinthe
mostrecent12Ͳmonthperiodforwhichdataareavailablethatprecedesthefilingofthe
petitionortheinitiationoftheinvestigation.However,ifthereareimportsofsuchmerchandise
fromanumberofcountriessubjecttoinvestigationsinitiatedonthesamedaythatindividually
accountforlessthan3percentofthetotalvolumeofthesubjectmerchandise,andifthe
importsfromthosecountriescollectivelyaccountformorethan7percentofthevolumeofall
suchmerchandiseimportedintotheUnitedStatesduringtheapplicable12Ͳmonthperiod,then
importsfromsuchcountriesaredeemednottobenegligible. 7
TableIVͲ4presentsdataonU.S.importsofIMTDCsduringthe12Ͳmonthperiod
precedingthefilingofthepetitionsforwhichdataareavailable.Threeseparatesetsofimport
dataarepresentedforcomparisonpurposes:(1)Importdatacompiledfromofficialimport
statisticsfortheperiodOctober2014ͲSeptember2015,whicharevastlyoverstatedwiththe
inclusionofalargeamountofoutͲofͲscopemerchandise;(2)Importdatacompiledfrom
preliminaryphasequestionnairesfortheperiodOctober2014ͲSeptember2015,whichare
somewhatoverstatedbecausetheydonotreflectcertainscopeexclusionssubsequentlymade
byCommerce;and(3)Importdatacompiledfromfinalphasequestionnairesforcalendaryear
2015,whicharemorealignedwithCommerce’scurrentscopebutarenotfortheexacttime
periodimmediatelyprecedingthefilingofthepetitions.Thesedatashowthatreportedimports
fromCanadaandChinaindividuallyaccountedformorethan3percentoftotalimportsof
largeͲdiameterIMTDCsandcollectivelyaccountedformorethan7percentoftotalimportsof
largeͲdiameterIMTDCs.
6Sections703(a)(1),705(b)(1),733(a)(1),and735(b)(1)oftheAct(19U.S.C.§§1671b(a)(1),
1671d(b)(1),1673b(a)(1),and1673d(b)(1)).
7Section771(24)oftheAct(19U.S.C§1677(24)).
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IVͲ10
Table IV-4
IMTDCs: U.S. imports in the 12-month period immediately preceding the filing of the petitions,
October 2014 through September 2015
Item
October 2014 through September 2015 Calendar year 2015
Official import
statistics
Preliminary phase
questionnaire data
Final phase
questionnaire data
Value
(1,000
dollars)
Share of
value
(percent)
Value
(1,000
dollars)
Share of
value
(percent)
Value
(1,000
dollars)
Share of
value
(percent)
U.S. imports from--
Canada 123,849 16.3 *** *** *** ***
China 167,412 22.1 *** *** *** ***
Subtotal, subject sources 291,261 38.4 38,905 47.9 37,778 45.8
Nonsubject sources 467,016 61.6 42,320 52.1 44,693 54.2
All sources 758,277 100.0 81,225 100.0 82,471 100.0
Source: Compiled from data submitted in response to Commission questionnaires, and official U.S.
import statistics using HTS statistical reporting numbers 8483.50.6000, 8483.50.9040, and 8483.90.8080,
accessed September 10, 2016.
Cumulation
Inassessingwhetherimportsshouldbecumulated,theCommissiondetermines
whetherU.S.importsfromthesubjectcountriescompetewitheachotherandwiththe
domesticlikeproductandhasgenerallyconsideredfourfactors:(1)fungibility,(2)presenceof
salesorofferstosellinthesamegeographicalmarkets,(3)commonorsimilarchannelsof
distribution,and(4)simultaneouspresenceintheU.S.market.Certaininformationconcerning
thesefactorsispresentedinPartIIofthisreport.Informationconcerningfungibilityandsalesin
thegeographicalmarketsispresentedbelow.
DataconcerningU.S.importers’U.S.shipmentsofsmallͲandlargeͲdiameterIMTDCs
werepresentedpreviouslyintableIVͲ3.Thesedatashowthatduring2015,57.2percentofU.S.
importers’U.S.shipmentsweresmallͲdiameterIMTDCs,***percentwerelargeͲdiameter
ChineseIMTDCs(inͲscope),***percentwerelargeͲdiameterCanadianIMTDCs(inͲscope),and
12.6percentwerelargeͲdiameterIMTDCsfromnonsubjectcountries.U.S.producersprovided
productiondataconcerningsmallͲandlargeͲdiameterIMTDCs.Thesedatawerepresented
previouslyinPartIIIofthisreportintableIIIͲ11(finished)andtableIIIͲ12(unfinished).These
datashowthatduring2015,***percentofU.S.productionoffinishedIMTDCsand***percent
ofU.S.productionofunfinishedIMTDCswerelargeͲdiameterand***percentofU.S.
productionoffinishedIMTDCsand***percentofU.S.productionofunfinishedIMTDCswere
smallͲdiameter.
DataconcerningU.S.importers’U.S.shipmentsoffinishedandunfinishedIMTDCswere
presentedpreviouslyintableIVͲ3.Thesedatashowthatduring2015,***percentofU.S.
importers’U.S.shipmentswerefinishedIMTDCsand***percentwereunfinished.U.S.
producers’U.S.shipmentsofunfinishedandfinishedIMTDCswerepresentedpreviouslyinPart
IIIofthisreportintableIIIͲ14(finished)andtableIIIͲ15(unfinished).Thesedatashowthat
during2015,U.S.producers’U.S.shipmentsoffinishedIMTDCsamountedto***piecesand
U.S.producers’U.S.shipmentsofunfinishedIMTDCsthatwerenotfurtherfinished(internally
consumed)bytheirfirmintheUnitedStatesamountedto***pieces.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 154 of 218
IVͲ11
TableIVͲ5presentsofficialU.S.importstatisticsbyCustomsdistrictsofentry.These
dataarebasedonimportsenteringtheUnitedStatesunderthreebroadHTSstatistical
reportingnumbers(8483.50.6000,8483.50.9040,and8483.90.8080)thatincludeasubstantial
amountofmerchandisethatfallsoutsidethescopeoftheseinvestigations.Regardless,these
datashowthat,althoughasubstantialshareofimportsfromCanada,China,andother
countriesunderthesebroadcategoriesentertheUnitedStatesinCustomsdistrictslocatedin
Midweststates(e.g.,Illinois,Ohio,andMichigan),theseimportsalsoenterCustomsdistrictsin
Northeast,Mountains,Southeast,PacificCoast,andCentralSouthwestgeographicalareas(e.g.,
NewYork,Montana,Georgia,SouthCarolina,California,Louisiana,andTexas).
Table IV-5
IMTDCs: U.S. imports by customs districts of entry, 2015
Customs entry district Calendar year 2015
Value (1,000
dollars)
Share of value
(percent)
U.S. imports from Canada.--
Detroit, MI 107,828 89.1
Buffalo, NY 3,341 2.8
Great Falls, MT 2,990 2.5
Ogdensburg, NY 1,678 1.4
New Orleans, LA 1,546 1.3
All other districts 3,615 3.0
Total U.S. imports from Canada 120,998 100.0
U.S. imports from China.--
Chicago, IL 67,339 40.0
Cleveland, OH 22,116 13.1
Los Angeles, CA 13,928 8.3
Charleston, SC 13,131 7.8
Savannah, GA 8,970 5.3
All other districts 43,061 25.5
Total U.S. imports from China 168,545 100.0
U.S. imports from nonsubject sources.--
Chicago, IL 114,533 25.2
Cleveland, OH 39,510 8.7
New York, NY 37,976 8.4
Laredo, TX 31,197 6.9
New Orleans, LA 28,815 6.3
All other districts 201,753 44.5
Total U.S. imports from nonsubject sources 453,784 100.0
Source: Official U.S. import statistics using HTS statistical reporting numbers 8483.50.6000,
8483.50.9040, and 8483.90.8080, accessed September 10, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 155 of 218
IVͲ12
APPARENTU.S.CONSUMPTIONANDMARKETSHARES
ApparentU.S.consumption
TableIVͲ6andfigureIVͲ2presentcalculateddataonapparentU.S.consumptionof
IMTDCs.TheU.S.componentoftheconsumptioncalculationreflectsU.S.producers’U.S.
shipmentsoffinishedIMTDCsproducedfromunfinishedIMTDCscastintheUnitedStatesplus
U.S.producers’U.S.shipmentsofunfinishedIMTDCsproducedintheUnitedStatesnotalready
reportedasafinishedIMTDC.TheU.S.componentalsoincludesU.S.importers’U.S.shipments
offinishedIMTDCsthatwerecast/forgedintheUnitedStatesbutfinishedabroad(e.g.,in
Mexico).ThisquantitymeasureexcludesanyIMTDCsfinishedintheUnitedStatesfrom
importedunfinishedIMTDCs,asthosearereportedforthepurposesofapparentU.S.
consumptionasimports;asdiscussedabove,IMTDCsfinishedintheUnitedStatesfrom
importedunfinishedIMTDCswerenominal.
Table IV-6
IMTDCs: Apparent U.S. consumption, 2013-15, January to June 2015, and January to June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Quantity (pieces)
U.S. producers' U.S. shipments *** *** *** *** ***
U.S. importers' U.S. shipments from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 1,319,110 1,405,280 1,349,482 695,379 521,554
Nonsubject sources large-diameter 578,694 588,300 561,421 281,534 305,140
Nonsubject sources small-diameter 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258
Nonsubject sources of all sizes 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398
All sources all sizes 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952
Apparent U.S. consumption *** *** *** *** ***
Value (1,000 dollars)
U.S. producers' U.S. shipments *** *** *** *** ***
U.S. importers' U.S. shipments from.--
Canada large-diameter *** *** *** *** ***
China large-diameter *** *** *** *** ***
Subtotal, subject sources 42,171 44,129 40,231 21,036 15,612
Nonsubject sources large-diameter 28,290 27,518 26,430 13,170 13,191
Nonsubject sources small-diameter 33,645 39,695 25,623 12,964 12,107
Nonsubject sources of all sizes 61,934 67,213 52,053 26,135 25,298
All sources all sizes 104,105 111,342 92,284 47,170 40,910
Apparent U.S. consumption *** *** *** *** ***
Source: Compiled from data submitted in response to Commission questionnaires.
Figure IV-2
IMTDCs: Apparent U.S. consumption, 2013-15, January to June 2015, and January to June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 156 of 218
IVͲ13
ApparentU.S.consumption(intermsofquantityinpieces)increasedby***percent
from2013to2014,butdeclinedby***percentin2015.ApparentU.S.consumptionintermsof
pieceswas***percentlowerduringthefirsthalfof2016thaninthecomparableperiodof
2015.Similarly,apparentU.S.consumptionintermsofvalueincreasedby***percentfrom
2013to2014,butdeclinedby***percentin2015.ApparentU.S.consumptionintermsof
valuewas***percentlowerduringJanuaryͲJune2016ascomparedwithJanuaryͲJune2015.
U.S.marketshares
CalculatedU.S.marketsharedataforIMTDCsarepresentedintableIVͲ7.Onthebasis
ofquantity,thesedatashowthattheU.S.producers’***Ͳpercentmarketsharein2013
increasedby***percentagepointsin2014beforedroppingbackto***percentin2015.The
marketshareheldbyU.S.producersintermsofpiecesduringthefirsthalfof2016was***
percentagepointslessthanthatheldduringthefirsthalfof2015.Onthebasisofvalue,U.S.
producershelda***Ͳpercentmarketsharein2013Ͳ14,whichincreasedto***percentin2015.
ThemarketshareheldbyU.S.producersintermsofvalueduringthefirsthalfof2016(***
percent)was***percentagepointsmorethanthatheldduringthefirsthalfof2015.
Themarketshareheldbysubjectsourcesintermsofpiecesincreasedby***
percentagepointsfrom***percentin2013to***percentin2015.Themarketshareheldby
subjectsourcescombinedintermsofpieceswaslowerat***percentininthefirsthalfof2016
whencomparedto***percentinthefirsthalfof2015.Themarketshareheldbysubject
sourcesintermsofvaluefellfrom***percentin2013to***percentin2014beforeincreasing
to***percentin2015.Themarketshareheldbysubjectsourcescombinedintermsofvalue
waslowerat***percentinthefirsthalfof2016whencomparedto***percentinthefirsthalf
of2015.
Nonsubjectsourcesshowedanoveralldeclineinmarketshareduring2013Ͳ15,butthe
marketshareheldbynonsubjectsourcesduringthefirsthalfof2016washigherthanthat
reportedinthecomparableperiodof2015.
Table IV-7
IMTDCs: Market shares, 2013-15, January to June 2015, and January to June 2016
*******
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Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 158 of 218
VͲ1
PARTV: PRICINGDATA
FACTORSAFFECTINGPRICES
Rawmaterialandenergycosts
Forallofthe10reportingU.S.firmstogether,producingbothcastingsandfinished
IMTDCs,rawmaterialcostsasashareoftotalcostofgoodssold(“COGS”)increasedfrom***
percentin2013to***percentin2015.ForU.S.reportingfirmswithcastingandintegrated
castingandfinishingoperations,thatratioincreasedfrom***percentin2013to***percent
in2015,whileforU.S.firmswithfinishingoperationsonly,theratiodeclinedfrom***percent
in2013to***percentin2015.
Pigiron,scrapiron,andferrousscrapmetalaretheprincipalrawmaterialsusedin
production. 1PigironandferrousscrappricesareshowninfigureVͲ1.Electricityandnaturalgas
arealsocosts, 2andtheirpricesareprovidedinfigureVͲ2.
Figure V-1
Raw materials: Prices of imported pig iron and of ferrous scrap, January 2013-September 2016
* * * * * * *
1Petition,p.9.
2Conferencetranscript,p.104(Christenson),and***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 159 of 218
VͲ2
Figure V-2
Energy prices: Prices of industrial electricity and natural gas, January 2013-August 2016
Source: Energy Information Administration and staff calculations.
Source: Energy Information Administration and staff calculations.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 160 of 218
VͲ3
Overall,pigironandscrappriceswerestablein2013andinto2014,fellinlate2014and
2015,andthenincreasedsomewhatin2016.Naturalgaspriceswerestableduringmostof
2013,increasedsharplyinlate2013andearly2014,andthendeclinedthroughJune2016
beforeincreasingslightlyinJulyandAugust2016.Electricitypricesweregenerallystablewith
seasonalfluctuations.
U.S.producersgenerallyreportedthatrawmaterialpriceshaddecreasedorhad
fluctuatedsinceJanuary2013. 3***reportedthatrawmaterialpricesgenerallyincreasedfrom
2013to2014,decreasedsomewhatin2015,andthenbegantoincreaseinthefirsthalfof
2016.
TransportationcoststotheU.S.market
In2015,transportationcoststotheU.S.marketwere0.7percentforIMTDCsfrom
Canada,6.4percentforIMTDCsfromChina,and0.9percentforIMTDCsfromMexico.4
U.S.inlandtransportationcosts
Sixof11U.S.producersand13of21importerstypicallyarrangetransportationtotheir
customers,while5producersand9importersreportedthattheirpurchaserstypicallyarrange
transportation.U.S.producersandimportersgenerallyreportedU.S.inlandtransportation
costsof1to5percentofthetotaldeliveredcostofIMTDCs.
PRICINGPRACTICES
Pricingmethods
U.S.producersandimportersreportedusingtransactionͲbyͲtransactionnegotiations,
contracts,andpricelists(tableVͲ1).TBWandBaldordescribedsellingIMTDCsbycatalogueas
wellasthroughcustomorders.TBWaddedthatcustomordersofteninvolvesmallervolumes
withlowerprofitmargins5andaneconomicconsultantforBaldorstatedthatbothfirmssell
moreproductsfromtheircataloguesthanfromcustomorders.6***reportedthatitspricesto
OEMsaresettransactionbytransactionwhereasitspricestodistributorsaresetbypricelists.
***reportedthateachofitsdistributioncustomershasadifferentmultiplieraddedtothelist
pricetodeterminetheactualsellingprice.ItalsostatedthatitspricingtoendusersandOEMs
3Fiveproducersreportedthatrawmaterialpricesdecreased,fourreportedthattheyfluctuated,one
reportednochange,andonereportedthattheyincreased.
4Transportationcostsweredeterminedbycomparingthec.i.f.valueofimportstotheCustomsvalue
ofimportsforHTScodes8483.50.6000,8483.50.9040,and8483.90.8080.
5Conferencetranscript,pp.21and69(McCartney),andp.100(Crist).
6Conferencetranscript,p.69(Beck).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 161 of 218
VͲ4
ismorecompetitivethanpricingtodistributors,andthat***.7Somesuppliersalsooffer
multiplebrandsofIMTDCsthataresoldatdifferentpricepoints. 8
Table V-1
IMTDCs: U.S. producers and importers reported price setting methods, by number of responding
firms 1
Method U.S. producers U.S. importers
Transaction-by-transaction 8 10
Contract 3 7
Set price list 4 16
Other 2 2
Total responding firms 11 21
1 The sum of responses in each column may not add up to the total number of responding firms, as each
firm was instructed to check all applicable price setting methods employed.
Note.—***.
Source: Compiled from data submitted in response to Commission questionnaires.
Atthehearing,TBWstatedthatinthepastOEMsalmostalwayspurchasedthelowestͲ
pricedproductwhereasdistributorsconsideredfactorssuchasquality,brand,andavailability
butthatthesefactorshavebecomelessimportanttodistributors. 9Italsostatedthatthe
IMTDCindustryusedtohavestandardizedpricingwithlistanddiscountstructuresparticularly
inthedistributionchannel,butthatpricingnowmorecommonlyoccursthroughtransaction
basednegotiations. 10
Eightofthe11respondingproducersand12of18respondingimportersreported
sellingmainlyonaspotorshortͲtermcontractbasis.***soldexclusivelyonaspotbasisin
2015,while***wereonanannualorlongͲtermcontractbasis.Importers***alsosoldmostly
onanannualorlongͲtermcontractbasis.
LongͲtermcontractlengthrangedfromoneyear***totwoyears***anduptothree
ormoreyears(***).U.S.producers’andimporters’annualandlongͲtermcontractstypically
allowedpricerenegotiationduringthecontract,butdidnothavemeetͲorͲreleaseprovisions.
Thirteenof24purchasersreportedthattheypurchaseIMTDCsdaily,8weekly,and2
monthly.Mostpurchasers(20of24)reportednochangeintheirpurchasingfrequencysince
2013.Mostpurchasersreportedcontacting1to5suppliersbeforemakingapurchase.
7***.
8Forexample,BaldorsellsIMTDCsundertheMaskaandDodgebrandsandRegalBeloitsellsIMTDCs
undertheBrowningandLeesonbrands.***.Emailsfrom***andpurchaserquestionnaireresponses.
9Hearingtranscript,p.19(Crist).
10Hearingtranscript,pp.86Ͳ87(Christenson).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 162 of 218
VͲ5
Salestermsanddiscounts
U.S.producersandamajorityofimporterstypicallyquotepricesonanf.o.b.basis,but
oneͲthirdofrespondingimportersalsoquotepricesonadeliveredbasis.
Fiveofthe11respondingU.S.producersofferquantitydiscounts,and3ofthese
producersalsooffertotalvolumeand/orotherdiscounts.Theothersixproducersreported
havingnodiscountpolicy.Mostrespondingimportersreportedofferingquantity,totalvolume,
orotherdiscounts.Mostproducersandimportersalsoreportedsalestermsofnet30days.
Priceleadership
Seventeenof24purchaserslistedoneormorepriceleaders.Thefirmsmostfrequently
reportedtobepriceleaderswereBaldor(listedby10purchasers),TBW(listedby8
purchasers),andRegalBeloit(listedby5purchasers).Onepurchaserstatedthatthemajor
manufacturerswerefirsttoannouncepriceincreases.SeveralfirmslistingBaldor(including
specifyingBaldor’sDodgebrandandMaskabrand)statedthatBaldorofferedgoodqualityata
reasonableprice,onestatedthatitwasanindustryleaderandprimarybrandforIMTDCs,and
onepurchaserstatedthatBaldor’sMaskabrandwasaleaderin"down"pricing.Firmslisting
TBWnotedthatithadnotincreasedpriceinthelast3years,offeredgoodvalue(qualityand
cost),andthatitmaintainedpricesandresistedpricedecreases.Onepurchaserstatedthat
RegalBeloit(Browningbrand)wasthehighestpricedsupplier.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 163 of 218
VͲ6
PRICEDATA
TheCommissionrequestedU.S.producersandimporterstoprovidequarterlydatafor
thetotalquantityandf.o.b.valueofthefollowingIMTDCproducts 11shippedtounrelatedU.S.
distributorsandendusers/OEMsduringJanuary2013ͲJune2016.
Product1.ͲͲNarrow"3V"groovesheave,witha6.0Ͳinchoutsidediameterandthreegrooves,
suitableforusewithTypeSDSbushing
Product2.ͲͲNarrow"5V"groovesheave,witha23.6Ͳinchoutsidediameterandeightgrooves,
suitableforusewithTypeJbushing
Product3.ͲͲNarrow"5V"groovesheave,witha50Ͳinchoutsidediameterandsixgrooves,
suitableforusewithTypeMbushing
Product4.ͲͲNarrow"5V"groovesheave,witha50Ͳinchoutsidediameterandeightgrooves,
suitableforusewithTypeMbushing
Product5.ͲͲTypeEbushing,with3Ͳ3/8Ͳinchbore
Product6.ͲͲTypeFbushing,with3Ͳ3/8Ͳinchbore
FourU.S.producers12and11importers13providedusablepricingdataforsalesofthe
requestedproducts,althoughnotallfirmsreportedpricingforallproductsforallquarters.14
Pricingdatareportedbythesefirmsaccountedforapproximately0.6percentofU.S.producers’
shipmentsofIMTDCs(smallͲandlargeͲdiameter),1.7percentofU.S.shipmentsofsubject
importsfromCanadaand0.9percentofU.S.shipmentsofsubjectimportsfromChinain
2015. 15
Pricedataforproducts1Ͳ6arepresentedintablesVͲ2toVͲ7andfiguresVͲ3toVͲ8.
NonsubjectcountrypricesarepresentedinAppendixD.
11ThepricingproductsaredifferentfromthoseinthepreliminaryͲphaseinvestigationsandinclude
bushings,whichwerenotamongthepricingitemsinthepreliminaryphase,aswellassheaves.Basedon
informationprovidedbythepetitionerincommentsonthedraftquestionnaires,staffselectedthefive
largestvolumeproductsforTBWandMartinSprocket,aswellasasixthproduct(product1)***.
12U.S.producersreportingdatawere***.
13ElevenimportersreporteddataforChina,one(***)reporteddataforCanada,andtwo(***)
reporteddataforMexico.
14PerͲunitpricingdataarecalculatedfromtotalquantityandtotalvaluedataprovidedbyU.S.
producersandimporters.Theprecisionandvariationofthesefiguresmaybeaffectedbyrounding,
limitedquantities,andproducerorimporterestimates.
15PetitionernotedthatsincetherearemanyIMTDCspecifications,itssuggestedpricingproducts
accountforasmallshareoftotalIMTDCsales.ItstatedthatTBW’sandotherproducers’catalogueslist
thousandsofdifferentpartnumbers.TBW’sCommentsonDraftQuestionnaires,pp.5Ͳ6.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 164 of 218
VͲ7
Table V-2
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Table V-3
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Table V-4
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Table V-5
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Table V-6
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 5 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Table V-7
IMTDCs: Weighted-average f.o.b. prices and quantities of domestic and imported product 6 and
margins of underselling/(overselling), by quarters, January 2013-June 2016
* * * * * * *
Figure V-3a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 165 of 218
VͲ8
Figure V-3b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure V-4a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure V-4b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure V-5a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure V-5b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure V-6a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure V-6b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 166 of 218
VͲ9
Figure V-7a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure V-7b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure V-8a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure V-8b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Someofthepricingdatasubmittedbyfirmsshowedlargevariations.Severalfirms
explainedthattheirpricescanvarysubstantiallydependingonfactorsincludingthebrand,the
customer,theapplication,andtheleadtime.16Becauseofsuchvariationsforanindividual
supplieraswellasamongsuppliers,pricesshowninthetablescanvarywidelyforsome
productsandsomequarters.
Pricetrends
PricesfluctuatedduringJanuary2013ͲJune2016,anddidnotshowacleartrend.Table
VͲ8summarizesthepricetrends,bycountryandbyproduct.Asshowninthetable,fiveofthe
priceseriesfordomesticproductshowedoverallincreasesandsixshowedoveralldecreases.
PricedataforCanadaalsoshowedmixedtrends,whilepricedataforChinashowedoverall
increases.
16***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 167 of 218
VͲ10
Table V-8
IMTDCs: Summary of weighted-average f.o.b. prices for products 1-6 from the United States,
Canada, and China
* * * * * * *
Pricecomparisons
AsshownintableVͲ9,pricesforIMTDCsimportedfromsubjectcountrieswerebelow
thoseforU.S.Ͳproducedproductin217of228instances(36,831pieces);marginsof
undersellingrangedfrom0.1to84.8percent.Intheremaining11instances(253pieces),prices
forIMTDCsimportedfromsubjectcountrieswere0.8to57.9percentabovepricesforthe
domesticproduct.The11instancesofoversellingwereallforChineseproduct,andmostlyin
product3,arelativelyhighͲvaluelowͲvolumeproduct.
Table V-9
IMTDCs: Instances of underselling/overselling and the range and average of margins, by country,
January 2013-June 2016
Source
Underselling
Number of
quarters
Quantity
1
(pieces)
Average
margin
(percent)
Margin range
(percent)
Min Max
Canada 84 21,999 33.8 8.4 63.3
China 133 14,832 39.6 0.1 84.8
Total, underselling 217 36,831 37.4 0.1 84.8
Source
(Overselling)
Number of
quarters
Quantity1
(pieces)
Average
margin
(percent)
Margin range
(percent)
Min Max
Canada 0 0 --- --- ---
China 11 253 (15.6) (0.8) (57.9)
Total, overselling 11 253 (15.6) (0.8) (57.9)
1 These data include only quarters in which there is a comparison between the U.S. and subject product.
Source: Compiled from data submitted in response to Commission questionnaires.
Forsalestodistributors,subjectimportpriceswerebelowthoseforU.S.Ͳproduced
productin120of126instances(22,331pieces,marginsof0.1to81.2percent);andabove
thosefordomesticproductin6instances(199pieces,marginsof0.8to24.7percent).Forsales
toendusers,subjectimportpriceswerebelowthoseforU.S.Ͳproducedproductin97of102
instances(14,500pieces,marginsof8.4to84.8percent);andabovethosefordomesticproduct
in5instances(54pieces,marginsof2.6to57.9percent).
Forsheaves(products1Ͳ4),subjectimportpriceswerebelowthoseforU.S.Ͳproduced
productin105of116instances(12,336pieces,marginsof0.1to84.8percent);andabove
thosefordomesticproductin11instances(253pieces,marginsof0.8to57.9percent).For
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 168 of 218
VͲ11
bushings(products5Ͳ6),subjectimportpriceswerebelowthoseforU.S.Ͳproducedproductin
all112instances(24,465pieces,marginsof8.4to52.5percent).
LOSTSALESANDLOSTREVENUE
Inthefinalphaseoftheinvestigations,8ofthe11respondingU.S.producersreported
thattheyhadtoreduceprices,3reportedtheyhadtorollbackannouncedpriceincreases,and
8reportedthattheyhadlostsales. 17AsnotedinPartII,theCommissionreceivedpurchaser
questionnaireresponsesfrom24purchasers.18Respondingpurchasersreportedpurchasing$93
millionofIMTDCs,ofwhich$62millionwerelargeͲdiameterIMTDCs,during2015(tableVͲ10).
Asnotedinthetable,somepurchasershaddifficultyinprovidingdataontheirIMTDC
purchasesfortotalIMTDCpurchases,orbylargeͲandsmallͲdiameterIMTDCs,and/orby
countryoforigin. 19
Table V-10
Large-diameter IMTDCs: Purchasers’ responses to purchasing patterns
* * * * * * *
Ofthe23respondingpurchasers,13reportedthattheyhadpurchasedsubjectimports
insteadofIMTDCsfromU.S.producerssince2013,with13reportingpurchasingimportsfrom
Canadaand10reportingpurchasingimportsfromChina(tableVͲ11). 20Elevenofthe13
purchasersthatreportedpurchasingsubjectimportsinsteadofdomesticproductreportedthat
subjectimportswerepricedlowerthandomesticproduct.21
Table V-11
Large-diameter IMTDCs: Purchasers’ responses to shifting supply sources
* * * * * * *
17Threeproducersreportedthattheydidnotreduceprices;sevenreportedthattheydidnotroll
backannouncedpriceincreases;and2reportedthathadnotlostsales.
18Twopurchasers(***)submittedlostsaleslostrevenuesurveyresponsesinthepreliminaryphase,
andoneofthesefirms(***)submittedapurchaserquestionnaireresponseinthefinalphase.
19FirmswereinstructedtoreportcountryoforiginoffinishedIMTDCsbasedonthelocationwhere
theIMTDCwascast/forged.
20Onepurchaser(***)didnotprovidearesponsetothisquestion.
21TenfirmsreportedthattheCanadianproductwaspricedlowerthandomesticproductand9firms
reportedthattheChineseproductwaspricedlowerthandomesticproduct.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 169 of 218
VͲ12
Sixofthese13purchasersreportedthatpricewasthereasonforpurchasingsubject
imports. 22Onlyonefirmprovidedanestimateofthequantityshiftedtosubjectimports;***
reportingshifting***piecestoCanadaand***toChina.Otheridentifiedreasonsforshifting
fromU.S.producerswerecustomerdemandandavailability.
Ofthe24respondingpurchasers,4reportedthatU.S.producershadreducedpricesin
ordertocompetewithlowerͲpricedimportsfromCanadaandChina(tableVͲ12;14reported
thattheydidnotknow).Thereportedestimatedpricereductionrangedfrom4to30percent.
Twofirmsreported4and9percentrespectivelyforbothCanadaandChina,andonereported
30percentforCanada.Indescribingthepricereductions,purchasersnotedincreaseddiscounts
frompricelists,thatTBWheldpricessteady,andthatTBWandMartinSprocketloweredtheir
pricestocompetewithBaldor’slowͲpricedMaskabrandsheavesfromCanada.
Table V-12
Large-diameter IMTDCs: Purchasers’ responses to U.S. producer price reductions
* * * * * * *
22SixpurchasersreportedthatpricewasaprimaryreasonforCanada,and5reportedthatitwasa
primaryreasonforChina.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 170 of 218
VIͲ1
PARTVI: FINANCIALEXPERIENCEOFU.S.PRODUCERS
BACKGROUND
TenU.S.producersprovideduseablefinancialdata.Theseincludefiveintegratedfirms
thatproducecastingsandperformfinishingoperationsontheirowncastings 1andfivefirms
thatperformfinishingoperationsonpurchasedcastings. 2Differencesbetweenthetradeand
financialsectionsoftheCommission’squestionnaireare***.Asexplainedbelow,thedatain
thissectionofthereportareforthesalesandcostsofsmallͲandlargeͲdiameter,finishedand
unfinishedIMTDCs. 3
OPERATIONSONIMTDCS
Thepresentationofdataisorganizedasfollows: 4
x TableVIͲ1presentsaggregateddataontheintegrated(fivefirmsreporting
integratedcastingandfinishing)andstandͲalonefinishing(fivefirmsreporting
finishingoperationsonly)operationsofthereportingU.S.producers’operations
inrelationtoIMTDCsandtableVIͲ2providesacalculationofchangesinthe
averageunitvaluesforselectedfinancialelementspresentedintableVIͲ1.
x TableVIͲ3presentsprofitͲandͲlossdataofU.S.producerswithintegratedcasting
andfinishingoperations, 5andtableVIͲ4(liketableVIͲ2)providesacalculationof
changesintheaverageunitvaluesofselectedfinancialelements.
x TableVIͲ5providesprofitͲandͲlossdataofthefivereportingfirms(***)with
finishingoperationsonly.6TableVIͲ6providesacalculationofchangesinthe
averageunitvaluesofselectedfinancialelementsfortableVIͲ5.
1Therewerefivereportingfirmsthatareintegratedproducers,i.e.,castandfinishthefirm’sown
castings(althoughtheirfinishingoperationsmaybesupplementedbypurchasesofcastings):Bremen
(***);EnDyn(***);Goldens’Foundry(***);MartinSprocket(***);andTBW(***).***.***.
2Therewerefivereportingfirmsthatarefinishersonly,thatdonothavecastingcapabilityandrely
onpurchasesofcastblanks:B&B(***);Baldor(***);HiͲLo(***);Maurey(***);andSterling(***).A
sixthfirm,***.
3TherespondingfirmsgenerallyproduceproductsotherthanIMTDCsintheirfacilities,hencethe
datarepresentallocations.Generallyspeaking,thepercentageofsalesvalueaccountedforbyIMTDCs
rangesfrom***.SeeU.S.producers’questionnaireresponses,sectionIIIͲ5.
4Datapresentedheredifferfromthoseintheprehearingstaffreport:asdiscussedinsectionIIIof
thereport,thedatafor***.ThedataforWaupacaseparatelyareprovidedinappendixC.
5***.FirmͲbyͲfirmdataontheirintegratedoperationsarepresentedinappendixE,tableEͲ1.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 171 of 218
VIͲ2
Table VI-1
IMTDCs: Results of operations of U.S. producers, all firms, fiscal years 2013-15, January-June
2015, and January-June 2016
*******
Table VI-2
IMTDCs: Changes in average unit values for all firms, between fiscal years 2013-15, and between
January-June 2015 and January-June 2016
*******
Table VI-3
IMTDCs: Results of operations of U.S. producers with integrated casting and finishing operations,
fiscal years 2013-15, January-June 2015, and January-June 2016
*******
Table VI-4
IMTDCs: Changes in average unit values for U.S. producers with integrated casting and finishing
operations, between fiscal years 2013-15, and between January-June 2015 and January-June 2016
*******
Table VI-5
IMTDCs: Results of operations of U.S. producers with finishing operations only, fiscal years 2013-
15, January-June 2015, and January-June 2016
*******
Table VI-6
IMTDCs: Changes in average unit values for U.S. producers with finishing operations only,
between fiscal years 2013-15, and between January-June 2015 and January-June 2016
*******
(…continued)
6Thesedataareforfirmswithfinishingoperationsonly,i.e.,thefirmspurchasecastingsfromwhich
theyproducefinishedproduct.Includedinthesedataare***.FirmͲbyͲfirmdataontheirfinishing
operationsarepresentedinappendixE,tableEͲ2.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 172 of 218
VIͲ3
Netsales
BasedonthedataintablesVIͲ1(allfirms),totalnetsalesbyquantityandvalue
increasedirregularlyfrom2013to2015andwerelowerinJanuaryͲJune2016(“interim2016”)
thaninJanuaryͲJune2015(“interim2015”).Theaverageunitvalueofsalesforallreporting
firmsincreasedfrom2013to2015andwas***higherininterim2016.SalesbyU.S.integrated
firms(tableVIͲ3)declinedbyquantitybutincreased***from2013to2015andwerelowerin
interim2016comparedwithinterim2015.SalesbyU.S.finishers(tableVIͲ5)increased
irregularlyfrom2013to2015butwerelowerininterim2016comparedtointerim2015.
BasedonthedataintableEͲ1(integratedcastingandfinishingoperations),***
reportedlowersalesbetween2013and2015;the***.Theaverageunitvalueofsales
increasedirregularlyfrom2013to2015andwas***higherininterim2016thanintheperiod
oneyearearlier(tablesVIͲ3andEͲ1).Thischangealsowasledbythedatareportedby***.
BasedonthedataintablesVIͲ5andEͲ2,salesbyfinishersincreasedfrom2013to2015,
accountedforbythedataof***.Theaverageunitvalueofsalesofthefinishersdeclinedfrom
2013to2015butwashigherininterim2016thanininterim2015.
Costsandexpenses
BasedonthedataintableVIͲ1,totalCOGSirregularlyincreasedfrom2013to2015and
waslowerininterim2016comparedtotheperiodoneyearearlier.TheratiooftotalCOGSto
totalnetsalesrose***by***percentagepointsovertheannualperiodsbutwas***
percentagepointslowerininterim2016comparedwithinterim2015.Theaverageunitvalueof
totalCOGSfollowedthatsametrends.ChangesintotalCOGS,theratiooftotalCOGStonet
sales,andtheaverageunitvalueoftotalCOGSintablesVIͲ3andVIͲ5aresimilartothosein
tableVIͲ1.ChangesintotalCOGSweregenerallyduetothedataof***(tableEͲ1).Among
finisherfirmsthedataof***accountedformuchoftheincreaseintotalCOGSbetweenthe
yearlyperiods(tableEͲ2).Changesinrawmaterialcostsgenerallyledtothechangesintotal
COGS.Rawmaterials,asinputstotheproductionofcastingsoraspurchasedblanks,accounted
forapproximately***percentoftotalCOGSand***percentoftotalnetsalesduringthe
periodsforwhichdataweregathered.ThevalueofSG&Aexpensesincreasedduring2013Ͳ15
butwaslowerininterim2016comparedtointerim2015.TheratioofSG&Aexpensestototal
netsalesandperͲunitvaluesincreasedbetweentheannualperiodsandwerehigherininterim
2016.
Profitability
BasedonthedataintableVIͲ1,operatingincomeandnetincomeofallfirmstogether
fellfrom2013toalossin2015,butthetwoindicatorswerehigherininterim2016thanin
interim2015;changesinthesemeasureswerelowerwhenexpressedasaratiotototalnet
salesandonaperͲunitbasisfollowedthetrendsinvalue.Twofirms,***,accountedfor***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 173 of 218
VIͲ4
Varianceanalysis
AvarianceanalysisfortheoperationsofallU.S.producersofIMTDCsispresentedin
tableVIͲ7thatcorrespondstothedataintableVIͲ1. 7Avarianceanalysisisamethodtoassess
thechangesinprofitabilityfromperiodtoperiodbymeasuringtheimpactofchangesinthe
relationshipsbetweenprice,cost,andvolume.Acalculationismadeoftheimpactofeach
factorbyvaryingonlythatfactorwhileholdingallotherfactorsconstant.Thecomponentsof
netsalesvariancesareeitherfavorable(positive),resultinginanincreaseinnetsalesand
profitabilityorunfavorable(negative)resultingintheopposite.
Table VI-7
IMTDCs; Variance analysis for U.S. producers, all firms, fiscal years 2013-15, January-June 2015,
and January-June 2016
*******
TheanalysisintableVIͲ7indicatesthattheindustry’soperatingincomeandnetincome
declinedbetween2013and2015becauseunfavorableoperatingcostsvariances(unitcosts
increased)weregreaterthanfavorablepricevariances(unitsalesvaluesincreased).The
industry’soperatingandnetincomeincreasedbetweentheinterimperiodsbecausethe
favorablepricevariancewasgreaterthantheunfavorablenetcost/expensevariance.The
analysisalsoindicatesthatthemixoffavorableandunfavorablevarianceschangedbetween
periods—boththepricevarianceandnetcost/expensevarianceswereunfavorablebetween
2013and2014andcausedadeclineinoperatingincomewhileonlythepricevariancewas
unfavorablebutwasgreaterthanthefavorablenetcost/expensevarianceandcausedadecline
innetincomebetweenthosetwoyears.Althoughnotshown,avarianceanalysisforthe
integratedfirms(correspondingtothedataintableVIͲ3)andforthefirmswithfinishing
operationsonly(correspondingtothedataintableVIͲ5)issimilartothatpresentedhere.
7TheCommission’svarianceanalysisiscalculatedinthreeparts:Salesvariance,costofsales
variance(COGSvariance),andSG&Aexpensevariance.Eachpartconsistsofapricevariance(inthecase
ofthesalesvariance)oracostorexpensevariance(inthecaseoftheCOGSandSG&Aexpense
variance),andavolumevariance.Thesalesorcost/expensevarianceiscalculatedasthechangeinunit
priceorperͲunitcost/expensetimesthenewvolume,whilethevolumevarianceiscalculatedasthe
changeinvolumetimestheoldunitpriceorperͲunitcost/expense.Summarizedatthebottomofeach
table,thepricevarianceisfromsales,thecost/expensevarianceisthesumofthoseitemsfromCOGS
andSG&Avariances,respectively,andthevolumevarianceisthesumofthevolumecomponentsofthe
netsales,COGS,andSG&Aexpensevariances.Theoverallvolumecomponentofthevarianceanalysisis
generallysmall.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 174 of 218
VIͲ5
CAPITALEXPENDITURESANDRESEARCHANDDEVELOPMENTEXPENSES
TableVIͲ8presentscapitalexpendituresandresearchanddevelopment(“R&D”)
expensesbyfirm.
Table VI-8
IMTDCs: Capital expenditures and R&D expenses of U.S. producers, by firm, fiscal years 2013-15,
January-June 2015, and January-June 2016
*******
Capitalexpenditures,whichareincludedinafirm’sstatementofcashflowswithinthe
section,“cashflowsfrominvestingactivities,”increasethevalueofspecificplantand
equipmentandtotalassets,whilechargesfordepreciationandamortization,impairments,and
divestitures,retirementorabandonmentofpropertydecreasethevalueofassets.Capital
expendituresaremadeandR&Dexpensesareincurredtoachieveimprovementsinequipment
orreduceoperatingcostsandthequalityofproductsproduced.Totalcapitalexpendituresfell
from2013to2015butweregreaterininterim2016thanininterim2015.
Firms’commentsaboutthenature,focus,andsignificanceoftheircapitalexpenditures
andtheirR&DexpensesareshowninintableVIͲ9.
Table VI-9
IMTDCS: Narrative responses by U.S. producers on their capital expenditures and R&D expenses
*******
ASSETSANDRETURNONINVESTMENT
TablesVIͲ10andVIͲ11presentdataontheU.S.producers’totalassetsandtheirreturn
oninvestment(“ROI”)forfirmswithcastingoperationsandfinishingoperations,respectively.
Table VI-10
IMTDCs: Total assets and ratio of operating income to assets for U.S. producers with integrated
casting and finishing operations, fiscal years 2013-15
*******
Table VI-11
IMTDCs: Total assets and ratio of operating income to assets for U.S. producers with finishing
operations only, fiscal years 2013-15
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 175 of 218
VIͲ6
ThedataforoperatingincomearefromtableVIͲ3,andtheratiotototalnetassets
followedthetableVIͲ3data.Itfellsteadilyfrom2013to2015.Theassetturnoverratioisthe
ratiooftotalnetsalestototalnetassetsandisameasureofefficiencybecauseitprovidesan
indicationofhowefficiently$1ofassetsgenerates$1ofsales.IntableVIͲ10,onaverage$1of
assetsgeneratedapproximately$***ofsalesin2015forintegratedU.S.producers.
ThedataforoperatingincomearefromtableVIͲ5,andtheratiotototalnetassetsfell
from2013to2015,partlybecausethetotalvalueofassetsincreased.Theassetturnoverratio
istheratiooftotalnetsalestototalnetassetsandistermedameasureofefficiencybecauseit
providesanindicationofhowefficiently$1ofassetsgenerates$1ofsales.IntableVIͲ11,$1of
assetsgeneratedapproximately$***ofsalesin2015forU.S.producerswithfinishing
operationsonly.
CAPITALANDINVESTMENT
TheCommissionrequestedU.S.producersofIMTDCstodescribeanyactualorpotential
negativeeffectsofimportsofIMTDCsfromChinaorCanadaontheirfirms’growth,investment,
abilitytoraisecapital,developmentandproductionefforts,orthescaleofcapitalinvestments.
AppendixFpresentsU.S.producers’responses.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 176 of 218
VIIͲ1
PARTVII: THREATCONSIDERATIONSANDINFORMATIONON
NONSUBJECTCOUNTRIES
Section771(7)(F)(i)oftheAct(19U.S.C.§1677(7)(F)(i))providesthat—
IndeterminingwhetheranindustryintheUnitedStatesisthreatened
withmaterialinjurybyreasonofimports(orsalesforimportation)ofthe
subjectmerchandise,theCommissionshallconsider,amongother
relevanteconomicfactors 1ͲͲ
(I) ifacountervailablesubsidyisinvolved,suchinformationasmay
bepresentedtoitbytheadministeringauthorityastothenature
ofthesubsidy(particularlyastowhetherthecountervailable
subsidyisasubsidydescribedinArticle3or6.1oftheSubsidies
Agreement),andwhetherimportsofthesubjectmerchandiseare
likelytoincrease,
(II) anyexistingunusedproductioncapacityorimminent,substantial
increaseinproductioncapacityintheexportingcountryindicating
thelikelihoodofsubstantiallyincreasedimportsofthesubject
merchandiseintotheUnitedStates,takingintoaccountthe
availabilityofotherexportmarketstoabsorbanyadditional
exports,
(III) asignificantrateofincreaseofthevolumeormarketpenetration
ofimportsofthesubjectmerchandiseindicatingthelikelihoodof
substantiallyincreasedimports,
(IV)whetherimportsofthesubjectmerchandiseareenteringatprices
thatarelikelytohaveasignificantdepressingorsuppressing
effectondomesticprices,andarelikelytoincreasedemandfor
furtherimports,
(V) inventoriesofthesubjectmerchandise,
1Section771(7)(F)(ii)oftheAct(19U.S.C.§1677(7)(F)(ii))providesthat“TheCommissionshall
consider{thesefactors}...asawholeinmakingadeterminationofwhetherfurtherdumpedor
subsidizedimportsareimminentandwhethermaterialinjurybyreasonofimportswouldoccurunless
anorderisissuedorasuspensionagreementisacceptedunderthistitle.Thepresenceorabsenceof
anyfactorwhichtheCommissionisrequiredtoconsider...shallnotnecessarilygivedecisiveguidance
withrespecttothedetermination.Suchadeterminationmaynotbemadeonthebasisofmere
conjectureorsupposition.”
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 177 of 218
VIIͲ2
(VI)thepotentialforproductͲshiftingifproductionfacilitiesinthe
foreigncountry,whichcanbeusedtoproducethesubject
merchandise,arecurrentlybeingusedtoproduceotherproducts,
(VII) inanyinvestigationunderthistitlewhichinvolvesimportsofboth
arawagriculturalproduct(withinthemeaningofparagraph
(4)(E)(iv))andanyproductprocessedfromsuchrawagricultural
product,thelikelihoodthattherewillbeincreasedimports,by
reasonofproductshifting,ifthereisanaffirmativedetermination
bytheCommissionundersection705(b)(1)or735(b)(1)with
respecttoeithertherawagriculturalproductortheprocessed
agriculturalproduct(butnotboth),
(VIII) theactualandpotentialnegativeeffectsontheexisting
developmentandproductioneffortsofthedomesticindustry,
includingeffortstodevelopaderivativeormoreadvancedversion
ofthedomesticlikeproduct,and
(IX) anyotherdemonstrableadversetrendsthatindicatethe
probabilitythatthereislikelytobematerialinjurybyreasonof
imports(orsaleforimportation)ofthesubjectmerchandise
(whetherornotitisactuallybeingimportedatthetime).2
Informationonthenatureofthesubsidieswaspresentedearlierinthisreport;
informationonthevolumeandpricingofimportsofthesubjectmerchandiseispresentedin
PartsIVandV;andinformationontheeffectsofimportsofthesubjectmerchandiseonU.S.
producers’existingdevelopmentandproductioneffortsispresentedinPartVI.Informationon
inventoriesofthesubjectmerchandise;foreignproducers’operations,includingthepotential
for“productͲshifting;”anyotherthreatindicators,ifapplicable;andanydumpinginthirdͲ
countrymarkets,follows.Alsopresentedinthissectionofthereportisinformationobtained
forconsiderationbytheCommissiononnonsubjectcountries.
2Section771(7)(F)(iii)oftheAct(19U.S.C.§1677(7)(F)(iii))furtherprovidesthat,inantidumping
investigations,“...theCommissionshallconsiderwhetherdumpinginthemarketsofforeigncountries
(asevidencedbydumpingfindingsorantidumpingremediesinotherWTOmembermarketsagainstthe
sameclassorkindofmerchandisemanufacturedorexportedbythesamepartyasunderinvestigation)
suggestsathreatofmaterialinjurytothedomesticindustry.”
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 178 of 218
VIIͲ3
THEINDUSTRYINCANADA
Overview
Initsopinioninthepreliminaryphaseoftheseinvestigations,theCommissioninvited
thepartiesinanyfinalphaseoftheseinvestigations,toidentify“foundriesandanyotherfirms
thatmaybeproducingunfinishedorfinishedIMTDCsinCanada.” 3Intheircommentsonthe
draftquestionnaires,nopartyidentifiedanyadditionalfirmsthatmightbeproducing
unfinishedorfinishedIMTDCsinCanada.Inthefinalphaseoftheseinvestigations,the
Commissionissuedforeignproducers’orexporters’questionnairestotwentyͲthreefirms,
includingninefirmsidentifiedinthepetitions,believedtoproduceand/orexportIMTDCsfrom
Canada.45UseableresponsestotheCommission’squestionnairewerereceivedfromonefirm:
BaldorElectricCanada(“BaldorCanada”).Accordingtoestimatesprovidedbytheresponding
Canadianproducerinitsquestionnaireresponse,BaldorCanadaaccountedforapproximately
***percentofallproductionofIMTDCsinCanadaandapproximately***percentofCanadian
exportstotheUnitedStatesduring2015.Thefirm’sreportedexportstotheUnitedStateswere
equivalentto***percentofU.S.importsofIMTDCsfromCanadaduring2015asreportedin
Commissionimporterquestionnaireresponses.
Aspreviouslynoted,BaldorCanadacloseditsSt.Claire,QuebecfacilityonMay27,2016
andrelocateditsCanadianfinishingequipmenttotheBaldorfacilitiesinWeavervilleand
Marion,NorthCarolina.Thepetitionerhasargued,however,thattheclosedBaldorCanada
plantwasonlyafinishingfacility,andtheclosurehashadnoeffectonCanadiancasting
capacity.6Thepetitionercitedanadditional42ironcastingplantsinCanada,atleast29of
whichitclaimsalreadycastIMTDCsorhavethecapabilitytodoso. 7Thepetitioneralsonoted
thatLaforoIronFoundryhadaclosesupplierrelationshipwithBaldorCanada. 8Furthermore,in
itspostͲhearingbrief,thepetitionerprovidedthenamesof14Canadianmachiningfacilities
andalludedtothepresenceofover500machiningoperationsthatcouldpossiblyhavethe
capacitytofinishIMTDCs. 9Baldorreportedthatitcurrentlysourcescastingsfortheparts
3PreliminaryOpinionatfootnote230.
4Thesefirmswereidentifiedthroughareviewofinformationsubmittedinthepetitionand
containedin***records.
5FirmsreportedproductionoflargeͲdiameterIMTDCstomatchCommerce’sscope.Forpurposesof
determiningoverallplantcapacity,dataonoutͲofͲscopeitems(includingsmallͲdiameterIMTDCs)
producedusingthesameequipmentandemployeeswerecollected.
6Hearingtranscript,pp.43Ͳ44(Pickard).
7Petitioner’sposthearingbrief,pp.19Ͳ20.
8Petitioner’sprehearingbrief,exh.3.
9Petitioner’sposthearingbrief,exhs.14and15.Initspetition,thepetitioneridentifiedonlynine
possibleproducersofIMTDCsinCanada,fourofwhichindicatedintheirresponsetotheCommission’s
questionnairethattheyhadnotproducedIMTDCs.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 179 of 218
VIIͲ4
machinedonthefinishingequipmentmovedfromCanadatotheUnitedStatesprimarilyfrom
foundriesin***.10
TableVIIͲ1presentsinformationonBaldor’sIMTDCoperationsinCanadaandcertain
2015summarydatareportedinitsquestionnaireresponse.
Table VII-1
IMTDCs: Summary data on the responding firm in Canada, 2015
*******
Changesinoperations
BaldorCanadashutdownoperationsinCanadaeffectiveMay27,2016anditsfinishing
equipmentwasrelocatedtotheBaldorplantsinWeaverville,NorthCarolinaandMarion,North
Carolina.***.11
OperationsonIMTDCs
TableVIIͲ2presentsinformationontheIMTDCoperationsofBaldorCanada.Thedata
presentedforCanadaaretheportionoffinishedIMTDCsmachinedinBaldor’sCanadian
finishingfacilityfromunfinishedIMTDCscast/forgedinCanada.
Table VII-2
IMTDCs: Data on the industry in Canada, 2013-15, January to June 2015, January to June 2016,
and projected calendar years 2016 and 2017
*******
BaldorCanada’sproductionandshipmentsrosefrom2013to2014beforedecreasing
below2013levelsin2015followingthe***.Capacitydidnotchangeandcapacityutilization
roseandfellbutdidnotfallbelow2013levelsin2015.Production,capacityutilization,and
shipmentswerehigherduringthefirsthalfof2015thaninthecomparableperiodof2016.
Capacitydidnotchange.BaldorCanada’sexportstotheUnitedStatesaccountedfor***ofthe
firm’stotalshipments,risingfrom***percentoftotalshipmentsin2013to***percentof
totalshipmentsin2015.Thefirm’sexportstotheUnitedStatesaccountedfor***percentof
totalshipmentsduringJanuaryͲJune2016.ExportsofIMTDCstotheUnitedStatesbyBaldor
Canadaincreasedby***percentfrom***piecesin2013to***piecesin2015,butwere***
percentlowerat***piecesinthefirsthalfof2016comparedwith***piecesinthefirsthalfof
2015.Homemarketshipmentsaccountedfor***ofthefirm’sshipments,decreasingfrom***
percentoftotalshipmentsin2013to***percentoftotalshipmentsin2015.Thefirm’shome
10***.
11***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 180 of 218
VIIͲ5
marketshipmentsaccountedfor***percentofitstotalshipmentsduringJanuaryͲJune2016.
BaldorCanada***exportIMTDCstomarketsotherthantheUnitedStates.
Alternativeproducts
AsshownintableVIIͲ3,IMTDCsconstitute***reportedproductiononshared
equipmentbyBaldorinCanada.InͲscope(large)IMTDCsrepresentslightlylessthan***of
productionvolumebyweight,andslightlymorethan***bypiececount.
Table VII-3
IMTDCs: Canada producer’s overall capacity and production on the same (finishing) equipment
as subject production, 2013-15, January to June 2015, and January to June 2016
*******
Exports
GlobalTradeAtlas(“GTA”)dataforthevalueoftotalexportsfromCanadaby
destinationmarketfor2013to2015arepresentedintableVIIͲ4. 12Theseofficialexports
statistics,whichcoveritemsexportedunderHSsubheading8483.50(“flywheelsandpulleys,
includingpulleyblocks”),includenotonlytheinͲscopeIMTDCsbutalsoasubstantialamountof
itemsthatarenotcoveredbythescopeoftheseinvestigations(e.g.,steel,plastic,and
aluminumpulleys).InͲscopeIMTDCsmayalsobeexportedunderothersubheadings.Thedata
presentedintableVIIͲ4showthatCanada’stopexportmarketfortheseproductsistheUnited
States,accountingfor44.8percentoftotalexportsfromCanadaduring2015.Thenexttwo
largestdestinationmarketsforexportsofflywheelsandpulleysfromCanadaareJapanand
China,accountingfor14.5percentand10.2percentoftotalexportsfromCanadain2015,
respectively.
12Onlyvaluedataarepresentedbecausequantitydataarenotconsistentlyavailableforall
destinationmarkets.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 181 of 218
VIIͲ6
Table VII-4
Flywheels and pulleys: Canada exports by destination markets, 2013-15
Item
Calendar year
2013 2014 2015
Value (1,000 dollars)
Canada's exports to the United States 181,355 197,320 193,345
Canada's exports to other major destination markets.--
Japan 38,587 56,185 62,478
China 29,912 42,978 43,938
Germany 31,802 36,625 34,172
Korea 14,520 25,479 21,658
France 24,784 20,114 13,985
Poland 10,061 12,275 10,553
Mexico 1,558 1,071 8,937
Italy 6,021 4,633 6,601
All other destination markets 31,401 48,445 35,620
Total Canada exports 370,001 445,126 431,287
Share of value (percent)
Canada's exports to the United States 49.0 44.3 44.8
Canada's exports to other major destination markets.--
Japan 10.4 12.6 14.5
China 8.1 9.7 10.2
Germany 8.6 8.2 7.9
Korea 3.9 5.7 5.0
France 6.7 4.5 3.2
Poland 2.7 2.8 2.4
Mexico 0.4 0.2 2.1
Italy 1.6 1.0 1.5
All other destination markets 8.5 10.9 8.3
Total Canada exports 100.0 100.0 100.0
Source: Official Canada exports statistics under HTS subheading 8483.50, as reported by Statistics
Canada in the GTIS/GTA database, accessed September 10, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 182 of 218
VIIͲ7
THEINDUSTRYINCHINA
Overview
TheCommissionissuedforeignproducers’orexporters’questionnairestosixtyͲone
firms,includingthirtyͲonefirmsidentifiedinthepetitions(includingrevisionstothepetitions)
believedtoproduceand/orexportIMTDCsfromChina. 1314Useableresponsestothe
Commission’squestionnairewerereceivedfromsevenfirms:HaiyangJingweidaGearingCo.,
Ltd.(“Jingweida”),HuadeTianjinMetalManufacture(“HuadeTianjin”),MartinSprocket&Gear
(Shanghai)Co.,Ltd.(“MartinSprocketShanghai”),PowermachImport&ExportCo.Ltd.Sichuan
(“Powermach”),ShanxiHuaxiangGroupCo.Ltd.(“ShanxiHuaxiang”),ShijiazhuangCAPTPower
TransmissionCo.,Ltd.(“ShijiazhuangCAPT”),andYueqingBethelShaftCollarMfgCo("Yueqing
Bethel").15
AccordingtoestimatesprovidedbyrespondingChineseproducersinquestionnaire
responses,aggregatedataonIMTDCsproducedinChinaaccountedforapproximately***
percentofallproductionofIMTDCsinChina 16andapproximately***percentofexportstothe
UnitedStatesduring2015.Thesefirms’exportstotheUnitedStateswereequivalentto***
percentofU.S.importsofIMTDCsfromChinaduring2015asreportedinresponsestothe
Commission’simporterquestionnaire.Thepetitionerbelievesthattheseresponses
substantiallyunderstatetheactualChinesemarket,identifyingnineadditionalChinese
producersthatfailedtoprovidetheCommissionwithquestionnaireresponses. 1718
TableVIIͲ5liststheChineseproducersofIMTDCsthatrespondedtotheCommission’s
questionnaireandcertain2015summarydatareportedinresponsetoCommission
questionnaires.
13Thesefirmswereidentifiedthroughareviewofinformationsubmittedinthepetitionsand
containedin***records.
14FirmsreportedproductionoflargeͲdiameterIMTDCstomatchCommerce’sscope.Forpurposesof
determiningoverallplantcapacity,dataonoutͲofͲscopeitems(includingsmallͲdiameterIMTDCs)
producedusingthesameequipmentandemployeeswerecollected.
15Aresponsewasreceivedfromoneotherfirm,ShenzhenInͲsailPrecisionPartsCo.,Ltd.butdata
werenotinuseablecondition.
16Coveragewasbasedonthemarketsizeestimatedby***.
17Thepetitionerindicatedthateightfirms(FuqingJiachengTradingCorp.Ltd.;HangzhouPowertrans
Co.,Ltd.;XinguangTechnologyCo.LtdofSichuanProvince;YantaiHenryHardwareCo.,Ltd.;Zhejiang
DongzingAutoPartsCo.,Ltd.;ChangzhouJulingFoundryCo.,Ltd.;TranͲAutoIndustriesCo.,Ltd.;and
ChangzhouLiangjiuMechanicalManufacturing)participatedinCommerce’sproceedings.Onlyfourof
thesefirmswereidentifiedbythepetitionerinitspetitionsaspossibleIMTDCproducers/exportersin
China.ThepetitionerfurthernotedthatFuzhouMinYueMechanicalandElectricalCo.Ltd.participated
intheCommission’spreliminaryphaseoftheinvestigationsbutdidnotprovidearesponsetothe
Commission’squestionnaireinthefinalphase.Petitioner’sposthearingbrief,exh.1,p.26.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 183 of 218
VIIͲ8
Table VII-5
IMTDCs: Summary data on firms in China, 2015
*******
Changesinoperations
OnerespondingproducerinChinareportedinitsquestionnaireresponseinthefinal
phaseoftheseinvestigationsthatithadexperiencedachangeinitsoperationsrelatedtothe
productionofIMTDCssinceJanuary1,2013.***.Initsquestionnaireresponseinthe
Commission’spreliminaryphaseoftheinvestigations,Baldorreported***.
OperationsonIMTDCs
TableVIIͲ6presentsinformationontheIMTDCoperationsoftheresponding
producers/exportersinChina.Chinesecapacity,production,capacityutilization,inventories,
andshipmentsincreasedfrom2013to2015,withproductionandshipmentspeakingin2014.
Capacity(inpieces)washigherinthefirsthalfof2016thaninthecomparableperiodof2015
butproduction,capacityutilization(basedonpieces),andshipmentswerelowerduringthe
firsthalfof2016comparedwiththefirsthalfof2015. 19
Table VII-6
IMTDCs: Data on the industry in China, 2013-15, January to June 2015, January to June 2016, and
projected calendar years 2016 and 2017
*******
Homemarketsalesaccountedfor***oftotalshipmentsbytheChineseproducersin
2015,decliningfrom***percentoftotalshipmentsin2013.Homemarketsalesbyresponding
Chineseproducersaccountedfor***percentoftotalsalesduringthefirsthalfof2016.Export
marketsotherthantheUnitedStatesaccountedforbetween***percentand***percentof
therespondingChineseproducers’totalshipmentssince2013.Othermajorexportmarkets
identifiedbytheproducersinChinainclude***.
ExportsofIMTDCstotheUnitedStatesbytheproducersinChinadecreasedby***
percentfrom***piecesin2013to***piecesin2015,andwere***percentlowerat***
piecesinthefirsthalfof2016comparedwith***piecesinthefirsthalfof2015.Asashareof
Chineseproducers’totalshipments,exportstotheUnitedStatesdecreasedfrom***percentin
19ThepetitionerassertstheunderreportingofcapacityonthepartofPowermachandCAPT.
Respondentdeniesthisallegation.Petitioner’sprehearingbrief,pp.43Ͳ44,Respondent’sposthearing
brief,exh.1,p.1.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 184 of 218
VIIͲ9
2013to***percentin2015,andwere***percentoftotalshipmentsduringthefirsthalfof
2016. 20
Alternativeproducts
AsshownintableVIIͲ7,approximately***ofallreportedIMTDCproductiononshared
equipmentbyrespondingChineseproducersissubjectmerchandise.Otherproductsreportedly
producedinChinaonthesameequipmentasfinishedIMTDCsinclude***.
Table VII-7
IMTDCs: Chinese producers' overall capacity and production on the same (finishing) equipment
as subject production for IMTDCs, 2013-15, January to June 2015, and January to June 2016
*******
Exports
GlobalTradeAtlas(“GTA”)dataforthevalueoftotalexportsfromChinabydestination
marketfor2013to2015arepresentedintableVIIͲ8. 21Aspreviouslynoted,theseofficial
exportsstatistics,whichcoveritemsexportedunderHSsubheading8483.50(“flywheelsand
pulleys,includingpulleyblocks”),includenotonlytheinͲscopeIMTDCsbutalsoasubstantial
amountofitemsthatarenotcoveredbythescopeoftheseinvestigations(e.g.,steel,plastic,
andaluminumpulleys).InͲscopeIMTDCsmayalsobeexportedunderothersubheadings.The
datapresentedintableVIIͲ8showthatChina’stopexportmarketfortheseproductsisthe
UnitedStates,accountingfor18.5percentoftotalexportsfromChinaduring2015.Thenext
twolargestdestinationmarketsforexportsofflywheelsandpulleysfromChinaareJapanand
Germany,accountingfor16.5percentand8.0percentoftotalexportsfromChinain2015,
respectively.
20RespondentarguesthatexportstothirdͲcountrymarketsroseasshipmentstotheUnitedStates
declinedtoaccountforclaimsofexcessChinesecapacityarguedbythepetitioner.Respondent’s
posthearingbrief,pp.13Ͳ14.
21Onlyvaluedataarepresentedbecausequantitydataarenotconsistentlyavailableforall
destinationmarkets.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 185 of 218
VIIͲ10
Table VII-8
Flywheels and pulleys: China exports by destination markets, 2013-15
Item
Calendar year
2013 2014 2015
Value (1,000 dollars)
China's exports to the United States 53,912 55,374 51,106
China's exports to other major destination markets.--
Japan 46,391 50,288 45,616
Germany 12,604 14,909 22,087
Korea South 14,765 15,347 16,903
Spain 8,756 10,809 9,679
Netherlands 7,370 11,033 9,007
Italy 9,558 9,506 8,807
Mexico 5,964 6,643 6,414
United Kingdom 8,931 7,329 5,818
All other destination markets 121,923 108,774 100,387
Total China exports 290,174 290,011 275,823
Share of value (percent)
China's exports to the United States 18.6 19.1 18.5
China's exports to other major destination markets.--
Japan 16.0 17.3 16.5
Germany 4.3 5.1 8.0
Korea South 5.1 5.3 6.1
Spain 3.0 3.7 3.5
Netherlands 2.5 3.8 3.3
Italy 3.3 3.3 3.2
Mexico 2.1 2.3 2.3
United Kingdom 3.1 2.5 2.1
All other destination markets 42.0 37.5 36.4
Total China exports 100.0 100.0 100.0
Source: Official China exports statistics under HTS subheading 8483.50, as reported by Statistics China
in the GTIS/GTA database, accessed September 10, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 186 of 218
VIIͲ11
THECOMBINEDSUBJECTINDUSTRIES
TableVIIͲ9presentsinformationontheIMTDCoperationsoftherespondingproducers
andexportersinbothCanadaandChinacombinedfor2013Ͳ15,JanuaryͲJune2015,and
JanuaryͲJune2016,aswellasprojectionsfor2016Ͳ17.
Table VII-9
IMTDCs: Data on industry in subject countries, 2013-15, January to June 2015, and January to June 2016
and projection calendar years 2016 and 2017
Item
Actual experience Projections
Calendar year January to June Calendar year
2013 2014 2015 2015 2016 2016 2017
Quantity (1,000 pounds)
Capacity 72,513 72,785 73,476 36,678 36,651 65,693 58,510
Production 53,205 59,794 56,237 24,677 27,262 51,789 47,355
Quantity (pieces)
Capacity 4,549,125 4,560,219 4,651,946 2,295,336 2,309,543 4,149,952 3,704,722
Production 3,037,945 3,569,464 3,348,696 1,669,901 1,475,656 2,963,413 2,592,641
End-of-period inventories 985,407 1,005,513 961,179 985,026 891,973 937,041 773,429
Shipments:
Home market shipments:
Internal consumption/
transfers *** *** *** *** *** *** ***
Commercial shipments *** *** *** *** *** *** ***
Subtotal, home market
shipments *** *** *** *** *** *** ***
Export shipments to:
United States 1,064,424 1,180,027 963,908 497,218 354,373 693,203 543,509
All other markets *** *** *** *** *** *** ***
Total exports *** *** *** *** *** *** ***
Total shipments 3,059,531 3,549,358 3,393,030 1,690,388 1,544,862 2,996,381 2,787,377
Ratios and shares (percent)
Capacity utilization (based on
pounds) 73.4 82.2 76.5 67.3 74.4 78.8 80.9
Capacity utilization (based on
pieces) 66.8 78.3 72.0 72.8 63.9 71.4 70.0
Inventories/production 32.4 28.2 28.7 29.5 30.2 31.6 29.8
Inventories/total shipments 32.2 28.3 28.3 29.1 28.9 31.3 27.7
Share of shipments:
Home market shipments:
Internal consumption/
transfers *** *** *** *** *** *** ***
Commercial shipments *** *** *** *** *** *** ***
Subtotal, home market
shipments *** *** *** *** *** *** ***
Export shipments to:
United States 34.8 33.2 28.4 29.4 22.9 23.1 19.5
All other markets *** *** *** *** *** *** ***
Total exports *** *** *** *** *** *** ***
Total shipments 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 187 of 218
VIIͲ12
U.S.IMPORTERS’INVENTORIES
TableVIIͲ10presentsdataonU.S.importers’reportedinventoriesofIMTDCs.During
2015,CanadianandChineseinͲscopeIMTDCsaccountedfor***and***percent,respectively,
ofallinventoriesofimportedlargediameterIMTDCsheldintheUnitedStates.Canadianand
ChineseinͲscopeIMTDCinventoriesintheaggregatedeclinedfrom2013to2014,increasedin
2015,andwerehigherinJanuaryͲJune2016thaninthecomparableperiodin2015.
Table VII-10
IMTDCs: U.S. importers' end-of-period inventories of imports by source, 2013-15, January to June 2015, and
January to June 2016
Item
Calendar year January to June
2013 2014 2015 2015 2016
Imports from Canada:
Inventories (pieces) *** *** *** *** ***
Ratio to U.S. imports (percent) *** *** *** *** ***
Ratio to U.S. shipments of imports (percent) *** *** *** *** ***
Ratio to total shipments of imports (percent) *** *** *** *** ***
Imports from China:
Inventories (pieces) *** *** *** *** ***
Ratio to U.S. imports (percent) *** *** *** *** ***
Ratio to U.S. shipments of imports (percent) *** *** *** *** ***
Ratio to total shipments of imports (percent) *** *** *** *** ***
Imports from subject sources:
Inventories (pieces) 690,333 654,579 743,681 661,113 749,396
Ratio to U.S. imports (percent) 47.2 42.9 47.4 43.7 64.3
Ratio to U.S. shipments of imports (percent) 52.3 46.6 55.1 47.5 71.8
Ratio to total shipments of imports (percent) 47.8 42.4 50.0 43.2 62.8
Imports from nonsubject large diameter:
Inventories (pieces) 176,354 147,331 105,798 128,361 146,045
Ratio to U.S. imports (percent) 27.7 22.6 16.7 20.0 21.1
Ratio to U.S. shipments of imports (percent) 30.5 25.0 18.8 22.8 23.9
Ratio to total shipments of imports (percent) 26.7 21.6 15.7 18.9 20.0
Imports from all sources large diameter:
Inventories (pieces) 866,687 801,910 849,479 789,474 895,441
Ratio to U.S. imports (percent) 41.3 36.8 38.6 36.6 48.2
Ratio to U.S. shipments of imports (percent) 45.7 40.2 44.5 40.4 54.2
Ratio to total shipments of imports (percent) 41.2 36.0 39.3 35.7 46.6
Imports from all sources small diameter:
Inventories (pieces) 1,036,124 909,715 812,555 854,732 900,288
Ratio to U.S. imports (percent) 39.2 32.1 28.3 29.9 28.4
Ratio to U.S. shipments of imports (percent) 40.9 35.2 31.8 33.0 35.3
Ratio to total shipments of imports (percent) 35.9 30.9 27.4 28.6 29.6
Imports from all sources all sizes:
Inventories (pieces) 1,902,811 1,711,625 1,662,034 1,644,206 1,795,729
Ratio to U.S. imports (percent) 40.1 34.1 32.7 32.8 35.7
Ratio to U.S. shipments of imports (percent) 42.9 37.4 37.2 36.2 42.7
Ratio to total shipments of imports (percent) 38.1 33.1 32.4 31.6 36.1
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 188 of 218
VIIͲ13
U.S.IMPORTERS’CURRENTORDERS
TheCommissionrequestedimporterstoindicatewhethertheyhadimportedor
arrangedfortheimportationofinͲscopeIMTDCsfordeliveryafterJune30,2016.Fifteenfirms
reporteddataconcerningsuchimportsorarrangementsofimportsofIMTDCs,2ofwhich 22
reportedimportsfromCanadaand15ofwhichreportedsuchimportsfromChina.Data
concerningU.S.importssubsequenttoJune30,2016arepresentedintableVIIͲ11.Thesedata
showadeclineinarrangedU.S.importsfromCanadaandChinafromthethirdquarterof2016
tothesecondquarterof2017.TherearenoarrangedimportsfromCanadaexpectedafterthe
fourthquarterof2016.
Table VII-11
IMTDCs: Arranged imports, July 2016 through June 2017
*******
DUMPINGINTHIRDͲCOUNTRYMARKETS
TheCommissionaskedquestionnairerecipientstoidentifywhethertheproducts
subjecttothisproceedinghavebeenthesubjectofanyotherimportreliefproceedingsinthe
UnitedStatesorinanyothercountries.Nofirmsparticipatinginthisproceedinghaveidentified
anyotherimportreliefproceedingsorordersintheUnitedStatesorinanyothercountrieswith
regardtoIMTDCs.
INFORMATIONONNONSUBJECTCOUNTRIES
GlobalproductionofIMTDCsisgeographicallydispersed,withproductioninmultiple
countriesinEurope,LatinAmerica,andAsia.23Globalexportsbynonsubjectproducerstotaled
$4.0billionin2015,downslightlyfrom$4.3billionin2013,althoughthesedataincludea
substantialportionofnonsubjectproductssuchassteel,aluminum,andplasticpulleys(table
VIIͲ12).
22***.
23CompiledfromdatasubmittedinresponsetoCommissionquestionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 189 of 218
VIIͲ14
Table VII-12
IMTDCs: Flywheels and pulleys: Global exports by destination markets, 2013-15
Item
Calendar year
2013 2014 2015
Value (1,000 dollars)
United States 408,439 1,155,746 1,152,645
Subject exporters.--
Canada 370,001 445,126 431,287
China 290,174 290,011 275,823
All subject exporters 660,175 735,138 707,110
All other major exporting countries.--
Germany 1,478,996 1,522,121 1,377,492
Japan 562,918 483,617 402,330
France 425,396 417,878 395,568
Italy 360,497 386,824 339,760
South Korea 200,457 228,369 245,526
Slovakia 135,554 158,036 159,335
Belgium 191,885 175,867 156,715
Czech Republic 86,387 91,576 119,395
Thailand 77,575 83,968 78,208
Poland 33,963 53,837 60,716
All other exporting countries. 768,497 760,581 647,493
Total global exports 5,390,738 6,253,556 5,842,294
Share of value (percent)
United States 7.6 18.5 19.7
Subject exporters.--
Canada 6.9 7.1 7.4
China 5.4 4.6 4.7
All subject exporters 12.2 11.8 12.1
All other major exporting countries.--
Germany 27.4 24.3 23.6
Japan 10.4 7.7 6.9
France 7.9 6.7 6.8
Italy 6.7 6.2 5.8
South Korea 3.7 3.7 4.2
Slovakia 2.5 2.5 2.7
Belgium 3.6 2.8 2.7
Czech Republic 1.6 1.5 2.0
Thailand 1.4 1.3 1.3
Poland 0.6 0.9 1.0
All other exporting countries. 14.3 12.2 11.1
Total global exports 100.0 100.0 100.0
Note.--Includes nonsubject products such as steel, plastic, and aluminum pulleys. IMTDCs may also be
exported under other subheadings.
Source: Official exports statistics under HTS subheading 8483.50 as reported by various national
statistical authorities in the IHS/GTA database, accessed September 10, 2016.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 190 of 218
VIIͲ15
Germanywastheleadingnonsubjectglobalexporter,with$1.4billionin2015exports. 24
Japanwasthesecondlargestexporter,with$402millioninexportsin2015, 25andFrancewas
thethirdlargestexporter,with$396millioninexports.TheEUandMexicoarediscussedin
moredetailbelow.
Mexico
TheindustryinMexicoproducescastingsandfinishedsheaves.Firmsengagedin
productioninMexicoincludethesubsidiariesofmultinationalfirmsaswellasMexicoͲbased
firms.26MexicobasedfirmsincludemachiningͲonlyshops(e.g.Magonza),andintegratedfirms
offeringbothfoundryandmachiningservices(e.g.FundiciónQualyandValcon).27***.28
24OfficialexportsstatisticsunderHTSsubheading8483.50asreportedbyvariousnationalstatistical
authoritiesintheIHS/GTAdatabase,accessedSeptember10,2016.IMTDCsmayalsobeexportedunder
othersubheadings.
25JapanesemanufacturersproducebothcastingsandfinishedIMTDCs.BusinessInformationin
HiroshimaWebsite,http://www.hitec.city.hiroshima.jp/EE/ee00268.html;KinoshitaManufacturing
CompanyWebsite,http://www.kinoshitaseisakusho.co.jp/en/profile/(accessedNovember10,2015);
ProtechnologyWebsite,http://protechnology.jp/companies/partsͲmanufacturing/kinseiͲengineering
(accessedNovember10,2015);TheLeadingJapanFoundriesCatalog,http://www.japanͲ
foundries.com/TheͲLeadingͲJapanͲFoundriesͲCatalog.pdf(accessedNovember10,2015);JͲGoodTech
Website,https://jgoodtech.smrj.go.jp/corporations/90?locale=en(accessedNovember9,2015).
26DirectoriodeExportadoresWebsite,http://www3.promexico.gob.mx(accessedNovember20,
2015);TBWWebsite,http://www.tbwoods.com/Company WorldWide Locations.asp(accessed
November12,2015;MartinSprocketandGearWebsite,
http://www.martinsprocket.com/locations/mexico(accessedNovember21,2015);Petitioners’
postconferencebrief,exh.1,p.53.
27Valconwebsite,http://valcon.com.mx/?lang=en(accessedOctober24,2016);Magonzawebsite,
http://www.magonza.com.mx/(accessedOctober24,2016);andFundicionQualywebsite,
http://www.qualy.com.mx/(accessedOctober24,2016).
28***.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 191 of 218
VIIͲ16
EuropeanUnion
TheEUhassubstantialsheavemanufacturing,withEUͲ28productionofflywheelsand
pulleys—includingnonsubjectproducts—totaling86,800metrictons(95,700shorttons)in
2015,upslightlyfrom85,400metrictons(94,100shorttons)in2013.ThevalueofEU
production(excludinggoodsretainedforinternaluse)totaled$568millionin2015,with
Germany($225million),Slovakia($171million),andFrance($62million)combinedaccounting
foramajorityofEUproduction. 29TheEUindustryproducesvarioustypesofsubjectproducts,
suchasVͲbeltsheaves,synchronousdrives,adjustablespeeddrives,andflywheels,andhas
productioncapabilitiesrangingfromlessthan10inchesindiametertomorethan100inches. 30
29FormanyEUmemberstates,reportedexportsexceededreportedproductionin2015.Eurostat
database,http://ec.europa.eu/eurostat/data/database(accessedSeptember2,2016);andBoardof
GovernorsoftheFederalReserveSystemWebsite,HistoricalRatesfortheEUEuro,
http://www.federalreserve.gov/releases/h10/hist/dat00 eu.htm(accessedSeptember2,2016).
30GeorgeTaylorandCo.Website,http://www.gtham.co.uk(accessedSeptember6,2016);Profil
IndustrieWebsite,http://www.profilindustrie.com(accessedSeptember6,2016);PTPIndustryWebsite,
http://www.ptpindustry.com(accessedSeptember6,2016);WaltherFlenderGroupWebsite,
http://waltherͲflenderͲgruppe.de(accessedSeptember7,2016).
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 192 of 218
AͲ1
APPENDIXA
FEDERALREGISTERNOTICES
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 193 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 194 of 218
AͲ3
TheCommissionmakesavailablenoticesrelevanttoitsinvestigationsandreviewsonits
website,www.usitc.gov.Inaddition,thefollowingtabulationpresents,inchronologicalorder,
FederalRegisternoticesissuedbytheCommissionandCommerceduringthecurrent
proceeding.
Citation Title Link
80FR67789,
November3,2015
CertainIronMechanicalTransfer
DriveComponentsFromCanadaand
China;InstitutionofAntidumpingand
CountervailingDutyInvestigations
andSchedulingofPreliminaryPhase
Investigations
http://www.gpo.gov/fdsys/pkg/FRͲ
2015Ͳ11Ͳ03/pdf/2015Ͳ27956.pdf
80FR73716,
November25,2015
CertainIronMechanicalTransfer
DriveComponentsfromCanadaand
ThePeople’sRepublicofChina:
InitiationofLessͲThanͲFairͲValue
Investigations
http://www.gpo.gov/fdsys/pkg/FRͲ
2015Ͳ11Ͳ25/pdf/2015Ͳ29985.pdf
80FR73722,
November25,2015
CertainIronMechanicalTransfer
DriveComponentsFromthePeople’s
RepublicofChina:Initiationof
CountervailingDutyInvestigation
http://www.gpo.gov/fdsys/pkg/FRͲ
2015Ͳ11Ͳ25/pdf/2015Ͳ29945.pdf
80FR79095
December18,2015
CertainIronMechanicalTransfer
DriveComponentsFromCanadaand
ChinaDeterminations
https://www.gpo.gov/fdsys/pkg/FRͲ
2015Ͳ12Ͳ18/pdf/2015Ͳ31779.pdf
81FR21316
April11,2016
CountervailingDutyInvestigationof
CertainIronMechanicalTransfer
DriveComponentsFromthePeople’s
RepublicofChina:Preliminary
AffirmativeDeterminationand
AlignmentofFinalDetermination
WithFinalAntidumpingDuty
Determination
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ04Ͳ11/pdf/2016Ͳ08235.pdf
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 195 of 218
AͲ4
Citation Title Link
81FR36876
June8,2016
CertainIronMechanicalTransfer
DriveComponentsFromthePeople’s
RepublicofChina:Preliminary
DeterminationofSalesatLessThan
FairValueandPostponementofFinal
Determination
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ06Ͳ08/pdf/2016Ͳ13533.pdf
81FR36887
June8,2016
CertainIronMechanicalTransfer
DriveComponentsFromCanada:
AffirmativePreliminary
DeterminationofSalesatLessThan
FairValueandPostponementofFinal
Determination
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ06Ͳ08/pdf/2016Ͳ13535.pdf
81FR41348
June24,2016
IronMechanicalTransferDrive
ComponentsFromCanadaandChina;
SchedulingoftheFinalPhaseof
CountervailingDutyandAntidumping
DutyInvestigations
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ06Ͳ24/pdf/2016Ͳ14977.pdf
81FR75032
October28,2016
CertainIronMechanicalTransfer
DriveComponentsFromthePeople’s
RepublicofChina:FinalAffirmative
DeterminationofSalesatLessThan
FairValue
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ10Ͳ28/pdf/2016Ͳ26104.pdf
81FR75037
October28,2016
CountervailingDutyInvestigationof
CertainIronMechanicalTransfer
DriveComponentsFromthePeople’s
RepublicofChina:FinalAffirmative
Determination
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ10Ͳ28/pdf/2016Ͳ26105.pdf
81FR75039
October28,2016
CertainIronMechanicalTransfer
DriveComponentsFromCanada:
FinalAffirmativeDeterminationof
SalesatLessThanFairValue
https://www.gpo.gov/fdsys/pkg/FRͲ
2016Ͳ10Ͳ28/pdf/2016Ͳ26106.pdf
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 196 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 197 of 218
APPENDIX B
HEARING WITNESSES
B-1
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 198 of 218
BͲ3
CALENDAR OF PUBLIC HEARING
Those listed below appeared as witnesses at the United States International Trade
Commission’s hearing:
Subject: Iron Mechanical Transfer Drive Components from Canada
and China
Inv. Nos.: 701-TA-550 and 731-TA-1304-1305 (Final)
Date and Time: October 18, 2016 - 9:30 am
Sessions were held in connection with these investigations in the Main Hearing Room
(Room 101), 500 E Street, S.W., Washington, DC.
OPENING REMARKS:
Petitioner (Daniel B. Pickard, Wiley Rein LLP)
Respondents (Jeffrey S. Grimson, Mowry & Grimson, PLLC)
In Support of the Imposition of
Antidumping and Countervailing Duty Orders:
Wiley Rein LLP
Washington, DC
on behalf of
TB Wood’s Incorporated
Carl R. Christenson, Chairman and Chief Executive Officer,
Altra Industrial Motion Corp.
Holly M. Shields, Group Controller, Couplings, Clutches &
Brakes Division, Altra Industrial Motion Corp.
Lew Crist, General Manager, TB Wood’s Incorporated
William R. Juergens, Commercial Castings Sale Manager,
TB Wood’s Incorporated
Daniel B. Pickard )
Robert E. DeFrancesco ) – OF COUNSEL
Stephanie M. Bell )
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 199 of 218
BͲ4
In Opposition to the Imposition of
Antidumping and Countervailing Duty Orders:
Mowry & Grimson, PLLC
Washington, DC
on behalf of
The China Chamber of Commerce of International
Commerce’s ad hoc Coalition of Producers
and Exporters of Certain Iron Mechanical
Transfer Drive Components from the People’s
Republic of China; Powermach Import &
Export Co., Ltd. (Sichuan); Shijiazhuang CAPT
Power Transmission Co., Ltd.; and Yueqing
Bethel Shaft Collar Manufacturing Co., Ltd.
Jeffrey S. Grimson )
Jill A. Cramer ) – OF COUNSEL
Yuzhe PengLing )
CLOSING REMARKS/REBUTTAL:
Petitioner (Daniel B. Pickard, Wiley Rein LLP)
Respondents (Jeffrey S. Grimson, Mowry & Grimson, PLLC)
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 200 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 201 of 218
APPENDIX C
SUMMARY DATA
C-1
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 202 of 218
Table C-1
IMTDCs: Summary data concerning the U.S. market, 2013-15, January to June 2015, and January to June 2016
Jan-Jun
2013 2014 2015 2015 2016 2013-15 2013-14 2014-15 2015-16
U.S. consumption quantity:
Amount................................................................................ *** *** *** *** *** *** *** *** ***
Producers' share (fn1).......................................................... *** *** *** *** *** *** *** *** ***
Importers' share (fn1):
Canada............................................................................. *** *** *** *** *** *** *** *** ***
China................................................................................ *** *** *** *** *** *** *** *** ***
Subject sources.............................................................. *** *** *** *** *** *** *** *** ***
Nonsubject sources large diameter................................. *** *** *** *** *** *** *** *** ***
Nonsubject sources small diameter................................ *** *** *** *** *** *** *** *** ***
Nonsubject sources of all sizes.................................... *** *** *** *** *** *** *** *** ***
All sources all sizes.................................................. *** *** *** *** *** *** *** *** ***
U.S. consumption value:
Amount................................................................................ *** *** *** *** *** *** *** *** ***
Producers' share (fn1).......................................................... *** *** *** *** *** *** *** *** ***
Importers' share (fn1):
Canada............................................................................. *** *** *** *** *** *** *** *** ***
China................................................................................ *** *** *** *** *** *** *** *** ***
Subject sources.............................................................. *** *** *** *** *** *** *** *** ***
Nonsubject sources large diameter................................. *** *** *** *** *** *** *** *** ***
Nonsubject sources small diameter................................ *** *** *** *** *** *** *** *** ***
Nonsubject sources of all sizes.................................... *** *** *** *** *** *** *** *** ***
All sources all sizes.................................................. *** *** *** *** *** *** *** *** ***
U.S. importers' U.S. shipments of imports from.--
Canada:
Quantity............................................................................ *** *** *** *** *** *** *** *** ***
Value................................................................................ *** *** *** *** *** *** *** *** ***
Unit value.......................................................................... *** *** *** *** *** *** *** *** ***
Ending inventory quantity.................................................. *** *** *** *** *** *** *** *** ***
China:
Quantity............................................................................ *** *** *** *** *** *** *** *** ***
Value................................................................................ *** *** *** *** *** *** *** *** ***
Unit value.......................................................................... *** *** *** *** *** *** *** *** ***
Ending inventory quantity.................................................. *** *** *** *** *** *** *** *** ***
Subject sources:
Quantity............................................................................ 1,319,110 1,405,280 1,349,482 695,379 521,554 2.3 6.5 (4.0) (25.0)
Value................................................................................ 42,171 44,129 40,231 21,036 15,612 (4.6) 4.6 (8.8) (25.8)
Unit value.......................................................................... $31.97 $31.40 $29.81 $30.25 $29.93 (6.7) (1.8) (5.1) (1.0)
Ending inventory quantity.................................................. 690,333 654,579 743,681 661,113 749,396 7.7 (5.2) 13.6 13.4
Nonsubject sources large diameter:
Quantity............................................................................ 578,694 588,300 561,421 281,534 305,140 (3.0) 1.7 (4.6) 8.4
Value................................................................................ 28,290 27,518 26,430 13,170 13,191 (6.6) (2.7) (4.0) 0.2
Unit value.......................................................................... $48.89 $46.78 $47.08 $46.78 $43.23 (3.7) (4.3) 0.6 (7.6)
Ending inventory quantity.................................................. 176,354 147,331 105,798 128,361 146,045 (40.0) (16.5) (28.2) 13.8
Nonsubject sources small diameter:
Quantity............................................................................ 2,536,367 2,583,807 2,555,265 1,296,437 1,276,258 0.7 1.9 (1.1) (1.6)
Value................................................................................ 33,645 39,695 25,623 12,964 12,107 (23.8) 18.0 (35.4) (6.6)
Unit value.......................................................................... $13.26 $15.36 $10.03 $10.00 $9.49 (24.4) 15.8 (34.7) (5.1)
Ending inventory quantity.................................................. 866,687 801,910 849,479 789,474 895,441 (2.0) (7.5) 5.9 13.4
Nonsubject sources of all sizes:
Quantity............................................................................ 3,115,061 3,172,107 3,116,686 1,577,971 1,581,398 0.1 1.8 (1.7) 0.2
Value................................................................................ 61,934 67,213 52,053 26,135 25,298 (16.0) 8.5 (22.6) (3.2)
Unit value.......................................................................... $19.88 $21.19 $16.70 $16.56 $16.00 (16.0) 6.6 (21.2) (3.4)
Ending inventory quantity.................................................. 1,036,124 909,715 812,555 854,732 900,288 (21.6) (12.2) (10.7) 5.3
All sources all sizes:
Quantity............................................................................ 4,434,171 4,577,387 4,466,168 2,273,350 2,102,952 0.7 3.2 (2.4) (7.5)
Value................................................................................ 104,105 111,342 92,284 47,170 40,910 (11.4) 7.0 (17.1) (13.3)
Unit value.......................................................................... $23.48 $24.32 $20.66 $20.75 $19.45 (12.0) 3.6 (15.1) (6.2)
Ending inventory quantity.................................................. 1,902,811 1,711,625 1,662,034 1,644,206 1,795,729 (12.7) (10.0) (2.9) 9.2
U.S. producers':
Average capacity quantity.................................................... *** *** *** *** *** *** *** *** ***
Production quantity.............................................................. *** *** *** *** *** *** *** *** ***
Capacity utilization (fn1)....................................................... *** *** *** *** *** *** *** *** ***
U.S. shipments:
Quantity............................................................................ *** *** *** *** *** *** *** *** ***
Value................................................................................ *** *** *** *** *** *** *** *** ***
Unit value (fn3)................................................................. *** *** *** *** *** *** *** *** ***
Export shipments:
Quantity............................................................................ *** *** *** *** *** *** *** *** ***
Value................................................................................ *** *** *** *** *** *** *** *** ***
Unit value.......................................................................... *** *** *** *** *** *** *** *** ***
Ending inventory quantity..................................................... *** *** *** *** *** *** *** *** ***
Inventories/total shipments (fn1) (fn4).................................. *** *** *** *** *** *** *** *** ***
Production workers.............................................................. *** *** *** *** *** *** *** *** ***
Hours worked (1,000s)......................................................... *** *** *** *** *** *** *** *** ***
Wages paid ($1,000)............................................................ *** *** *** *** *** *** *** *** ***
Hourly wages (dollars).......................................................... *** *** *** *** *** *** *** *** ***
Productivity (pieces per 1,000 hours).................................... *** *** *** *** *** *** *** *** ***
Unit labor costs.................................................................... *** *** *** *** *** *** *** *** ***
Net sales:
Quantity............................................................................ *** *** *** *** *** *** *** *** ***
Value................................................................................ *** *** *** *** *** *** *** *** ***
Unit value.......................................................................... *** *** *** *** *** *** *** *** ***
Cost of goods sold (COGS).................................................. *** *** *** *** *** *** *** *** ***
Gross profit or (loss)............................................................ *** *** *** *** *** *** *** *** ***
SG&A expenses................................................................... *** *** *** *** *** *** *** *** ***
Operating income or (loss)................................................... *** *** *** *** *** *** *** *** ***
Net income or (loss)............................................................. *** *** *** *** *** *** *** *** ***
Capital expenditures............................................................. *** *** *** *** *** *** *** *** ***
Unit COGS........................................................................... *** *** *** *** *** *** *** *** ***
Unit SG&A expenses............................................................ *** *** *** *** *** *** *** *** ***
Unit operating income or (loss)............................................. *** *** *** *** *** *** *** *** ***
Unit net income or (loss)...................................................... *** *** *** *** *** *** *** *** ***
COGS/sales (fn1)................................................................. *** *** *** *** *** *** *** *** ***
Operating income or (loss)/sales (fn1).................................. *** *** *** *** *** *** *** *** ***
Net income or (loss)/sales (fn1)............................................ *** *** *** *** *** *** *** *** ***
Notes:
fn1.--Reported data are in percent and period changes are in percentage points.
***
***
***
Source: Compiled from data submitted in response to Commission questionnaires.
C-3
Period changes
(Quantity=pieces; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per piece; Period changes=percent--exceptions noted)
Calendar year Calendar year
Reported data
January to June
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 203 of 218
CͲ4
ThetradeandemploymentdatareportedbyWaupacaarepresentedintableCͲ2.
Waupaca’sreporteddataconcerningoverallcapacityandproductiononthesameequipment
asIMTDCsarepresentedintableCͲ3.
Table C-2
IMTDCs: U.S. capacity, production, capacity utilization, shipments, and employment data
reported by Waupaca, 2013-15, January to June 2015, and January to June 2016
*******
Table C-3
IMTDCs: Waupaca’s reported overall U.S. capacity and production on the same equipment as
IMTDC production, 2013-15, January to June 2015, and January to June 2016
*******
TheresultsofoperationsonIMTDCsbyWaupacaarepresentedintableCͲ4andthe
firm’sreportedassets,capitalexpenditures,andR&DexpensesarepresentedintableCͲ5.
Table C-4
IMTDCs: Results of casting operations of Waupaca, 2013-15, January-June 2015, and January-
June 2016
*******
Table C-5
IMTDCs: Assets, capital expenditures, and R&D expenses reported by Waupaca, 2013-15,
January-June 2015, and January-June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 204 of 218
DͲ1
APPENDIXD
NONSUBJECTCOUNTRYPRICEDATA
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 205 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 206 of 218
DͲ3
TwoimportersreportedpricedataforMexicoforproducts1Ͳ6.Pricedatareportedby
thesefirmsaccountedfor0.7percentofU.S.commercialshipmentsofIMTDCsfromMexico.
ThesepriceitemsandaccompanyingdataarecomparabletothosepresentedintablesVͲ3to
VͲ8.PriceandquantitydataforMexicoareshownintablesDͲ1toDͲ6andinfigureDͲ1toDͲ6
(withdomesticandsubjectsources).
Table D-1
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 1, by quarters,
January 2013-June 2016
* * * * * * *
Table D-2
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 2, by quarters,
January 2013-June 2016
* * * * * * *
Table D-3
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 3, by quarters,
January 2013-June 2016
* * * * * * *
Table D-4
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 4, by quarters,
January 2013-June 2016
* * * * * * *
Table D-5
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 5, by quarters,
January 2013-June 2016
* * * * * * *
Table D-6
IMTDCs: Weighted-average f.o.b. prices and quantities of imported product 6, by quarters,
January 2013-June 2016
* * * * * * *
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 207 of 218
DͲ4
Figure D-1a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-1b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 1 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure D-2a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-2b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 2 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure D-3a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-3b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 3 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 208 of 218
DͲ5
Figure D-4a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-4b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 4 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure D-5a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-5b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 5 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Figure D-6a
IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to
distributors, by quarters, January 2013-June 2016
* * * * * * *
Figure D-6b
IMTDCs: Weighted-average prices and quantities of domestic and imported product 6 sold to end
users, by quarters, January 2013-June 2016
* * * * * * *
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 209 of 218
DͲ6
IncomparingnonsubjectcountrypricingdatawithU.S.producerpricingdata,pricesfor
productimportedfromMexicowerelowerthanpricesforU.S.Ͳproducedproductin71
instancesandhigherin48instances.Incomparingnonsubjectcountrypricingdatawith
Canadianpricingdata,pricesforproductimportedfromMexicowerelowerthanpricesfor
productimportedfromCanadain12instancesandhigherin59instances.Incomparing
nonsubjectcountrypricingdatawithsubjectChinesepricingdata,pricesforproductimported
fromMexicowerelowerthanpricesforproductimportedfromChinain11instancesand
higherin104instances.AsummaryofpricedifferentialsispresentedintableDͲ7.
Table D-7
IMTDCs: Summary of price differentials, by country, January 2013-June 2016
Comparison
Total
number of
comparisons
Nonsubject priced lower Nonsubject priced higher
Number of
quarters
Quantity
(pieces)
Number of
quarters
Quantity
(pieces)
Nonsubject vs United States.--
Mexico vs. United States 119 71 463 48 260
Nonsubject vs Subject.--
Mexico vs. Canada 71 12 84 59 288
Mexico vs. China 115 11 93 104 615
Source: Compiled from data submitted in response to Commission questionnaires.
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 210 of 218
EͲ1
APPENDIXE
SELECTEDFINANCIALRESULTSOFU.S.PRODUCERS
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 211 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 212 of 218
EͲ3
ThisappendixpresentedfirmͲbyͲfirmdataforU.S.producersontheiroperationson
IMTDCs.TableEͲ1presentsdataforthefivefirmsreportingintegratedcastingandfinishing
operations.Thesefivefirmsare:Bremen,EnDyn,Goldens’Foundry,MartinSprocket,andTBW.
TBW’sU.S.integratedcastingandfinishingoperationsanditsfinishingoperationsinMexico
basedoncastingsmadeintheUnitedStatesarebothincludedintableEͲ1.ThedataintableEͲ1
correspondtothoseintableVIͲ3.TableEͲ2presentsdataforthefivefirmsreportingstandͲ
alonefinishingoperationsbasedonpurchasedcastings.Thesefirmsare:B&B,Baldor,HiͲLo,
Maurey,andSterling.Inaddition,thefinishingoperationsof***areincludedinthisdataset.
ThedataintableEͲ2correspondtothoseintableVIͲ5.TablesEͲ1andEͲ2areconfidentialin
theirentirety.
Table E-1
IMTDCs: Selected results of operations of U.S. producers with integrated casting and finishing
operations, fiscal years 2013-15, January-June 2015, and January-June 2016
*******
Table E-2
IMTDCs: Selected results of U.S. producers on their finishing operations only, fiscal years 2013-
15, January-June 2015, and January-June 2016
*******
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 213 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 214 of 218
FͲ1
APPENDIXF
ALLEGEDEFFECTSOFSUBJECTIMPORTSONU.S.PRODUCERS’
EXISTINGDEVELOPMENTANDPRODUCTIONEFFORTS,
GROWTH,INVESTMENT,ANDABILITYTORAISECAPITAL
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 215 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 216 of 218
Case 1:17-cv-00022-TCS Document 51 Filed 11/29/18 Page 217 of 218
CAPITAL AND INVESTMENT
The Commission requested U.S. producers of IMTDCs to describe any actual or potential
negative effects of imports of IMTDCs from Canada and/or China on their return on investment,
or their growth, investment, ability to raise capital, existing development and production
efforts (including efforts to develop a derivative or more advanced version of the product), or
the scale of capital investments as a result of imports of IMTDCS from Canada and/or China.
Table F-1 tabulates the responses on actual negative effects on investment, growth, and
development while table F-2 presents responses on actual negative effects on growth of
domestic producers.
Table F-1
IMTDCS: Actual and anticipated negative effects of imports on investment and growth and
development since January 1, 2013
Item No Yes
Negative effects on investment! 3
Cancellation, postponement, or rejection of expansion projects
Denial or rejection of investment proposal
Reduction in the size of capital investments
Return on specific investments negatively impacted
Other
Negative effects on investment differ by country~ 8
Negative effects on growth and development” =
Rejection of bank loans
Lowering of credit rating
Problem related to the issue of stocks or bonds
Ability to service debt
Other
Negative effects on growth differ by country 9
Anticipated negative effects of imports” 2
Anticipated negative effects of imports differ by country° 8
"Firms that responded “no” were: ***.
? Firms that responded “yes” were: ***.
3 Firms that responded “no” were ***. Firms that responded “yes” were:
“Firms that responded “no” were ***.
° Firms that responded “yes” were ***.,
SH lAN[OlMOsOsOsO/M|/wWl/hI/AJw/=/RIS
eek
Source: Compiled from data submitted in response to Commission questionnaires.
Table F-2
IMTDCs: Narrative comments relating to actual and anticipated negative effects of imports on
investment and growth and development since January 1, 2013
* * * * * * *
F-3
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