ITC Investigation 701-TA-3569 is a U.S. International Trade Commission antidumping (AD) proceeding on Freight Rail Coupler Systems and Components from China; Inv. No. 701-TA-670 and 731-TA-1570 (Preliminary) from China. It's in the preliminary phase and currently in completed status. Commerce initiated the underlying investigation on October 19, 2021. No AD/CVD order has been issued from this investigation yet — the case will appear here once Commerce publishes a final determination.
Phase, parties, documents, and full text from USITC IDS
Freight Rail Coupler Systems and Components from China; Inv. No. 701-TA-670 and 731-TA-1570 (Preliminary)
Pending ITC investigation (preliminary/completed) on "Freight Rail Coupler Systems and Components".
Parties
Documents
Full text (398,222 chars)
=== USITC Institution and Scheduling === 54997Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices under active review. For additional information about 5-year reviews, go to http://www.fws.gov/endangered/what- we-do/recovery-overview.html. What information do we consider in our review? In conducting these reviews, we consider the best scientific and commercial data that have become available since the listing determination or most recent status review, such as: (1) The biology of the species, including, but not limited to, population trends, distribution, abundance, demographics, and genetics; (2) Habitat conditions, including, but not limited to, amount, distribution, and suitability; (3) Conservation measures that have been implemented that benefit the species; (4) Threat status and trends in relation to the five listing factors (as defined in section 4(a)(1) of the ESA); and (5) Other new information, data, or corrections, including, but not limited to, taxonomic or nomenclatural changes, identification of erroneous information contained in the List, and improved analytical methods. Any new information will be considered during the 5-year review and will also be useful in evaluating the ongoing recovery programs for the species. Species Under Review Entity listed: Polar bear (Ursus maritimus). • Where listed: wherever found. • Classification: Threatened. • Date listed (publication date for final listing rule): May 15, 2008. • Federal Register citation for final listing rule: 73 FR 28212. Request for Information To ensure that a 5-year review is complete and based on the best available scientific and commercial information, we request new information from all sources. See What Information Do We Consider in Our Review? for specific criteria. If you submit information, please support it with documentation such as maps, bibliographic references, methods used to gather and analyze the data, and/or copies of any pertinent publications, reports, or letters by knowledgeable sources. Public Availability of Comments Before including your address, phone number, email address, or other personal identifying information in your comments, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. Completed and Active Reviews A list of all completed and currently active 5-year reviews addressing species for which the Alaskan Region of the Service has lead responsibility is available at https://www.fws.gov/alaska/ pages/endangered-species-program/ recovery-endangered-species. Authority This document is published under the authority of the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq.). Peter Fasbender, Assistant Regional Director, Fisheries and Ecological Service, Alaska Region. [FR Doc. 2021–21713 Filed 10–4–21; 8:45 am] BILLING CODE 4333–15–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 701–TA–670 and 731– TA–1570 (Preliminary)] Freight Rail Coupler Systems and Components From China; Institution of Anti-Dumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations AGENCY : United States International Trade Commission. ACTION : Notice. SUMMARY : The Commission hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation Nos. 701–TA–670 and 731–TA–1570 (Preliminary) pursuant to the Tariff Act of 1930 (‘‘the Act’’) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of freight rail coupler systems and components thereof from China, provided for in subheading 8607.30.10 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Government of China. Subject merchandise attached to finished rail cars may also enter under HTSUS heading 8606 or under subheading 980300 if imported as an Instrument of International Traffic. Unless the Department of Commerce (‘‘Commerce’’) extends the time for initiation, the Commission must reach a preliminary determination in antidumping and countervailing duty investigations in 45 days, or in this case by November 15, 2021. The Commission’s views must be transmitted to Commerce within five business days thereafter, or by November 22, 2021. DATES : September 29, 2021. FOR FURTHER INFORMATION CONTACT : Stamen Borisson, (202) 205–3125, Office of Investigations, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Hearing- impaired persons can obtain information on this matter by contacting the Commission’s TDD terminal on 202– 205–1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202–205–2000. General information concerning the Commission may also be obtained by accessing its internet server (https:// www.usitc.gov). The public record for these investigations may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. SUPPLEMENTARY INFORMATION : Background.—These investigations are being instituted, pursuant to sections 703(a) and 733(a) of the Tariff Act of 1930 (19 U.S.C. 1671b(a) and 1673b(a)), in response to petitions filed on September 29, 2021, by the Coalition of Freight Coupler Producers, consisting of Amsted Rail Company, Inc., Chicago, IL and McConway & Torley LLC, Pittsburgh, PA. For further information concerning the conduct of these investigations and rules of general application, consult the Commission’s Rules of Practice and Procedure, part 201, subparts A and B (19 CFR part 201), and part 207, subparts A and B (19 CFR part 207). Participation in the investigations and public service list.—Persons (other than petitioners) wishing to participate in the investigations as parties must file an entry of appearance with the Secretary to the Commission, as provided in §§ 201.11 and 207.10 of the Commission’s rules, not later than seven days after publication of this notice in the Federal Register. Industrial users and (if the merchandise under investigation is sold at the retail level) representative consumer organizations have the right to appear as parties in Commission antidumping duty and countervailing duty investigations. The VerDate Sep<11>2014 18:56 Oct 04, 2021 Jkt 256001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\05OCN1.SGM 05OCN1 lotter on DSK11XQN23PROD with NOTICES1 54998 Federal Register / Vol. 86, No. 190 / Tuesday, October 5, 2021 / Notices Secretary will prepare a public service list containing the names and addresses of all persons, or their representatives, who are parties to these investigations upon the expiration of the period for filing entries of appearance. Limited disclosure of business proprietary information (BPI) under an administrative protective order (APO) and BPI service list.—Pursuant to § 207.7(a) of the Commission’s rules, the Secretary will make BPI gathered in these investigations available to authorized applicants representing interested parties (as defined in 19 U.S.C. 1677(9)) who are parties to the investigations under the APO issued in the investigations, provided that the application is made not later than seven days after the publication of this notice in the Federal Register. A separate service list will be maintained by the Secretary for those parties authorized to receive BPI under the APO. Conference.—In light of the restrictions on access to the Commission building due to the COVID–19 pandemic, the Commission is conducting the staff conference through video conferencing on October 20, 2021. Requests to appear at the conference should be emailed to preliminaryconferences@usitc.gov (DO NOT FILE ON EDIS) on or before October 18, 2021. Please provide an email address for each conference participant in the email. Information on conference procedures will be provided separately and guidance on joining the video conference will be available on the Commission’s Daily Calendar. A nonparty who has testimony that may aid the Commission’s deliberations may request permission to participate by submitting a short statement. Please note the Secretary’s Office will accept only electronic filings during this time. Filings must be made through the Commission’s Electronic Document Information System (EDIS, https:// edis.usitc.gov). No in-person paper- based filings or paper copies of any electronic filings will be accepted until further notice. Written submissions.—As provided in §§ 201.8 and 207.15 of the Commission’s rules, any person may submit to the Commission on or before October 25, 2021, a written brief containing information and arguments pertinent to the subject matter of the investigations. Parties shall file written testimony and supplementary material in connection with their presentation at the conference no later than noon on October 19, 2021. All written submissions must conform with the provisions of § 201.8 of the Commission’s rules; any submissions that contain BPI must also conform with the requirements of §§ 201.6, 207.3, and 207.7 of the Commission’s rules. The Commission’s Handbook on Filing Procedures, available on the Commission’s website at https:// www.usitc.gov/documents/handbook_ on_filing_procedures.pdf, elaborates upon the Commission’s procedures with respect to filings. In accordance with §§ 201.16(c) and 207.3 of the rules, each document filed by a party to the investigations must be served on all other parties to the investigations (as identified by either the public or BPI service list), and a certificate of service must be timely filed. The Secretary will not accept a document for filing without a certificate of service. Certification.—Pursuant to § 207.3 of the Commission’s rules, any person submitting information to the Commission in connection with these investigations must certify that the information is accurate and complete to the best of the submitter’s knowledge. In making the certification, the submitter will acknowledge that any information that it submits to the Commission during these investigations may be disclosed to and used: (i) By the Commission, its employees and Offices, and contract personnel (a) for developing or maintaining the records of these or related investigations or reviews, or (b) in internal investigations, audits, reviews, and evaluations relating to the programs, personnel, and operations of the Commission including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate nondisclosure agreements. Authority: These investigations are being conducted under authority of title VII of the Tariff Act of 1930; this notice is published pursuant to § 207.12 of the Commission’s rules. By order of the Commission. Dated: September 30, 2021. Lisa Barton, Secretary to the Commission. [FR Doc. 2021–21725 Filed 10–4–21; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation No. 337–TA–1199] Certain Tobacco Heating Articles and Components Thereof; Commission’s Final Determination Finding a Violation of Section 337; Issuance of a Limited Exclusion Order and Cease and Desist Orders; Termination of the Investigation AGENCY : U.S. International Trade Commission. ACTION : Notice. SUMMARY : Notice is hereby given that the U.S. International Trade Commission (‘‘Commission’’) has found a violation of section 337 of the Tariff Act of 1930, as amended, in this investigation and has issued a limited exclusion order prohibiting the importation of infringing tobacco heating articles and components thereof and cease and desist orders directed against respondents Philip Morris USA, Inc. (‘‘PM USA’’) and Altria Client Services LLC (‘‘ACS’’). The investigation is terminated. FOR FURTHER INFORMATION CONTACT : Lynde Herzbach, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205–3228. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email EDIS3Help@usitc.gov. General information concerning the Commission may also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on this matter can be obtained by contacting the Commission’s TDD terminal on (202) 205–1810. SUPPLEMENTARY INFORMATION : On May 15, 2020, the Commission instituted this investigation under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (‘‘section 337’’), based on a complaint filed by RAI Strategic Holdings, Inc., R.J. Reynolds Vapor Company, and R.J. Reynolds Tobacco Company, all of Winston-Salem, North Carolina (collectively, ‘‘Complainants’’). See 85 FR 29482–83. The complaint, as supplemented, alleges a violation of section 337 based upon the importation of certain tobacco heating articles and components thereof by reason of infringement of certain claims of U.S. Patent Nos. 9,839,238 (‘‘the ’238 patent’’); 9,930,915 (‘‘the ’915 patent’’); VerDate Sep<11>2014 18:56 Oct 04, 2021 Jkt 256001 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 E:\FR\FM\05OCN1.SGM 05OCN1 lotter on DSK11XQN23PROD with NOTICES1 ──────────────────────────────────────────────────────────── === Initiation – AD === 58864 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 1 See Petitioner’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Petitions for the Imposition of Antidumping and Countervailing Duties,’’ dated September 29, 2021 (the Petition). 2 See Petitioner’s Letters, ‘‘Amended Entry of Appearance: A–570–143,’’ dated October 6, 2021 (Amended EOA) and ‘‘Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to First Supplemental Questions for on Volume I General Issues and Injury Petition,’’ dated October 6, 2021 (First General Issues Supplement). The petitioner notes that, per the Amended EOA, the members of the Coalition of Freight Coupler Producers are: McConway & Torley, LLC and the United Steel, Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Worker International Union, AFL–CIO, CLC (the USW). The petitioner further notes that Amsted Rail Company, Inc. (Amsted) is no longer a member of the petitioning coalition and that the USW represents the workers at Amsted’s Granite, IL facility. See First General Issues Supplement at 8. 3 See the Petition. 4 See Commerce’s Letters, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Supplemental Questions,’’ dated October 4, 2021 (General Issues Supplemental); ‘‘Petition for the Imposition of Antidumping Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Supplemental Questions,’’ dated October 4, 2021; Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 4, 2021 (October 4, 2021, Phone Call Memorandum); Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 8, 2021 (October 8, 2021, Phone Call Memorandum); and Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 15, 2021 (October 15, 2021, Phone Call Memorandum). H. Federal Awarding Agency Contacts Any questions should be addressed to the contact information located in the FOR FURTHER INFORMATION CONTACT section of this FOA. I. Other Information 1. Paperwork Reduction Act. In accordance with the Paperwork Reduction Act of 1995, the information collection requirements associated with the ReConnect Program, as covered in this FOA, have been approved by the Office of Management and Budget (OMB) under OMB Control Number 0572–0152. This funding announcement does not create any new information collection requirements nor does it change existing information collection requirements. 2. Congressional Review Act. Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act or CRA), 5 U.S.C. 801 et seq., the Office of Information and Regulatory Affairs in the Office of Management and Budget designated this action as a major rule as defined by 5 U.S.C. 804(2), because it is likely to result in an annual effect on the economy of $100,000,000 or more. Accordingly, there is a 60-day delay in the effective date of this action. Application selection will not begin until after December 27, 2021. Therefore, the 60-day delay required by the CRA is not expected to have a material impact upon the administration and/or implementation of the ReConnect Program. 3. USDA Non-Discrimination Statement. In accordance with Federal civil rights law and USDA civil rights regulations and policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, familial status, family/ parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident. Program Information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (e.g., Braille, large print, audiotape, American Sign Language, etc.) should contact the responsible Mission Area, Agency, or staff office; the USDA TARGET Center at 202–720–2600 (voice and TTY); or the Federal Relay Service at (800) 877–8339. To file a program discrimination complaint, a complainant should complete a Form AD–3027, USDA Program Discrimination Complaint Form, which can be obtained online at https://www/ocio.usda.gov/documents/ ad-3027, from any USDA office, by calling (866) 632–9992, or by writing a letter addressed to USDA. The letter must contain the complainant’s name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights about the nature and date of an alleged civil rights violation. The completed AD–3027 form or letter must be submitted to USDA by: (1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250–9410; or (2) Fax: (833) 256–1665 or (202) 690– 7442; or (3) Email: program.intake@usda.gov. USDA is an equal opportunity provider, employer, and lender. Christopher A. McLean, Acting Administrator, Rural Utilities Service. [FR Doc. 2021–23128 Filed 10–22–21; 8:45 am] BILLING CODE 3410–15–P DEPARTMENT OF COMMERCE International Trade Administration [A–570–143] Freight Rail Coupler Systems and Certain Components Thereof From the People’s Republic of China: Initiation of Less-Than-Fair-Value Investigation AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce DATES : Applicable October 19, 2021. FOR FURTHER INFORMATION CONTACT : Mark Harrison, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–0357. SUPPLEMENTARY INFORMATION : The Petition On September 29, 2021, the U.S. Department of Commerce (Commerce) received an antidumping duty (AD) petition concerning imports of freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) filed in proper form on behalf of the Coalition of Freight Coupler Producers (the petitioner). 1 On October 6, 2021, the petitioner filed an amendment to the Petition, clarifying the identity of the members of the Coalition of Freight Coupler Producers, the members of which are, or represent, domestic producers of freight rail couplers. 2 The Petition was accompanied by a countervailing duty (CVD) petition concerning imports of freight rail couplers from China. 3 On October 1, 4, 8, and 15, 2021, Commerce requested supplemental information pertaining to certain aspects of the Petition in both general and AD- specific separate supplemental questionnaires and phone calls with the petitioner. 4 On October 6, 12, and 18, VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00006 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58865Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 5 See Petitioner’s Letters, ‘‘Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Responses to Supplemental Questions for on Volume I General Issues and Injury Petition,’’ dated October 6, 2021 (First General Issues Supplement); ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Response to Supplemental Questions for Volume II China Antidumping Duty Petition,’’ dated October 6, 2021; ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Second Supplemental Questions on Volume I General Issues and Injury Petition,’’ dated October 12, 2021 (Second General Issues Supplement); and ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Third Supplemental Questions on Volume I General Issues and Injury Petition,’’ dated October 18, 2021 (Scope Clarification). 6 See ‘‘Determination of Industry Support for the Petition’’ section, infra. 7 See General Issues Supplemental; see also October 4, 2021, Phone Call Memorandum; October 8, 2021, Phone Call Memorandum; and October 15, 2021, Phone Call Memorandum. 8 See First General Issues Supplement at 1–7 and Exhibit I–Supp–1; see also Second General Issues Supplement at 1–4 and Exhibit I–2Supp–1; see also Scope Clarification at 1–9 and Exhibit I–3Supp–1. 9 See Scope Clarification. 10 See Antidumping Duties; Countervailing Duties, Final Rule, 62 FR 27296, 27323 (May 19, 1997) (Preamble). 11 See 19 CFR 351.102(b)(21) (defining ‘‘factual information’’). 12 See 19 CFR 351.303(b). 13 See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and Compliance; Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014) for details of Commerce’s electronic filing requirements, effective August 5, 2011. Information on help using ACCESS can be found at https://access.trade.gov/ help.aspx and a handbook can be found at https:// access.trade.gov/help/Handbook_on_Electronic_ Filing_Procedures.pdf. 2021, the petitioner filed timely responses to these requests for additional information. 5 In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of freight rail couplers from China are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the meaning of section 731 of the Act and that imports of such products are materially injuring, or threatening material injury to, the domestic freight rail couplers industry in the United States. Consistent with section 732(b)(1) of the Act, the Petition is accompanied by information reasonably available to the petitioner supporting the allegation. Commerce finds that the petitioner filed the Petition on behalf of the domestic industry because the petitioner is an interested party, as defined in section 771(9)(E) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support for the initiation of the requested AD investigation.6 Period of Investigation Because China is a non-market economy (NME) country, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) is January 1, 2021, through June 30, 2021. Scope of the Investigation The product covered by this investigation is freight rail couplers from China. For a full description of the scope of this investigation, see the appendix to this notice. Comments on the Scope of the Investigation On October 4, 8, and 15, 2021, Commerce requested further information from the petitioner regarding the proposed scope to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief.7 On October 6, 12, and 18, 2021, the petitioner revised the scope.8 The description of the merchandise covered by this investigation, as described in the appendix to this notice, reflects these clarifications. In its October 18, 2021, submission, the petitioner provided additional explanation of the language in the scope of the investigation pertaining to the inclusion of freight rail couplers imported as part of a rail car (‘‘{w}hen mounted on or to other non- subject merchandise, such as a rail car, only the complete coupler system is covered by the scope’’), including freight rail couplers attached to rail cars in, and imported from, third countries (‘‘{s}ubject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries.’’). 9 While Commerce has adopted this provision for purposes of initiation, we invite parties to this proceeding to comment on this provision along with their scope comments (as detailed below). As discussed in the Preamble to Commerce’s regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (i.e., scope).10 Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determination. If scope comments include factual information, all such factual information should be limited to public information.11 To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit such comments by 5:00 p.m. Eastern Time (ET) on November 8, 2021, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on November 18, 2021, which is 10 calendar days from the initial comment deadline.12 Commerce requests that any factual information that parties consider relevant to the scope of the investigation be submitted during this period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request permission to submit the additional information. All scope submissions must be filed on the records of the concurrent AD and CVD investigations. Filing Requirements All submissions to Commerce must be filed electronically via Enforcement and Compliance’s (E&C’s) Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies.13 An electronically filed document must be received successfully in its entirety by the time and date it is due. Comments on Product Characteristics Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of freight rail couplers to be reported in response to Commerce’s AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors of production (FOPs) accurately, as well as to develop appropriate product-comparison criteria. Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on November 8, 2021, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on November 18, 2021, which is 10 calendar days after the VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00007 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58866 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 14 See section 771(10) of the Act. 15 See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff’d 865 F. 2d 240 (Fed. Cir. 1989)). 16 See Petition at Volume I at 16–21 and Exhibits I–4, I–7, and I–15; see also First General Issues Supplement at 10–11; and Second General Issues Supplement at 6–7. 17 For a discussion of the domestic like product analysis as applied to this case and information regarding industry support, see Checklist, ‘‘Antidumping Duty Investigation Initiation Checklist: Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated concurrently with this Federal Register notice (China AD Initiation Checklist) at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petitions Covering Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China (Attachment II). 18 See Petition at Volume I at 3–4; see also First General Issues Supplement at 8–10 and Exhibit I– Supp–2; and Second General Issues Supplement at 4–5. 19 See Petition at Volume I at 3–4 and Exhibit I– 5; see also First General Issues Supplement at 9– 10 and Exhibit I–Supp–2; and Second General Issues Supplement at 5 and Exhibit I–2Supp–2. 20 See Petition at Volume I at 3–4 and Exhibit I– 5; see also First General Issues Supplement at 8– 10 and Exhibit I–Supp–2; and Second General Issues Supplement at 5. 21 See Petition at Volume I at 2–4 and Exhibits I– 3 through I–5; see also First General Issues Supplement at 7–10 and Exhibits I–Supp–2 and I– Supp–3; and Second General Issues Supplement at 4–5 and Exhibit I–2Supp–2. 22 See Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Request for Department to Deny the Petitions for Imposition of Duties Filed by the Coalition of Freight Coupler Producers as Legally Infirm,’’ dated October 7, 2021. 23 See Petitioner’s Letter, ‘‘Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Wabtec,’’ dated October 12, 2021 (Petitioner Letter I). 24 See Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Reply in Support of Request for Department to Deny the Petitions for Imposition of Duties Filed by the Coalition of Freight Coupler Producers,’’ dated October 12, 2021. 25 See Strato’s Letter, ‘‘Strato Support for Rejecting Petition: Antidumping & Countervailing Duty Investigation of Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated October 13, 2021. 26 See Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Strato and Wabtec,’’ dated October 14, 2021 (Petitioner Letter II). 27 See China AD Initiation Checklist at Attachment II. 28 Id.; see also section 732(c)(4)(D) of the Act. 29 See China AD Initiation Checklist at Attachment II. initial comment deadline. All comments and submissions to Commerce must be filed electronically using ACCESS, as explained above, on the record of the AD investigation. Determination of Industry Support for the Petition Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the ‘‘industry.’’ Section 771(4)(A) of the Act defines the ‘‘industry’’ as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether ‘‘the domestic industry’’ has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product, 14 they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce’s determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.15 Section 771(10) of the Act defines the domestic like product as ‘‘a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.’’ Thus, the reference point from which the domestic like product analysis begins is ‘‘the article subject to an investigation’’ (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition). With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigation. 16 Based on our analysis of the information submitted on the record, we have determined that freight rail couplers, as defined in the scope, constitute a single domestic like product, and we have analyzed industry support in terms of that domestic like product.17 In determining whether the petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the ‘‘Scope of the Investigation,’’ in the appendix to this notice. To establish industry support, the petitioner provided its own production of freight rail couplers in 2020.18 The petitioner estimated production for the only other known producer of freight rail couplers in the United States. 19 The petitioner compared its production to the estimated total 2020 production of the domestic like product for the entire domestic industry.20 We relied on data provided by the petitioner for purposes of measuring industry support.21 On October 7, 2021, we received comments on industry support from Wabtec Corporation (Wabtec), a U.S. importer of freight rail couplers.22 On October 12, 2021, the petitioner responded to the comments from Wabtec. 23 On October 12, 2021, we received additional comments from Wabtec. 24 On October 13, 2021, we received comments on industry support from Strato, Inc. (Strato), a U.S. importer of freight rail couplers. 25 On October 14, 2021, the petitioner responded to the comments from Strato and Wabtec.26 Our review of the data provided in the Petition, the First General Issues Supplement, the Second General Issues Supplement, Petitioner Letters I and II, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petition. 27 First, the Petition established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).28 Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petition account for at least 25 percent of the total production of the domestic like product. 29 Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00008 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58867Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 30 Id. 31 Id. 32 See Petition at Volume I at 27 and Exhibit I– 27. 33 Id. at 14–16, 22–44 and Exhibits I–3 through I– 5, I–11, I–13, I–14, and I–17 through I–47; see also First General Issues Supplement at 11–13 and Exhibit I–Supp–3. 34 See China AD Initiation Checklist at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petitions Covering Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China. 35 See the China AD Initiation Checklist. 36 Id. 37 See, e.g., Antidumping Duty Investigation of Certain Aluminum Foil from the People’s Republic of China: Affirmative Preliminary Determination of Sales at Less-Than-Fair Value and Postponement of Final Determination, 82 FR 50858, 50861 (November 2, 2017), and accompanying Preliminary Decision Memorandum at ‘‘China’s Status as a Non- Market Economy,’’ unchanged in Certain Aluminum Foil from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 83 FR 9282 (March 5, 2018). 38 See Petition at Volume II at 8–9. 39 Id. at 10 and Exhibit II–15. 40 Id. at 1 and 10–12 and Exhibits II–11 and II– 14. 41 Id. at 17–18 and Exhibit II–23 and II–24. 42 See China AD Initiation Checklist. 43 See Petition at Volume I at 13 and Exhibit I– 10. because the domestic producers (or workers) who support the Petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petition. 30 Accordingly, Commerce determines that the Petition was filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act.31 Allegations and Evidence of Material Injury and Causation The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.32 The petitioner contends that the industry’s injured condition is illustrated by a significant volume of subject imports; reduced market share; underselling and price depression and/ or suppression; lost sales and revenues; declines in production, U.S. shipments, and capacity utilization; decline in employment; decline in financial performance; and the magnitude of the estimated dumping margin. 33 We assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as negligibility, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation. 34 Allegations of Sales at LTFV The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate the AD investigation of imports of freight rail couplers from China. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the China AD Initiation Checklist. U.S. Price The petitioner based export price (EP) on information from a quoted sales offer for freight rail couplers produced in and exported from China by a Chinese producer.35 The petitioner made adjustments for foreign inland freight and foreign brokerage and handling to calculate an ex-factory U.S. price.36 Normal Value Commerce considers China to be an NME country.37 In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by Commerce. Therefore, we continue to treat China as an NME country for purposes of the initiation of this investigation. Accordingly, NV in China is appropriately based on FOPs valued in a surrogate market economy country, in accordance with section 773(c) of the Act. The petitioner states that Brazil is an appropriate surrogate country because Brazil is a market economy country that is at a level of economic development comparable to that of China and is a significant producer of comparable merchandise.38 The petitioner submitted publicly-available information from Brazil to value all FOPs.39 Based on the information provided by the petitioner, we determine that it is appropriate to use Brazil as a surrogate country for China for initiation purposes. Interested parties will have the opportunity to submit comments regarding surrogate country selections and, pursuant to 19 CFR 351.301(c)(3)(i), will be provided an opportunity to submit publicly available information to value FOPs within 30 days before the scheduled date of the preliminary determination. Factors of Production The petitioner used the product- specific consumption rates of a U.S. producer of freight rail couplers as a surrogate to value Chinese manufacturers’ FOPs. 40 Additionally, the petitioner calculated factory overhead; selling, general and administrative expenses; and profit based on the experience of a Brazilian producer of comparable merchandise (i.e., steel components).41 Fair Value Comparisons Based on the data provided by the petitioner, there is reason to believe that imports of freight rail couplers from China are being, or are likely to be, sold in the United States at LTFV. Based on a comparison of EP to NV, in accordance with sections 772 and 773 of the Act, the estimated dumping margins for freight rail couplers from China are 142.98 and 147.11 percent ad valorem.42 Initiation of LTFV Investigation Based upon our examination of the Petition on freight rail couplers from China and supplemental responses, we find that the Petition meets the requirements of section 732 of the Act. Therefore, we are initiating an AD investigation to determine whether imports of freight rail couplers from China are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 140 days after the date of this initiation. Respondent Selection In the Petition, the petitioner named eight companies in China as producers and/or exporters of freight rail couplers.43 In accordance with our standard practice for respondent selection in AD investigations involving NME countries, Commerce selects respondents based on quantity and value (Q&V) questionnaires in cases where it has determined that the number of companies is large and it cannot individually examine each company based upon its resources. Therefore, considering the number of producers and exporters identified in the Petition, Commerce will solicit Q&V information that can serve as a basis for selecting exporters for individual examination in the event that Commerce decides to limit the number of respondents individually examined pursuant to section 777A(c)(2) of the Act. Because there are eight producers and/or exporters identified in the Petition, Commerce has determined that it will VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00009 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58868 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 44 See Policy Bulletin 05.1: ‘‘Separate-Rates Practice and Application of Combination Rates in Antidumping Investigation involving NME Countries,’’ (April 5, 2005), available at http:// enforcement.trade.gov/policy/bull05-1.pdf (Policy Bulletin 05.1). 45 See Policy Bulletin 05.1 at 6 (emphasis added). 46 See section 733(a) of the Act. 47 Id. 48 See 19 CFR 351.301(b). 49 See 19 CFR 351.301(b)(2). issue Q&V questionnaires to each potential respondent for which the petitioner has provided a complete address. In addition, Commerce will post the Q&V questionnaire along with filing instructions on E&C’s website at https:// enforcement.trade.gov/questionnaires/ questionnaires-ad.html. Producers/ exporters of freight rail couplers from China that do not receive Q&V questionnaires may still submit a response to the Q&V questionnaire and can obtain a copy of the Q&V questionnaire from E&C’s website. In accordance with the standard practice for respondent selection in AD cases involving NME countries, in the event Commerce decides to limit the number of respondents individually investigated, Commerce intends to base respondent selection on the responses to the Q&V questionnaire that it receives. Responses to the Q&V questionnaire must be submitted by the relevant Chinese producers/exporters no later than 5:00 p.m. ET on November 2, 2021, which is two weeks from the signature date of this notice. All Q&V questionnaire responses must be filed electronically via ACCESS. An electronically filed document must be received successfully, in its entirety, by ACCESS no later than 5:00 p.m. ET on the deadline noted above. Interested parties must submit applications for disclosure under Administrative Protective Order (APO) in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on E&C’s website at http://enforcement.trade.gov/apo. Commerce intends to finalize its decisions regarding respondent selection within 20 days of publication of this notice. Separate Rates In order to obtain separate-rate status in an NME investigation, exporters and producers must submit a separate-rate application. 44 The specific requirements for submitting a separate-rate application in a China investigation are outlined in detail in the application itself, which is available on E&C’s website at http://enforcement.trade.gov/ nme/nme-sep-rate.html. The separate- rate application will be due 30 days after publication of this initiation notice. Producers/exporters who submit a separate-rate application and have been selected as mandatory respondents will be eligible for consideration for separate-rate status only if they respond to all parts of Commerce’s AD questionnaire as mandatory respondents. Commerce requires that respondents from China submit a response to both the Q&V questionnaire and the separate-rate application by the respective deadlines in order to receive consideration for separate-rate status. Companies not filing a timely Q&V questionnaire response will not receive separate rate consideration. Use of Combination Rates Commerce will calculate combination rates for certain respondents that are eligible for a separate rate in an NME investigation. The Separate Rates and Combination Rates Bulletin states: {w}hile continuing the practice of assigning separate rates only to exporters, all separate rates that {Commerce} will now assign in its NME Investigations will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applies both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of ‘‘combination rates’’ because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.45 Distribution of Copies of the AD Petition In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petition has been provided to the Government of China via ACCESS. Furthermore, to the extent practicable, Commerce will attempt to provide a copy of the public version of the Petition to each exporter named in the Petition, as provided under 19 CFR 351.203(c)(2). ITC Notification Commerce will notify the ITC of our initiation, as required by section 732(d) of the Act. Preliminary Determination by the ITC The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of freight rail couplers from China are materially injuring, or threatening material injury to, a U.S. industry.46 A negative ITC determination will result in the investigation being terminated.47 Otherwise, the investigation will proceed according to statutory and regulatory time limits. Submission of Factual Information Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)–(iv). Section 351.301(b) of Commerce’s regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted 48 and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. 49 Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in this investigation. Extensions of Time Limits Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301 or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, Commerce will inform parties in a letter or memorandum of the deadline (including a specified time) by VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00010 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58869Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 50 See 19 CFR 351; see also Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013) (Time Limits Final Rule), available at http:// www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013- 22853.htm. 51 See section 782(b) of the Act. 52 See Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule). Answers to frequently asked questions regarding the Final Rule are available at http://enforcement.trade.gov/tlei/notices/factual_ info_final_rule_FAQ_07172013.pdf. 53 See Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). 54 See Temporary Rule Modifying AD/CVD Service Requirements Due to COVID–19; Extension of Effective Period, 85 FR 41363 (July 10, 2020). 1 See Polyester Textured Yarn from Malaysia: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures, 86 FR 29748 (June 3, 2021) (Preliminary Determination), and accompanying Preliminary Decision Memorandum (PDM). which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely- filed requests for the extension of time limits. Parties should review Commerce’s regulations concerning the extension of time limits and the Time Limits Final Rule, prior to submitting factual information in this investigation. 50 Certification Requirements Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.51 Parties must use the certification formats provided in 19 CFR 351.303(g). 52 Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements. Notification to Interested Parties Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. Parties wishing to participate in this investigation should ensure that they meet the requirements of these procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)). 53 Note that Commerce has temporarily modified certain of its requirements for serving documents containing business proprietary information until further notice. 54 This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c). Dated: October 19, 2021. Ryan Majerus, Deputy Assistant Secretary for Policy and Negotiations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. Appendix—Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. [FR Doc. 2021–23231 Filed 10–22–21; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–557–823] Polyester Textured Yarn From Malaysia: Final Affirmative Determination of Sales at Less-Than Fair-Value AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY : The Department of Commerce (Commerce) determines that polyester textured yarn (yarn) from Malaysia is being, or is likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is October 1, 2019, through September 30, 2020. DATES : Applicable October 25, 2021. FOR FURTHER INFORMATION CONTACT : Daniel Alexander, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–4313. SUPPLEMENTARY INFORMATION : Background On June 3, 2021, Commerce published in the Federal Register the preliminary affirmative determination in the LTFV investigation of yarn from Malaysia. 1 VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00011 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 ──────────────────────────────────────────────────────────── === Initiation – CVD === 58878 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 1 See Petitioner’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Petitions for the Imposition of Antidumping and Countervailing Duties,’’ dated September 29, 2021 (the Petition). 2 See Petitioner’s Letters, ‘‘Amended Entry of Appearance: C–570–144,’’ dated October 6, 2021 (Amended EOA); and ‘‘Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to First Supplemental Questions for on Volume I General Issues and Injury Petition,’’ dated October 6, 2021 (First General Issues Supplement). The petitioner notes that, per the Amended EOA, the members of the Coalition of Freight Coupler Producers are: McConway & Torley, LLC and the United Steel, Continuation of Suspension of Liquidation In accordance with section 735(c)(1)(B) of the Act, Commerce will instruct U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of polyester textured yarn from Vietnam, as described in Appendix I of this notice, which were entered or withdrawn from warehouse for consumption on or after June 3, 2021, the date of publication of the Preliminary Determination of this investigation in the Federal Register. Pursuant to section 735(c)(1)(B)(ii) of the Act, upon the publication of this notice, Commerce will instruct CBP to require a cash deposit equal to the weighted-average amount by which the normal value exceeds U.S. price as follows: (1) The cash deposit rate for the exporter/producer combination listed in the table above will be the rate identified in the table; (2) for all combinations of Vietnamese exporters/ producers of subject merchandise that have not received their own separate rate above, the cash-deposit rate will be the cash deposit rate established for the Vietnam-wide entity; and (3) for all non- Vietnamese exporters of subject merchandise which have not received their own separate rate above, the cash- deposit rate will be the cash deposit rate applicable to the Vietnamese exporter/ producer combination (or the Vietnam- wide entity) that supplied that non- Vietnamese exporter. These suspension of liquidation instructions will remain in effect until further notice. International Trade Commission Notification In accordance with section 735(d) of the Act, we will notify the International Trade Commission (ITC) of our final affirmative determination of sales at less than fair value. Because the final determination in this investigation is affirmative, in accordance with section 735(b)(2) of the Act, the ITC will make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of subject merchandise from Vietnam no later than 45 days after our final determination. If the ITC determines that such injury does not exist, this proceeding will be terminated and all cash deposits posted will be refunded. If the ITC determines that such injury does exist, Commerce will issue an antidumping duty order directing CBP to assess, upon further instruction by Commerce, antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation. Notification Regarding Administrative Protective Order This notice serves as a reminder to the parties subject to an administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation. Notification to Interested Parties This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act, and 19 CFR 351.210(c). Dated: October 18, 2021. Ryan Majerus, Deputy Assistant Secretary for Policy and Negotiations, Performing the Non-Exclusive Functions and Duties of the Assistant Secretary for Enforcement and Compliance. Appendix I—Scope of the Investigation The merchandise covered by this investigation, polyester textured yarn, is synthetic multifilament yarn that is manufactured from polyester (polyethylene terephthalate). Polyester textured yarn is produced through a texturing process, which imparts special properties to the filaments of the yarn, including stretch, bulk, strength, moisture absorption, insulation, and the appearance of a natural fiber. This scope includes all forms of polyester textured yarn, regardless of surface texture or appearance, yarn density and thickness (as measured in denier), number of filaments, number of plies, finish (luster), cross section, color, dye method, texturing method, or packaging method (such as spindles, tubes, or beams). The merchandise subject to this investigation is properly classified under subheadings 5402.33.3000 and 5402.33.6000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the merchandise is dispositive. Appendix II—List of Topics Discussed in the Issues and Decision Memorandum I. Summary II. Background III. Surrogate Country IV. Separate Rate V. Vietnam-Wide Rate VI. Changes Since the Preliminary Determination VII. Scope of the Investigation VIII. Discussion of the Issues Comment 1: Selection of Financial Statements Comment 2: Calculations of Surrogate Financial Ratios Comment 3: Auxiliary Electricity Comment 4: Electricity Valuation Comment 5: Masterbatch PET Chips Valuation Comment 6: PET Chips Valuation Comment 7: Scrap Offset Comment 8: Polyethylene Strap IX. Recommendation [FR Doc. 2021–23127 Filed 10–22–21; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [C–570–144] Freight Rail Coupler Systems and Certain Components Thereof From the People’s Republic of China: Initiation of Countervailing Duty Investigation AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. DATES : Applicable October 19, 2021. FOR FURTHER INFORMATION CONTACT : Whitley Herndon, AD/CVD Operations, Office V, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–6274. SUPPLEMENTARY INFORMATION : The Petition On September 29, 2021, the U.S. Department of Commerce (Commerce) received a countervailing duty (CVD) petition concerning imports of freight rail coupler systems and certain components thereof (freight rail couplers) from the People’s Republic of China (China) filed in proper form on behalf of the Coalition of Freight Coupler Producers (the petitioner). 1 On October 6, 2021, the petitioner filed an amendment to the Petition, clarifying the identity of the members of the Coalition of Freight Coupler Producers, the members of which are, or represent, domestic producers of freight rail couplers. 2 The Petition was VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00020 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58879Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices Paper & Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Worker International Union, AFL–CIO, CLC (the USW). The petitioner further notes that Amsted Rail Company, Inc. (Amsted) is no longer a member of the petitioning coalition and that the USW represents the workers at Amsted’s Granite, IL facility. See First General Issues Supplement at 8. 3 See the Petition. 4 See Commerce’s Letters, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Supplemental Questions,’’ dated October 4, 2021 (General Issues Supplemental); ‘‘Petition for the Imposition of Antidumping Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Supplemental Questions,’’ dated October 4, 2021; Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 4, 2021 (October 4, 2021, Phone Call Memorandum); Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 8, 2021 (October 8, 2021, Phone Call Memorandum); and Memorandum, ‘‘Petitions for the Imposition of Antidumping and Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Phone Call with Counsel to the Petitioner,’’ dated October 15, 2021 (October 15, 2021, Phone Call Memorandum). 5 See Petitioner’s Letters, ‘‘Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Responses to Supplemental Questions for on Volume I General Issues and Injury Petition,’’ dated October 6, 2021 (First General Issues Supplement); see also Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Supplemental Questions on Volume III China Countervailing Duty Petition—Questions 9 and 11,’’ dated October 7, 2021; ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Second Supplemental Questions on Volume I General Issues and Injury Petition,’’ dated October 12, 2021 (Second General Issues Supplement); and ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Third Supplemental Questions on Volume I General Issues and Injury Petition,’’ dated October 18, 2021 (Scope Clarification). 6 See ‘‘Determination of Industry Support for the Petition’’ section, infra. 7 See 19 CFR 351.204(b)(2). 8 See First General Issues Supplement Questionnaire; see also October 4, 2021, Phone Call Memorandum; October 8, 2021, Phone Call Memorandum; and October 15, 2021, Phone Call Memorandum. 9 See First General Issues Supplement at 1–7 and Exhibit I–Supp–1; see also Second General Issues Supplement at 1–4 and Exhibit I–2Supp–1; and Scope Clarification at Exhibit I–3Supp–1. 10 See Scope Clarification. 11 See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997) (Preamble). 12 See 19 CFR 351.102(b)(21) (defining ‘‘factual information’’). 13 See 19 CFR 351.303(b). 14 Commerce’s practice dictates that where a deadline falls on a weekend or Federal holiday, the appropriate deadline is the next business day. See Notice of Clarification: Application of ‘‘Next Business Day’’ Rule for Administrative Determination Deadlines Pursuant to the Tariff Act of 1930, As Amended, 70 FR 24533 (May 10, 2005); see also 19 CFR 351.303(b). accompanied by an antidumping duty (AD) petition concerning freight rail couplers from China. 3 On October 1, 4, 8, and 15, 2021, Commerce requested supplemental information pertaining to certain aspects of the Petition. 4 On October 6, 7, 12, and 18, 2021, the petitioner filed timely responses to these requests for additional information.5 In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that the Government of China (GOC) is providing countervailable subsidies, within the meaning of sections 701 and 771(5) of the Act, to producers of freight rail couplers in China and that such imports are materially injuring, or threatening material injury to, the domestic industry producing in the United States. Consistent with section 702(b)(1) of the Act and 19 CFR 351.202(b), for those alleged programs on which we are initiating a CVD investigation, the Petition is supported by information reasonably available to the petitioner. Commerce finds that the petitioner filed the Petition on behalf of the domestic industry because the petitioner is an interested party as defined in section 771(9)(E) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support with respect to the initiation of the requested CVD investigation.6 Period of Investigation Because the Petition was filed on September 29, 2021, the period of investigation is January 1, 2020, through December 31, 2020.7 Scope of the Investigation The merchandise covered by this investigation is freight rail couplers from China. For a full description of the scope of this investigation, see the appendix to this notice. Comments on Scope of the Investigation On October 1, 4, 8, and 15, 2021, Commerce requested further information from the petitioner regarding the proposed scope to ensure that the scope language in the Petition is an accurate reflection of the products for which the domestic industry is seeking relief. 8 On October 6, 12, and 18, 2021, the petitioner revised the scope.9 The description of the merchandise covered by this investigation, as described in the appendix to this notice, reflects these clarifications. In its October 18, 2021, submission, the petitioner provided additional explanation of the language in the scope of the investigation pertaining to the inclusion of freight rail couplers imported as part of a rail car (‘‘{w}hen mounted on or to other non- subject merchandise, such as a rail car, only the complete coupler system is covered by the scope’’), including freight rail couplers attached to rail cars in, and imported from, third countries (‘‘{s}ubject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries.’’).10 While Commerce has adopted this provision for purposes of initiation, we invite parties to this proceeding to comment on this provision along with their scope comments (as detailed below). As discussed in the Preamble to Commerce’s regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (i.e., scope).11 Commerce will consider all comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determination. If scope comments include factual information, all such factual information should be limited to public information.12 To facilitate preparation of its questionnaires, Commerce requests that all interested parties submit scope comments by 5:00 p.m. Eastern Time (ET) on November 8, 2021, which is 20 calendar days from the signature date of this notice.13 Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on November 18, 2021, which is 10 calendar days from the initial comment deadline.14 Commerce requests that any factual information that the parties consider relevant to the scope of the investigation be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigation may be relevant, the party may contact Commerce and request permission to submit the additional information. All scope comments must also be filed on the record of the concurrent AD and CVD investigations. Filing Requirements All submissions to Commerce must be filed electronically via Enforcement and Compliance (E&C)’s Antidumping Duty and Countervailing Duty Centralized VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00021 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58880 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 15 See Antidumping and Countervailing Duty Proceedings: Electronic Filing Procedures; Administrative Protective Order Procedures, 76 FR 39263 (July 6, 2011); see also Enforcement and Compliance; Change of Electronic Filing System Name, 79 FR 69046 (November 20, 2014), for details of Commerce’s electronic filing requirements, effective August 5, 2011. Information on using ACCESS can be found at https://access.trade.gov/ help.aspx and a handbook can be found at https:// access.trade.gov/help/Handbook_on_Electronic_ Filing_Procedures.pdf. 16 See Commerce’s Letter, ‘‘Countervailing Duty Petition on Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated September 29, 2021. 17 See GOC’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Request for Consultation to Discuss the Countervailing Duty Investigation Petition,’’ dated October 11, 2021. 18 See Memorandum, ‘‘Petitions for the Imposition of Countervailing Duties on Imports of Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Consultations with Officials from the Government of China,’’ dated October 18, 2021. 19 See section 771(10) of the Act. 20 See USEC, Inc. v. United States, 132 F. Supp. 2d 1, 8 (CIT 2001) (citing Algoma Steel Corp., Ltd. v. United States, 688 F. Supp. 639, 644 (CIT 1988), aff’d 865 F.2d 240 (Fed. Cir. 1989)). 21 See Petition at Volume I at 16–21 and Exhibits I–4, I–7, and I–15; see also First General Issues Supplement at 10–11; and Second General Issues Supplement at 6–7. 22 For a discussion of the domestic like product analysis as applied to this case and information regarding industry support, see Checklist, ‘‘Countervailing Duty Investigation Initiation Checklist: Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated concurrently with this Federal Register notice (China CVD Initiation Checklist) at Attachment II, Analysis of Industry Support for the Antidumping and Countervailing Duty Petitions Covering Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China (Attachment II). 23 See Petition at Volume I at 3–4; see also First General Issues Supplement at 8–10 and Exhibit I– Supp–2; and Second General Issues Supplement at 4–5. 24 See Petition at Volume I at 3–4 and Exhibit I– 5; see also First General Issues Supplement at 9– 10 and Exhibit I–Supp–2; and Second General Issues Supplement at 5 and Exhibit I–2Supp–2. 25 See Petition at Volume I at 3–4 and Exhibit I– 5; see also First General Issues Supplement at 8– 10 and Exhibit I–Supp–2; and Second General Issues Supplement at 5. 26 See Petition at Volume I at 2–4 and Exhibits I– 3 through I–5; see also First General Issues Supplement at 7–10 and Exhibits I–Supp–2 and I– Supp–3; and Second General Issues Supplement at 4–5 and Exhibit I–2Supp–2. 27 See Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Request for Department to Deny the Petitions for Imposition of Duties Filed by the Coalition of Freight Coupler Producers as Legally Infirm,’’ dated October 7, 2021. 28 See Petitioner’s Letter, ‘‘Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Wabtec,’’ dated October 8, 2021 (Petitioner Letter I). 29 See Wabtec’s Letter, ‘‘Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China: Reply in Support of Request for Department to Deny the Petitions for Imposition of Duties Filed by the Coalition of Freight Coupler Producers,’’ dated October 12, 2021. 30 See Strato’s Letter, ‘‘Strato Support for Rejecting Petition: Antidumping & Countervailing Duty Investigation of Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China,’’ dated October 13, 2021. 31 See Petitioner’s Letter, ‘‘Freight Rail Car Coupler Systems and Certain Components Thereof from the People’s Republic of China: Response to Strato and Wabtec,’’ dated October 14, 2021 (Petitioner Letter II). Electronic Service System (ACCESS), unless an exception applies.15 An electronically filed document must be received successfully in its entirety by the time and date it is due. Consultations Pursuant to sections 702(b)(4)(A)(i) and (ii) of the Act, Commerce notified the GOC of the receipt of the Petition and provided it the opportunity for consultations with respect to the CVD Petition.16 The GOC requested consultations, 17 which were held via video conference on October 18, 2021.18 Determination of Industry Support for the Petition Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, Commerce shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the ‘‘industry.’’ Section 771(4)(A) of the Act defines the ‘‘industry’’ as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs Commerce to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether ‘‘the domestic industry’’ has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both Commerce and the ITC must apply the same statutory definition regarding the domestic like product,19 they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce’s determination is subject to limitations of time and information. Although this may result in different definitions of the like product, such differences do not render the decision of either agency contrary to law.20 Section 771(10) of the Act defines the domestic like product as ‘‘a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.’’ Thus, the reference point from which the domestic like product analysis begins is ‘‘the article subject to an investigation’’ (i.e., the class or kind of merchandise to be investigated, which normally will be the scope as defined in the petition). With regard to the domestic like product, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigation. 21 Based on our analysis of the information submitted on the record, we have determined that freight rail couplers, as defined in the scope, constitute a single domestic like product, and we have analyzed industry support in terms of that domestic like product.22 In determining whether the petitioner has standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the ‘‘Scope of the Investigation,’’ in the appendix to this notice. To establish industry support, the petitioner provided its own production of freight rail couplers in 2020.23 The petitioner estimated production for the only other known producer of freight rail couplers in the United States. 24 The petitioner compared its production to the estimated total 2020 production of the domestic like product for the entire domestic industry.25 We relied on data provided by the petitioner for purposes of measuring industry support.26 On October 7, 2021, we received comments on industry support from Wabtec Corporation (Wabtec), a U.S. importer of freight rail couplers. 27 On October 8, 2021, the petitioner responded to the comments from Wabtec. 28 On October 12, 2021, we received additional comments from Wabtec. 29 On October 13, 2021, we received comments on industry support from Strato, Inc. (Strato), a U.S. importer of freight rail couplers. 30 On October 14, 2021, the petitioner responded to the comments from Strato and Wabtec.31 VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00022 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58881Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 32 See China CVD Initiation Checklist at Attachment II. 33 Id.; see also section 702(c)(4)(D) of the Act. 34 See China CVD Initiation Checklist at Attachment II. 35 Id. 36 Id. 37 See Petition at Volume I at 27 and Exhibit I– 27. 38 Id. at 14–16, 22–44 and Exhibits I–3 through I– 5, I–11, I–13, I–14, and I–17 through I–47; see also First General Issues Supplement at 11–13 and Exhibit I–Supp–3. 39 See China CVD Initiation Checklist at Attachment III, Analysis of Allegations and Evidence of Material Injury and Causation for the Antidumping and Countervailing Duty Petitions Covering Certain Freight Rail Coupler Systems and Components Thereof from the People’s Republic of China. 40 See Petition at Volume I at Exhibit I–10. Our review of the data provided in the Petition, the First General Issues Supplement, the Second General Issues Supplement, Petitioner Letters I and II, and other information readily available to Commerce indicates that the petitioner has established industry support for the Petition.32 First, the Petition established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support (e.g., polling).33 Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petition account for at least 25 percent of the total production of the domestic like product. 34 Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 702(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petition.35 Accordingly, Commerce determines that the Petition was filed on behalf of the domestic industry within the meaning of section 702(b)(1) of the Act.36 Injury Test Because China is a ‘‘Subsidies Agreement Country’’ within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from China materially injure, or threaten material injury to, a U.S. industry. Allegations and Evidence of Material Injury and Causation The petitioner alleges that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports threaten to cause material injury to the U.S. industry producing the domestic like product. In addition, the petitioner alleges that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.37 The petitioner contends that the industry’s injured condition is illustrated by a significant volume of subject imports; reduced market share; underselling and price depression and/ or suppression; lost sales and revenues; declines in production, U.S. shipments, and capacity utilization; decline in employment; and decline in financial performance. 38 We assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as negligibility, and we have determined that these allegations are properly supported by adequate evidence and meet the statutory requirements for initiation.39 Initiation of CVD Investigation Based upon our examination of the Petition and supplemental responses, we find that the Petition meets the requirements of section 702 of the Act. Therefore, we are initiating a CVD investigation to determine whether imports of freight rail couplers from China benefit from countervailable subsidies conferred by the GOC. Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on 33 of the 35 alleged programs. Additionally, we find that there is sufficient information to initiate on the allegation of the creditworthiness of CRRC Corporation Limited (CRRC) and will explore this allegation in the investigation should CRRC be selected as a mandatory respondent. For a full discussion of the basis for our decision to initiate on each program, see China CVD Initiation Checklist. The initiation checklist for this investigation is available on ACCESS. In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determination no later than 65 days after the date of this initiation. Respondent Selection The petitioner named eight companies in China as producers and/ or exporters of freight rail couplers.40 Commerce intends to follow its standard practice in CVD investigations and calculate company-specific subsidy rates in this investigation. In the event that Commerce determines that the number of companies is large and it cannot individually examine each company based upon Commerce’s resources, where appropriate, Commerce intends to select mandatory respondents based on quantity and value (Q&V) questionnaires issued to the potential respondents. Commerce normally selects mandatory respondents in CVD investigations using U.S. Customs and Border Protection (CBP) entry data for U.S. imports under the appropriate Harmonized Tariff Schedule of the United States (HTSUS) subheadings listed in the scope of the investigation. However, for this investigation, one of the HTSUS subheadings under which the subject merchandise would enter (i.e., 8607.30.1000) is a basket category under which non-subject merchandise may enter. Therefore, we cannot rely on CBP entry data in selecting respondents. We intend instead to issue Q&V questionnaires to each potential respondent for which the petitioner has provided a complete address. Producers/exporters of freight rail couplers from China that do not receive Q&V questionnaires by mail may still submit a response to the Q&V questionnaire and can obtain the Q&V questionnaire from E&C’s website at https://enforcement.trade.gov/ questionnaires/questionnaires-ad.html. Responses to the Q&V questionnaire must be submitted by the relevant Chinese producers/exporters no later than 5:00 p.m. ET on November 2, 2021. All Q&V responses must be filed electronically via ACCESS. An electronically filed document must be received successfully, in its entirety, by ACCESS no later than 5:00 p.m. ET on the deadline noted above. Interested parties must submit applications for disclosure under Administrative Protective Order (APO) in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on E&C’s website at http://enforcement.trade.gov/apo. Commerce intends to finalize its decisions regarding respondent selection within 20 days of publication of this notice. Distribution of Copies of the Petition In accordance with section 702(b)(4)(A) of the Act and 19 CFR 351.202(f), a copy of the public version VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00023 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58882 Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 41 See section 703(a)(1) of the Act. 42 Id. 43 See 19 CFR 351.301(b). 44 See 19 CFR 351.301(b)(2). 45 See 19 CFR 351.302. 46 See 19 CFR 351; see also Extension of Time Limits; Final Rule, 78 FR 57790 (September 20, 2013) (Time Limits Final Rule), available at http:// www.gpo.gov/fdsys/pkg/FR-2013-09-20/html/2013- 22853.htm. 47 See section 782(b) of the Act. 48 See Certification of Factual Information to Import Administration During Antidumping and Countervailing Duty Proceedings, 78 FR 42678 (July 17, 2013) (Final Rule); see also frequently asked questions regarding the Final Rule, available at http://enforcement.trade.gov/tlei/notices/factual_ info_final_rule_FAQ_07172013.pdf. 49 See Antidumping and Countervailing Duty Proceedings: Documents Submission Procedures; APO Procedures, 73 FR 3634 (January 22, 2008). 50 See Temporary Rule Modifying AD/CVD Service Requirements Due to COVID–19; Extension of Effective Period, 85 FR 41363 (July 10, 2020). of the Petition has been provided to the GOC via ACCESS. Furthermore, to the extent practicable, Commerce will attempt to provide a copy of the public version of the Petition to each exporter named in the Petition, as provided under 19 CFR 351.203(c)(2). ITC Notification Commerce will notify the ITC of its initiation, as required by section 702(d) of the Act. Preliminary Determination by the ITC The ITC will preliminarily determine, within 45 days after the date on which the Petition was filed, whether there is a reasonable indication that imports of freight rail couplers from China are materially injuring, or threatening material injury to, a U.S. industry.41 A negative ITC determination will result in the investigation being terminated.42 Otherwise, this investigation will proceed according to statutory and regulatory time limits. Submission of Factual Information Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)–(iv). Section 351.301(b) of Commerce’s regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted 43 and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. 44 Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in this investigation. Extensions of Time Limits Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301.45 For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, Commerce may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, Commerce will inform parties in a letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely- filed requests for the extension of time limits. Parties should review Commerce’s regulations concerning the extension of time limits and the Time Limits Final Rule prior to submitting extension requests or factual information in this investigation.46 Certification Requirements Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information. 47 Parties must use the certification formats provided in 19 CFR 351.303(g). 48 Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements. Notification to Interested Parties Interested parties must submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305. Parties wishing to participate in this investigation should ensure that they meet the requirements of document submission procedures (e.g., the filing of letters of appearance as discussed at 19 CFR 351.103(d)). 49 Note that Commerce has temporarily modified certain of its requirements for serving documents containing business proprietary information, until further notice.50 This notice is issued and published pursuant to sections 702 and 777(i) of the Act, and 19 CFR 351.203(c). Dated: October 19, 2021. Ryan Majerus, Deputy Assistant Secretary for Policy and Negotiations, performing the non-exclusive functions and duties of the Assistant Secretary for Enforcement and Compliance. Appendix—Scope of the Investigation The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items (e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non-subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non-subject merchandise, such as other non-subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non-subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M–211, ‘‘Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts’’ or AAR M–215 ‘‘Coupling Systems,’’ or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00024 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 58883Federal Register / Vol. 86, No. 203 / Monday, October 25, 2021 / Notices 1 See Polyester Textured Yarn from Thailand: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures, 86 FR 29746 (June 3, 2021) (Preliminary Determination), and accompanying Preliminary Decision Memorandum (PDM). 2 See Memorandum, ‘‘Decision Memorandum for the Final Affirmative Determination in the Less- Than-Fair-Value Investigation of Polyester Textured Yarn from Thailand,’’ dated concurrently with, and hereby adopted by, this notice (Issues and Decision Memorandum). 3 See Memorandum, ‘‘Antidumping Duty Investigations of Polyester Textured Yarn from Indonesia, Malaysia, Thailand, and Vietnam: Preliminary Scope Decision Memorandum,’’ dated May 26, 2021 (Preliminary Scope Decision Memorandum). 4 The scope case briefs were due ‘‘no later than 15 days after the responses to the scope supplemental questionnaires on intermingled textured yarn are filed.’’ Id. at 3. The last scope supplemental response was submitted on June 24, 2021. See Recron (Malaysia) Sdn. Bhd.’s Letter, ‘‘Scope Supplemental Questionnaire Response,’’ dated June 24, 2021. No information was provided in the responses to the scope supplemental questionnaires that was sufficient for us to revise our findings in the Preliminary Scope Decision Memorandum. 5 See Commerce’s Letter, ‘‘Antidumping Duty (AD) In Lieu of Verification Questions,’’ dated July 6, 2021, and Sunflag’s Letter, ‘‘Polyester Textured Yarn from Thailand: Response to the In Lieu of Verification Questionnaire,’’ dated July 14, 2021. 6 See Preliminary Determination PDM at 2. assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non-subject components with subject components or coupler systems either in the country of manufacture of the in-scope product or in a third country does not remove the subject components or coupler systems from the scope. The coupler systems that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) statistical reporting number 8607.30.1000. Unfinished subject merchandise may also enter under HTSUS statistical reporting number 7326.90.8688. Subject merchandise attached to finished rail cars may also enter under HTSUS statistical reporting numbers 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, 8606.99.0160, or under subheading 9803.00.5000 if imported as an Instrument of International Traffic. These HTSUS subheadings are provided for convenience and customs purposes only; the written description of the scope of the investigation is dispositive. [FR Doc. 2021–23232 Filed 10–22–21; 8:45 am] BILLING CODE 3510–DS–P DEPARTMENT OF COMMERCE International Trade Administration [A–549–843] Polyester Textured Yarn From Thailand: Final Affirmative Determination of Sales at Less Than Fair Value AGENCY : Enforcement and Compliance, International Trade Administration, Department of Commerce. SUMMARY : The Department of Commerce (Commerce) determines that polyester textured yarn from Thailand is being, or is likely to be, sold in the United States at less than fair value (LTFV). The period of investigation is October 1, 2019, through September 30, 2020. DATES : Applicable October 25, 2021. FOR FURTHER INFORMATION CONTACT : Stephanie Berger, AD/CVD Operations, Office III, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482–2483. SUPPLEMENTARY INFORMATION : Background On June 3, 2021, Commerce published its Preliminary Determination.1 Commerce invited interested parties to comment on the Preliminary Determination. For a complete description of the events that followed the Preliminary Determination, see the Issues and Decision Memorandum. 2 The Issues and Decision Memorandum is a public document and is available electronically via Enforcement and Compliance’s Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at https:// access.trade.gov. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at https://access.trade.gov/public/ FRNoticesListLayout.aspx. Scope Comments On May 26, 2021, we issued the Preliminary Scope Decision Memorandum. 3 The scope case briefs were due on July 9, 2021.4 We did not receive any scope case briefs from interested parties. Therefore, Commerce has not made any changes to the scope of this investigation since the Preliminary Determination. Scope of the Investigation The product covered by this investigation is polyester textured yarn from Thailand. For a complete description of the scope of this investigation, see Appendix I. Verification Commerce was unable to conduct on- site verification of the information relied upon in making its final determination in this investigation. However, we took additional steps in lieu of an on-site verification to verify the information relied upon in making this final determination, in accordance with section 782(i) of the Tariff Act of 1930, as amended (the Act).5 Analysis of Comments Received All issues raised in the case and rebuttal briefs by parties in this investigation are discussed in the Issues and Decision Memorandum. A list of the issues raised in the Issues and Decision Memorandum is attached to this notice as Appendix II. Changes From the Preliminary Determination Based on our analysis of the comments received, we made certain changes to the margin calculation for Sunflag Thailand Ltd. (Sunflag) since the Preliminary Determination. See the Issues and Decision Memorandum for a discussion of these changes. Use of Adverse Facts Available The mandatory respondent Jong Stit Co., Ltd. (Jong Stit) did not respond to Commerce’s initial antidumping duty questionnaire in this investigation. 6 Therefore, in the Preliminary Determination, pursuant to sections 776(a) and 776(b) of the Act, we assigned to Jong Stit the highest Petition margin based on adverse facts available (AFA). No party filed comments concerning the Preliminary Determination with respect to Jong Stit, and there is no new information on the record that would cause us to revisit the Preliminary Determination. Accordingly, we continue to find that the application of AFA pursuant to sections 776(a) and (b) of the Act is warranted with respect to Jong Stit. Consistent with the Preliminary Determination, Commerce has assigned to Jong Stit the highest Petition margin, which is 56.80 percent. For further information, see the section ‘‘Application of Facts Available and Use of Adverse Inferences’’ in the Preliminary Determination PDM. All-Others Rate Section 735(c)(5)(A) of the Act provides that the estimated weighted- VerDate Sep<11>2014 18:00 Oct 22, 2021 Jkt 256001 PO 00000 Frm 00025 Fmt 4703 Sfmt 4703 E:\FR\FM\25OCN1.SGM 25OCN1 jspears on DSK121TN23PROD with NOTICES1 ──────────────────────────────────────────────────────────── === USITC Determination - Preliminary === 64958 Federal Register / Vol. 86, No. 221 / Friday, November 19, 2021 / Notices 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 86 FR 58864 (October 25, 2021) and 86 FR 58878 (October 25, 2021). 3 Initially, Petitioner was M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 86 FR 54152, 86 FR 54157, 86 FR 54154, and 86 FR 54162 (September 30, 2021). 3 The Commission also finds that imports subject to Commerce’s affirmative critical circumstances determinations are not likely to undermine seriously the remedial effect of the antidumping duty orders on Germany and Korea. Issued: November 15, 2021. Lisa Barton, Secretary to the Commission. [FR Doc. 2021–25234 Filed 11–18–21; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 701–TA–670 and 731– TA–1570 (Preliminary)] Freight Rail Coupler Systems and Components From China Determinations On the basis of the record 1 developed in the subject investigations, the United States International Trade Commission (‘‘Commission’’) determines, pursuant to the Tariff Act of 1930 (‘‘the Act’’), that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of freight rail coupler systems and components from China, provided for in subheading 8607.30.10 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value (‘‘LTFV’’) and to be subsidized by the government of China. 2 Commencement of Final Phase Investigations Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the Federal Register as provided in § 207.21 of the Commission’s rules, upon notice from the U.S. Department of Commerce (‘‘Commerce’’) of affirmative preliminary determinations in the investigations under §§ 703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of affirmative final determinations in those investigations under §§ 705(a) or 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the investigations need not enter a separate appearance for the final phase of the investigations. Industrial users, and, if the merchandise under investigation is sold at the retail level, representative consumer organizations have the right to appear as parties in Commission antidumping and countervailing duty investigations. The Secretary will prepare a public service list containing the names and addresses of all persons, or their representatives, who are parties to the investigations. Background On September 29, 2021, the Coalition of Freight Coupler Producers consisting of McConway & Torley LLC (‘‘M&T’’), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (‘‘USW’’) filed petitions with the Commission and Commerce, 3 alleging that an industry in the United States is materially injured or threatened with material injury by reason of subsidized imports of freight rail coupler systems and components from China and LTFV imports of freight rail coupler systems and components from China. Accordingly, effective September 29, 2021, the Commission instituted countervailing duty investigation No. 701–TA–670 and antidumping duty investigation No. 731–TA–1570 (Preliminary). Notice of the institution of the Commission’s investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of October 5, 2021 (86 FR 54997). In light of the restrictions on access to the Commission building due to the COVID–19 pandemic, the Commission conducted its conference through written testimony and video conference on October 20, 2021. All persons who requested the opportunity were permitted to participate. The Commission made these determinations pursuant to §§ 703(a) and 733(a) of the Act (19 U.S.C. 1671b(a) and 1673b(a)). It completed and filed its determinations in these investigations on November 15, 2021. The views of the Commission are contained in USITC Publication 5243 (November 2021), entitled Freight Rail Coupler Systems and Components from China: Investigation Nos. 701–TA–670 and 731–TA–1570 (Preliminary). By order of the Commission. Issued: November 15, 2021. Lisa Barton, Secretary to the Commission. [FR Doc. 2021–25233 Filed 11–18–21; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation Nos. 731–TA–1546–1549 (Final)] Thermal Paper From Germany, Japan, Korea, and Spain Determinations On the basis of the record 1 developed in the subject investigations, the United States International Trade Commission (‘‘Commission’’) determines, pursuant to the Tariff Act of 1930 (‘‘the Act’’), that an industry in the United States is materially injured by reason of imports of thermal paper from Germany, Japan, Korea, and Spain, provided for in subheadings 4811.90.80 and 4811.90.90 (statistical reporting numbers 4811.90.8030 and 4811.90.9030) of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (‘‘Commerce’’) to be sold in the United States at less than fair value (‘‘LTFV’’).2 3 Background The Commission instituted these investigations effective October 7, 2020, following receipt of petitions filed with the Commission and Commerce by Appvion Operations, Inc. (Appleton, Wisconsin) and Domtar Corporation (Fort Mill, South Carolina). The Commission scheduled the final phase of the investigations following notification of preliminary determinations by Commerce that imports of thermal paper from Germany, Japan, Korea, and Spain were being sold at LTFV within the meaning of section 733(b) of the Act (19 U.S.C. 1673b(b)). Notice of the scheduling of the final phase of the Commission’s investigations and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of June 9, VerDate Sep<11>2014 18:31 Nov 18, 2021 Jkt 256001 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 E:\FR\FM\19NON1.SGM 19NON1 khammond on DSKJM1Z7X2PROD with NOTICES ──────────────────────────────────────────────────────────── === USITC PUB 5243 === U.S. International Trade Commission Publication 5243 November 2021 Washington, DC 20436 Freight Rail Coupler Systems and Components from China Investigation Nos. 701-TA-670 and 731-TA-1570 (Preliminary) U.S. International Trade Commission COMMISSIONERS Jason E. Kearns, Chair Randolph J. Stayin, Vice Chair David S. Johanson Rhonda K. Schmidtlein Amy A. Karpel Catherine DeFilippo Staff assigned Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 Director of Operations Stamen Borisson, Investigator Mitchell A. Semanik, Industry Analyst Kyle Westmoreland, Economist Zahra Bekkal, Accountant Lita David‐Harris, Statistician David Goldfine, Attorney Elizabeth Haines, Supervisory Investigator U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Publication 5243 November 2021 Freight Rail Coupler Systems and Components from China Investigation Nos. 701-TA-670 and 731-TA-1570 (Preliminary) CONTENTS Page i Determinations ............................................................................................................................. 1 Views of the Commission ............................................................................................................. 3 Part I: Introduction ................................................................................................................ I‐1 Background ............................................................................................................................. I‐1 Statutory criteria ..................................................................................................................... I‐2 Organization of report ............................................................................................................. I‐3 Market summary ..................................................................................................................... I‐3 Summary data and data sources ............................................................................................. I‐4 Previous and related investigations......................................................................................... I‐4 Nature and extent of alleged subsidies and sales at LTFV ....................................................... I‐4 Alleged subsidies ................................................................................................................. I‐4 Alleged sales at LTFV............................................................................................................ I‐5 The subject merchandise......................................................................................................... I‐5 Commerce’s scope ............................................................................................................... I‐5 Tariff treatment ................................................................................................................... I‐6 Section 301 tariff treatment ................................................................................................ I‐6 The product ............................................................................................................................. I‐7 Description and applications ............................................................................................... I‐7 Manufacturing processes................................................................................................... I‐11 Domestic like product issues ................................................................................................. I‐12 Intermediate products........................................................................................................... I‐17 CONTENTS Page ii Part II: Conditions of competition in the U.S. market............................................................ II‐1 U.S. market characteristics ..................................................................................................... II‐1 Channels of distribution ......................................................................................................... II‐2 Geographic distribution .......................................................................................................... II‐3 Impact of section 301 tariffs ................................................................................................... II‐4 Supply and demand considerations........................................................................................ II‐5 U.S. supply .......................................................................................................................... II‐5 U.S. demand ....................................................................................................................... II‐7 Substitutability issues ........................................................................................................... II‐11 Factors affecting purchasing decisions ............................................................................. II‐11 Comparison of U.S.‐produced and imported FRC ............................................................. II‐13 Part III: U.S. producers’ production, shipments, and employment ....................................... III‐1 U.S. producers ....................................................................................................................... III‐1 U.S. production, capacity, and capacity utilization ................................................................ III‐3 Alternative products .......................................................................................................... III‐6 U.S. producers’ U.S. shipments and exports .......................................................................... III‐7 U.S. producers’ inventories ................................................................................................... III‐9 U.S. producers’ imports and purchases ............................................................................... III‐10 U.S. employment, wages, and productivity ......................................................................... III‐11 Part IV: U.S. imports, apparent U.S. consumption, and market shares................................ IV‐1 U.S. importers....................................................................................................................... IV‐1 U.S. imports .......................................................................................................................... IV‐2 Negligibility ........................................................................................................................... IV‐6 Apparent U.S. consumption and market shares ................................................................... IV‐7 CONTENTS Page iii Part V: Pricing data ............................................................................................................... V‐1 Factors affecting prices.......................................................................................................... V‐1 Raw material costs ............................................................................................................. V‐1 Transportation costs to the U.S. market ............................................................................ V‐3 U.S. inland transportation costs......................................................................................... V‐3 Pricing practices .................................................................................................................... V‐3 Pricing methods ................................................................................................................. V‐3 Sales terms and discounts ................................................................................................. V‐5 Price data .............................................................................................................................. V‐6 Price trends...................................................................................................................... V‐15 Price comparisons ............................................................................................................ V‐17 Lost sales and lost revenue.................................................................................................. V‐17 Part VI: Financial experience of U.S. producers.................................................................... VI‐1 Background .......................................................................................................................... VI‐1 Operations on FRC ................................................................................................................ VI‐2 Net sales ......................................................................................................................... VI‐11 Cost of goods sold and gross profit or loss ..................................................................... VI‐14 SG&A expenses and operating income or loss ................................................................ VI‐16 All other expenses and net income or loss ..................................................................... VI‐16 Capital expenditures and research and development expenses ........................................ VI‐17 Assets and return on assets ................................................................................................ VI‐18 Capital and investment....................................................................................................... VI‐19 CONTENTS Page iv Part VII: Threat considerations and information on nonsubject countries .......................... VII‐1 The industry in China ........................................................................................................... VII‐3 Changes in operations ..................................................................................................... VII‐4 Operations on FRC ........................................................................................................... VII‐4 Alternative products ........................................................................................................ VII‐7 Exports ............................................................................................................................. VII‐8 U.S. inventories of imported merchandise ........................................................................ VII‐10 U.S. importers’ outstanding orders ................................................................................... VII‐11 Third‐country trade actions ............................................................................................... VII‐11 Information on nonsubject countries ................................................................................ VII‐11 Appendixes A. Federal Register notices................................................................................................ A‐1 B. List of staff conference witnesses ................................................................................. B‐1 C. Summary data............................................................................................................... C‐1 D. Freight railcar deliveries in North America ................................................................... D‐1 E. U.S. shipments by product type .................................................................................... E‐1 F. Steel scrap prices by source .......................................................................................... F‐1 Note.—Information that would reveal confidential operations of individual concerns may not be published. Such information is identified by brackets in confidential reports and is deleted and replaced with asterisks (***) in public reports. UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation Nos. 701‐TA‐670 and 731‐TA‐1570 (Preliminary) Freight Rail Coupler Systems and Components from China DETERMINATIONS On the basis of the record 1 developed in the subject investigations, the United States International Trade Commission (“Commission”) determines, pursuant to the Tariff Act of 1930 (“the Act”), that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of freight rail coupler systems and components from China, provided for in subheading 8607.30.10 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value (“LTFV”) and to be subsidized by the government of China.2 COMMENCEMENT OF FINAL PHASE INVESTIGATIONS Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the Federal Register as provided in § 207.21 of the Commission’s rules, upon notice from the U.S. Department of Commerce (“Commerce”) of affirmative preliminary determinations in the investigations under §§ 703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of affirmative final determinations in those investigations under §§ 705(a) or 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the investigations need not enter a separate appearance for the final phase of the investigations. Industrial users, and, if the merchandise under investigation is sold at the retail level, representative consumer organizations have the right to appear as parties in Commission antidumping and countervailing duty investigations. The Secretary will prepare a public service list containing the names and addresses of all persons, or their representatives, who are parties to the investigations. 1 The record is defined in § 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR 207.2(f)). 2 86 FR 58864 (October 25, 2021) and 86 FR 58878 (October 25, 2021). BACKGROUND On September 29, 2021, the Coalition of Freight Coupler Producers consisting of McConway & Torley LLC (“M&T”), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL‐ CIO, CLC (“USW”) filed petitions with the Commission and Commerce,3 alleging that an industry in the United States is materially injured or threatened with material injury by reason of subsidized imports of freight rail coupler systems and components from China and LTFV imports of freight rail coupler systems and components from China. Accordingly, effective September 29, 2021, the Commission instituted countervailing duty investigation No. 701‐TA‐670 and antidumping duty investigation No. 731‐TA‐1570 (Preliminary). Notice of the institution of the Commission’s investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of October 5, 2021 (86 FR 54997). In light of the restrictions on access to the Commission building due to the COVID–19 pandemic, the Commission conducted its conference through written testimony and video conference on October 20, 2021. All persons who requested the opportunity were permitted to participate. 3 Initially, Petitioner was M&T and another domestic producer. However, the other domestic producer withdrew, and USW was added to the petitions. 3 Views of the Commission Based on the record in the preliminary phase of these investigations, we determine that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of freight rail coupler systems and certain components thereof (“FRCs”) from China that are allegedly sold in the United States at less than fair value and that are allegedly subsidized by the government of China. I. The Legal Standard for Preliminary Determinations The legal standard for preliminary antidumping and countervailing duty determinations requires the Commission to determine, based upon the information available at the time of the preliminary determinations, whether there is a reasonable indication that a domestic industry is materially injured or threatened with material injury, or that the establishment of an industry is materially retarded, by reason of the allegedly unfairly traded imports. 1 In applying this standard, the Commission weighs the evidence before it and determines whether “(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation.”2 II. Background The petitioner, the Coalition of Freight Rail Coupler Producers (“Petitioner” or “the Coalition”), filed the petitions in these investigations on September 29, 2021. Petitioner consists of McConway and Torley, LLC (“M&T”), a U.S. producer of FRCs, and the United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL‐CIO, CLC (“the USW”).3 Representatives for Petitioner submitted 1 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d 994, 1001‐04 (Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354‐55 (1996). No party argues that the establishment of an industry in the United States is materially retarded by the allegedly unfairly traded imports. 2 American Lamb Co., 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543 (Fed. Cir. 1994). 3 Initially, Petitioner was M&T and another domestic producer, Amsted Rail Co., Inc. (“Amsted”). However, Amsted withdrew as a petitioner and a union, the USW, was added to the petitions. In 2020 M&T accounted for *** of U.S. production of FRCs, i.e., *** percent, whereas Amsted accounted for ***, i.e., *** percent. CR/PR at Table III‐1. 4 testimony and appeared at the staff conference accompanied by counsel. Petitioner also submitted a postconference brief. Three respondent entities actively participated in these investigations. Strato, Inc. (“Strato”), a U.S. importer of subject merchandise from China, submitted testimony and appeared at the staff conference accompanied by counsel and submitted a postconference brief. Wabtec Corporation (“Wabtec”), another U.S. importer of subject merchandise from China, also submitted testimony and appeared at the staff conference accompanied by counsel and submitted a postconference brief. TTX Company (“TTX”), a U.S. purchaser of FRCs, submitted a postconference brief. U.S. industry data are based on the questionnaire responses of three firms accounting for virtually all U.S. production of FRCs in 2020. 4 U.S. import data are based on the questionnaire responses from five U.S. importers, accounting for approximately *** percent of imports from China in 2020 under Harmonized Tariff Schedule (“HTS”) statistical reporting number 8607.30.1000. 5 Foreign industry data and related information are based on the questionnaire responses of two producers/exporters of FRCs in China accounting for approximately *** percent of FRC production in China in 2020 and approximately *** percent of U.S. imports of subject merchandise from China in 2020. 6 III. Domestic Like Product In determining whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of the subject merchandise, the Commission first defines the “domestic like product” and the “industry.”7 Section 771(4)(A) of the Tariff Act of 1930, as amended (“the Tariff Act”), defines the relevant domestic industry as the “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product.” 8 In turn, the Tariff Act defines 4 Confidential Report (“CR”) at I‐4, INV‐TT‐127 (Nov. 8, 2021); and Freight Rail Couple Systems and Certain Components thereof from China, Inv. Nos. 701‐TA‐670 and 731‐TA‐1570 (Final), USITC Pub. 5243 (Nov. 2021) (“PR”) at I‐4. 5 CR/PR at IV‐1. HTS subheading 8607.30.1000 is a “basket” category that contains out‐of‐scope merchandise; thus, we have not relied on official import statistics to measure imports of FRCs. Id. 6 CR/PR at VII‐3. 7 19 U.S.C. § 1677(4)(A). 8 19 U.S.C. § 1677(4)(A). 5 “domestic like product” as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation.”9 By statute, the Commission’s “domestic like product” analysis begins with the “article subject to an investigation,” i.e., the subject merchandise as determined by the U.S. Department of Commerce (“Commerce”).10 Therefore, Commerce’s determination as to the scope of the imported merchandise that is subsidized and/or sold at less than fair value is “necessarily the starting point of the Commission’s like product analysis.” 11 The Commission then defines the domestic like product in light of the imported articles Commerce has identified.12 The decision regarding the appropriate domestic like product(s) in an investigation is a factual determination, and the Commission has applied the statutory standard of “like” or “most similar in characteristics and uses” on a case‐by‐case basis. 13 No single factor is dispositive, and the Commission may consider other factors it deems relevant based on the facts of a particular investigation. 14 The Commission looks for clear dividing lines among 9 19 U.S.C. § 1677(10). 10 19 U.S.C. § 1677(10). The Commission must accept Commerce’s determination as to the scope of the imported merchandise that is subsidized and/or sold at less than fair value. See, e.g., USEC, Inc. v. United States, 34 Fed. App’x 725, 730 (Fed. Cir. 2002) (“The ITC may not modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v. United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S. 919 (1989). 11 Cleo Inc. v. United States, 501 F.3d 1291, 1298 (Fed. Cir. 2007); see also Hitachi Metals, Ltd. v. United States, 949 F.3d 710, 717 (Fed. Cir. 2020) (the statute requires the Commission to start with Commerce’s subject merchandise in reaching its own like product determination). 12 Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like product} determination.”); Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission may find a single like product corresponding to several different classes or kinds defined by Commerce); Torrington Co. v. United States, 747 F. Supp. 744, 748‐52 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (affirming the Commission’s determination defining six like products in investigations where Commerce found five classes or kinds). 13 See, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v. Dep’t of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on the particular record at issue’ and the ‘unique facts of each case’”). The Commission generally considers a number of factors including the following: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) customer and producer perceptions of the products; (5) common manufacturing facilities, production processes, and production employees; and, where appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996). 14 See, e.g., S. Rep. No. 96‐249 at 90‐91 (1979). 6 possible like products and disregards minor variations.15 The Commission may, where appropriate, include domestic articles in the domestic like product in addition to those described in the scope. 16 A. Scope Definition In its notices of initiation, Commerce defined the imported merchandise within the scope of these investigations as: . . . freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items ( e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non‐subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non‐subject merchandise, such as other non‐subject system parts or a completed rail car. 17 Finishing 15 See, e.g., Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748‐49; see also S. Rep. No. 96‐249 at 90‐91 (Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as to permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are not ‘like’ each other, nor should the definition of ‘like product’ be interpreted in such a fashion as to prevent consideration of an industry adversely affected by the imports under consideration.”). 16 See, e.g., Pure Magnesium from China and Israel, Inv. Nos. 701‐TA‐403 and 731‐TA‐895‐96 (Final), USITC Pub. 3467 at 8 n.34 (Nov. 2001); Torrington, 747 F. Supp. at 748‐49 (holding that the Commission is not legally required to limit the domestic like product to the product advocated by the petitioner, co‐extensive with the scope). 17 Accordingly, FRCs produced in China and incorporated into completed freight railcars are within the scope of the investigation. This includes freight railcars assembled in third countries, e.g., Mexico, and imported into the United States during the POI. See CR/PR at II‐1 n.7 (Chinese origin FRCs assembled and attached to freight railcars in Mexico and exported to the U.S.). In any final phase investigations, the parties are invited to submit comments on the draft questionnaire concerning data collection for FRCs further processed in third countries and subsequently imported into the United (Continued…) 7 includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non‐subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M‐211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” or AAR M‐215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non‐subject components with subject components or coupler systems either in the country of manufacture of the in‐scope product or in a third country does not remove the subject components or coupler systems from the scope.18 FRCs are comprised of a system of four main metal components: (1) knuckles, (2) coupler bodies, (3) coupler yokes, and (4) follower blocks; in addition to ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors).19 The main components of FRCs are manufactured in accordance with the Association of American (…Continued) States. In any final phase investigations, we will strive to ensure that such in‐scope FRCs produced in China and incorporated into finished railcars in third countries (including Mexico) are accurately and fully reported. In this regard, in any final phase investigations, the Commission invites the parties to submit comments addressing whether there is a perceived need for verification of data relating to such further processed FRCs. 18 Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Less‐Than‐Fair‐Value Investigation, 86 Fed. Reg. 58864, 58869 (Oct. 25, 2021); Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Countervailing Duty Investigation, 86 Fed. Reg. 58878, 58882‐83 (Oct. 25, 2021). 19 CR/PR at I‐7. 8 Railroads (“AAR”) standards to ensure FRCs in the United States are interoperable.20 Knuckles are typically metal castings in the shape of a hook that pivot on a vertical hinge between a “locked” and “unlocked” position to be able to interlock with knuckles of adjacent FRCs.21 Coupler bodies are a metal casting that holds the knuckle and allows it to pivot.22 The coupler body fits within the coupler yoke, which is the metal casting that attaches the FRC to the freight car.23 The follower block is a rectangular piece of metal that separates the FRC with the adjacent draft gear of the freight car (designed to absorb some of the forces when connecting freight railcars).24 FRCs are designed to connect two freight cars together by automatically interlocking the knuckles of both FRCs when the freight cars are pushed together, eliminating the need for previously required and potentially dangerous manual input.25 A manually operated lever on the side of a freight car connects to the FRC and is used to unlock the FRC by lifting the knuckle pin, allowing the knuckles to release and the freight cars to be uncoupled. 26 Freight cars typically use two FRCs, one on each of the front and rear of the freight car, to allow for coupling additional freight cars together in greater numbers.27 In addition to interlocking freight cars together, FRCs are also designed to reduce shocks when freight cars are in transit or braking.28 FRCs and components are classified under the following AAR designations: type E, E/F, and F couplers, type E and F knuckles, type E and F yokes, and type E and F follower blocks.29 Type E couplers, knuckles, yokes, and follower blocks meet the basic standards set by AAR but do not have the additional features included in type F components.30 Additional type F features include interlocking wing pockets and lugs that reduce the likelihood of certain freight car derailments as well as reducing the gap between locked knuckles to improve freight car 20 CR/PR at I‐7. AAR standard M‐211 covers foundry and product approval requirements for the manufacture of couplers, coupler yokes, knuckles, follower blocks, and coupler parts. AAR standard M‐ 215 covers complete coupler systems. CR/PR at I‐7 n.10. 21 CR/PR at I‐7. 22 CR/PR at I‐7. 23 CR/PR at I‐7. 24 CR/PR at I‐7. 25 CR/PR at I‐7. 26 CR/PR at I‐7. 27 CR/PR at I‐7. 28 CR/PR at I‐7. 29 CR/PR at I‐8. 30 CR/PR at I‐8. 9 handling. 31 Type F couplers are typically used for freight cars transporting hazardous material. Type E/F couplers contain a basic type E knuckle and type F coupler body components. 32 B. Parties’ Arguments Petitioner’s Arguments. Petitioner argues that the Commission should define a single domestic like product consisting of all FRCs, coextensive with Commerce’s scope in these preliminary phase investigations.33 It maintains that there is a clear dividing line between in‐ scope FRCs and out‐of‐scope passenger rail coupler systems (“PRCs”).34 Employing the Commission’s semi‐finished product analysis, Petitioner also contends that in‐scope domestically produced FRC components are not a separate domestic like product from in‐scope domestically produced finished FRCs.35 Respondents’ Arguments. Strato and Wabtec do not object to Petitioner’s proposed domestic like product definition for purposes of these preliminary determinations.36 C. Analysis and Recommendation 1. FRCs Based on the current record, we define a single domestic like product consisting of all domestically produced FRCs coextensive with the scope for purposes of these preliminary phase investigations. Physical Characteristics and Uses. All domestically produced FRCs within the scope are made primarily from pig iron and scrap metal.37 Although there are some variations in terms of size and design, all domestically produced FRCs within the scope share the same basic overall shape, are generally produced to the same specifications and standards set by the AAR, and have common features, including knuckles, coupler bodies, coupler yokes, and follower 31 CR/PR at I‐8. 32 CR/PR at I‐8. 33 Petitioner’s Postconf. Br. at 6. 34 Petitioner’s Postconf. Br. at 6‐9. 35 Petitioner’s Postconf. Br. at 9‐11. 36 Conf. Tr. at 112 (Schutz); Wabtec Postconf. Br. at 7 n.4. TTX did not address how the Commission should define the domestic like product. 37 CR/PR at I‐11 & n.13; Petitioner’s Postconf. Br. at 7. 10 blocks.38 All domestically produced FRCs within the scope are used to connect and transport freight railcars.39 Petitioner maintains that out‐of‐scope PRCs are made to different specifications and industry standards than domestically produced in‐scope FRCs. 40 While the AAR sets the industry standards for FRCs, the American Public Transportation Association (“APTA”) sets the industry standards for PRCs.41 According to Petitioner, out‐of‐scope PRCs are manufactured to have substantially less slack than domestically produced in‐scope FRCs.42 Petitioner observes that out‐of‐scope PRCs are used to transport passenger rail or tramway cars and therefore have a different use than domestically produced FRCs within the scope that are used to transport freight railcars.43 In terms of physical characteristics and uses, both responding U.S. producers and all three responding U.S. importers reported that domestically produced in scope FRCs and out‐of‐scope PRCs are only “somewhat” or “never” comparable.44 Manufacturing Facilities, Production Processes, and Employees. All domestically produced FRCs within the scope are manufactured using the same general production process, which includes melting pig iron and scrap metal with a melt furnace, molding the various FRC components into their respective shapes, removing impurities, heat‐treating (including annealing and tempering designed to strengthen and harden the metal), grinding, shaping, painting, oiling, priming, safety testing, and assembly.45 Petitioner reports that it produces all in‐scope FRCs at the same facilities, using the same production processes and equipment, and the same employees.46 38 CR/PR at I‐7‐8 and Figures I‐1‐4; Petition at 17; Petitioner’s Postconf. Br. at 7; Conf. Tr. at 45 (Mautino). At the conference, a witness testifying on behalf of Petitioner stated that there are some variations in size with respect to the coupler bodies for domestically produced in‐scope FRCs, with the smallest coupler bodies measuring approximately 32 inches long, 12 inches wide, and 12 inches high and weighing in excess of 350 pounds and the largest coupler bodies measuring approximately 75 inches long, 12 inches wide, and 12 inches high and weighing approximately 600 pounds. Conf. Tr. at 44 (Mautino). 39 CR/PR at I‐3. 40 Petitioner’s Postconf. Br. at 7. 41 Petitioner’s Postconf. Br. at 7. 42 Petitioner’s Postconf. Br. at 7; Conf. Tr. at 49 (Mautino). 43 Petitioner’s Postconf. Br. at 7. 44 CR/PR at Table I‐2. 45 CR/PR at I‐11. 46 Petitioner’s Postconf. Br. at 9. 11 According to Petitioner, out‐of‐scope PRCs are produced using different manufacturing processes and employees than in‐scope FRCs, although an industry witness appearing on behalf of Petitioner testified at the conference that there is some overlap in terms of manufacturing processes between in‐scope FRCs and out‐of‐scope PRCs and that he was aware of one facility where both in‐scope and out‐of‐scope FRCs are manufactured.47 With respect to manufacturing facilities, production processes, and employees, one of two responding U.S. producers reported that in‐scope FRCs and out‐of‐scope PRCs are “mostly” comparable while the other responding U.S. producer reported that they are “never” comparable.48 Two of three responding U.S. importers reported that in‐scope FRCs and out‐of‐scope FRCs are only “somewhat” or “never” comparable while one importer reported that they are “mostly” comparable.49 Channels of Distribution. U.S. producers sell FRCs through two main channels of distribution. 50 The first is to freight car original equipment manufacturers (“OEMs”) that use FRCs in new freight car production. 51 The second is to maintenance companies, freight railroads, and freight car producers that use FRCs and individual components as replacement parts in used freight cars. 52 During 2018‐2019, domestically produced FRCs within the scope were sold mainly to the OEM sector (ranging from *** percent to *** percent) with the remainder sold to the maintenance/replacement sector (ranging from *** percent to *** percent).53 In contrast, during 2020‐interim 2021, domestically produced FRCs within the scope were sold mainly to the maintenance/replacement sector (ranging from *** percent to *** percent) with the remainder sold to the OEM sector (ranging from *** percent to *** percent.54 According to Petitioner, out‐of‐scope PRCs are sold in different channels of distribution than in‐scope FRCs.55 For channels of distribution, one of two responding U.S. producers 47 Petition at 19; Petitioner’s Postconf. Br. 9; Conf. Tr. at 50‐51 (Mautino). 48 CR/PR at Table I‐2. 49 CR/PR at Table I‐2. 50 CR/PR at I‐11. 51 CR/PR at I‐11. 52 CR/PR at I‐11. 53 CR/PR at Table II‐1. 54 CR/PR at Table II‐1. 55 Petitioner’s Postconf. Br. at 8. Petitioner states that there is little overlap between the freight railcar manufacturers to which in‐scope FRCs are sold and passenger railcar manufacturers to which out‐ (Continued…) 12 reported that in‐scope FRCs and out‐of‐scope PRCs are “mostly” comparable while the other responding U.S. producer reported that they are “never” comparable.56 Two of three responding U.S. importers reported that in‐scope FRCs and out‐of‐scope FRCs are “mostly” comparable while one importer reported that they are only “somewhat” comparable.57 Interchangeability. According to Petitioner, all domestically produced FRCs within the scope are generally interchangeable since they are produced to the same dimensions, specifications, and standards.58 Petitioner maintains that domestically produced in‐scope FRCs and out‐of‐scope PRCs are not interchangeable. 59 At the conference, a witness testifying on behalf of Petitioner stated that PRCs typically have different body structures and draft systems with less crash cushion energy than FRCs and that PRCs cannot be used instead of FRCs for freight railcars.60 Petitioner also maintains that it would be against industry standards to use in‐ scope FRCs and out‐of‐scope PRCs as interchangeable products.61 In terms of interchangeability, both responding U.S. producers and all three responding U.S. importers reported that in‐scope FRCs and out‐of‐scope PRCs are “never” interchangeable. 62 Producer and Customer Perceptions. The very limited record concerning this factor is mixed. According to Petitioner, customers and producers perceive domestically produced FRCs that are within the scope as comprising its own separate and distinct product category compared to out‐of‐scope PRCs.63 With respect to producer and customer perceptions, one of two responding U.S. producers reported that in‐scope FRCs and out‐of‐scope PRCs are “never” comparable, and the other responding producer reported that they are “fully” comparable.64 Two of three responding U.S. importers reported that in‐scope FRCs and out‐of‐scope PRCs are (…Continued) of‐scope PRCs are sold. Id. Similarly, there is little overlap between freight and passenger railcar maintenance companies. Id. 56 CR/PR at Table I‐2. 57 CR/PR at Table I‐2. 58 Petition at 17; Petitioner’s Postconf. Br. at 8. 59 Petitioner’s Postconf. Br. at 8; Petition at 18. 60 Conf. Tr. at 50 (Mautino). 61 Petitioner’s Postconf. Br. at 8. 62 CR/PR at Table I‐2. 63 Petitioner’s Postconf. Br. at 8‐9; Petition at 19. 64 CR/PR at Table I‐2. 13 “never” comparable while one responding U.S. importer reported that they are “fully” comparable.65 Price. The pricing data indicate that there were appreciable variations in quarterly prices among the various pricing products for domestically produced in‐scope FRCs during the period of investigation (“POI”). 66 According to Petitioner, out‐of‐scope PRCs are generally much higher‐priced than domestically produced in‐scope FRCs.67 In terms of price, both responding U.S. producers and all three responding U.S. importers reported that domestically produced in‐ scope FRCs and out‐of‐scope PRCs are “never” comparable in terms of price.68 Conclusion. Evidence on the record of these preliminary phase investigations indicates that all domestically produced FRCs coextensive with the scope are made primarily of the same raw materials. Although there are differences in size and design among in‐scope products, all domestically produced FRCs share the same basic overall shape and common features, including knuckles, coupler bodies, coupler yokes, and follower blocks. All domestically produced FRCs generally are produced through the same production process, are generally interchangeable and used to connect and transport railcars, are sold overwhelmingly through the same channels of distribution albeit at appreciably varying prices, and are perceived to be a single product category by market participants. No party argues for defining the domestic like product more broadly than the scope for purposes of these preliminary determinations, and producers and importers generally reported that domestically produced in‐scope FRCs and out‐ of‐scope PRCs are only somewhat or not comparable for most factors. In light of the above, and the lack of any contrary argument, we define a single domestic like product consisting of all domestically produced FRCs, coextensive with the scope, for purposes of these preliminary determinations. 2. FRC Components As discussed above, the scope of these investigations includes both FRC components and finished FRCs. We consider below whether the upstream product – FRC components (e.g., 65 CR/PR at Table I‐2. 66 CR/PR at Tables V‐3 to V‐6. 67 Petitioner’s Postconf. Br. at 9; Conf. Tr. at 52 (Mautino). 68 CR/PR at Table I‐2. The Commission did not collect pricing data for out‐of‐scope PRCs in these preliminary phase investigations. 14 coupler body, knuckle, yoke, and follower block) – and the downstream product – finished FRCs – are part of a single domestic like product. Applying the semifinished products analysis69 to the current record, we find that upstream FRC components and downstream finished FRCs belong in a single domestic like product. Dedication for Use. Petitioner maintains that FRC components are dedicated entirely to the production of in‐scope finished FRCs.70 Two of three responding U.S. producers and three of five responding U.S. importers reported that FRC components do not have uses other than being dedicated solely to the production of in‐scope finished FRCs.71 Separate Markets. According to Petitioner, because FRC components are further processed by U.S. producers to become finished FRCs or are used as replacement parts for finished FRCs, there is no separate market for FRC components that is distinct from the market for finished FRCs.72 Petitioner states that FRC components are not sold in any other market besides the market for finished FRCs.73 Two of three responding U.S. producers reported that there is no separate market for FRC components that is distinct from the market for finished 69 In a semi‐finished products analysis, the Commission examines the following: (1) the significance and extent of the processes used to transform the upstream into the downstream articles; (2) whether the upstream article is dedicated to the production of the downstream article or has independent uses; (3) differences in the physical characteristics and functions of the upstream and downstream articles; (4) whether there are perceived to be separate markets for the upstream and downstream articles; and (5) differences in the costs or value of the vertically differentiated articles. See, e.g., Glycine from India, Japan, and Korea, Inv. Nos. 731‐TA‐1111‐1113 (Preliminary), USITC Pub. No. 3921 at 7 (May 2007); Artists' Canvas from China, Inv. No. 731‐TA‐1091 (Final), USITC Pub. No. 3853 at 6 (May 2006); Live Swine from Canada, Inv. No. 731‐TA‐1076 (Final), USITC Pub. 3766 at 8 n.40 (Apr. 2005); Certain Frozen Fish Fillets from Vietnam, Inv. No. 731‐TA‐1012 (Preliminary), USITC Pub. No. 3533 at 7 (Aug. 2002). 70 Petitioner’s Postconf. Br. at 10. 71 CR/PR at Table I‐5. One responding U.S. producer and two responding U.S. importers reported that FRC components have uses other than being dedicated solely to the production of in‐ scope finished FRCs. Id. 72 Petitioner’s Postconf. Br. at 10. 73 Petitioner’s Postconf. Br. at 10. According to Petitioner, although FRC components can be sold separately as replacement parts for finished FRCs, FRC components are also assembled into the completed coupler and sold as finished FRCs to railcar OEMs. Id. Petitioner states that all FRC components ultimately become finished FRCs whether they are included in the original coupler assembly or are used as replacement parts for a used coupler assembly. Id. 15 FRCs; however, four of five responding U.S. importers reported that there is a separate market for FRC components.74 Differences in Physical Characteristics and Functions of the Upstream and Downstream Articles. According to Petitioner, there are virtually no differences in physical characteristics and functions between FRC components and finished FRCs, particularly since FRC components and finished FRCs are made primarily from steel and are used to connect railcars.75 FRC components typically consists of coupler bodies, knuckles, coupler yokes, and follower blocks.76 Finished FRCs contain these FRC components as well as additional parts to make the finished product including coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors.77 All three responding U.S. producers reported that there are no differences in physical characteristics and functions between FRC components and finished FRCs.78 By contrast, two responding U.S. importers reported that there are no differences in physical characteristics and functions between FRC components and finished FRCs while two importers reported that there are such differences.79 Differences in the Costs or Value. According to the Petitioner, FRC components comprise a significant majority of the cost of finished FRCs.80 At the conference, an industry witness testifying on behalf of Petitioner estimated that FRC components accounted for approximately *** percent of the cost of finished FRCs.81 All three responding U.S. producers reported that there are no differences in the cost or value between FRC components and finished FRCs. 82 However, three of five responding U.S. importers reported that there are differences in the cost or value between FRC components and finished FRCs while two of five responding U.S. importers reported that there are no differences in the cost or value. 83 74 CR/PR at Table I‐5. One responding U.S. producer reported that there is a separate market for FRC components that is distinct from the market for finished FRCs while one responding U.S. importer reported that there is no separate market for FRC components. Id. 75 Petitioner’s Postconf. Br. at 10; Petition at 20. 76 CR/PR at I‐7 and I‐11. 77 CR/PR at I‐11. 78 CR/PR at Table I‐5. 79 CR/PR at Table I‐5. 80 Petitioner’s Postconf. Br. at 10; Petition at 20. 81 Conf. Tr. at 53 (Mautino). 82 CR/PR at Table I‐5. 83 CR/PR at Table I‐5. 16 Significance and Extent of Processes Used to Transform Upstream Product into Downstream Product. Petitioner contends that the process for transforming FRC components into finished FRCs is relatively minor in nature claiming that the predominant portion of the production process relates to producing FRC components and that minimal additional parts or further processing is required.84 All three responding U.S. producers reported that the process for transforming FRC components into finished FRCs is not intensive whereas two responding U.S. importers reported that the process is intensive and two importers reported that the process is not intensive.85 Conclusion. All producers reported no differences in physical characteristics and functions between FRC components and finished FRCs, no differences in the cost or value between FRC components and finished FRCs, and that the process for transforming FRC components into finished FRCs is not intensive. Most producers also reported that FRC components do not have uses other than being dedicated solely to the production of in‐scope finished FRCs and that there is no separate market for FRC components that is distinct from the market for finished FRCs. The available information from the importers is more mixed. Although most importers reported that FRC components do not have uses other than being dedicated solely to the production in‐scope finished FRCs, a large minority of importers reported that FRC components had other such uses. Half of responding importers reported that there are no differences in physical characteristics and functions between FRC components and finished FRCs and that the process for transforming FRC components into finished FRCs is not intensive. On the other hand, most importers reported that there are separate markets and differences in cost for FRC components and finished FRCs. Based on the current record, and the lack of any contrary argument at this preliminary phase, we include FRC components and finished FRCs in the same definition of the domestic like product and define a single domestic like product that is coextensive with the scope of these investigations. IV. Domestic Industry The domestic industry is defined as the domestic “producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product.”86 In defining the domestic 84 Petitioner’s Postconf. Br. at 11; Petition at 20‐21. 85 CR/PR at Table I‐5. 86 19 U.S.C. § 1677(4)(A). 17 industry, the Commission’s general practice has been to include in the industry producers of all domestic production of the like product, whether toll‐produced, captively consumed, or sold in the domestic merchant market. Petitioner’s Arguments. Petitioner argues that the Commission determine there is one domestic industry comprised of all domestic producers of FRCs.87 Although the petition did not mention refurbishers, Petitioner maintains that refurbishers of FRCs and FRC components are not part of the domestic industry since they are not engaged in the production of FRCs and that including refurbishers in the domestic industry would result in double‐counting. 88 Petitioner does not argue that appropriate circumstances exist to exclude any firm pursuant to the related parties provision of the statute in these preliminary phase investigations.89 Respondents’ Arguments. Wabtec agrees with the Petitioner’s proposed definition of the domestic industry.90 No other respondents addressed the issue of domestic industry definition for purposes of these preliminary phase investigations.91 There is no evidence in the record of a related party issue and no information to conduct an analysis of whether refurbishers provide sufficient production‐related activities to be included in the domestic industry issues at the preliminary phase.92 In light of our domestic 87 Petitioner’s Postconf. Br. at 11. 88 Petitioner’s Postconf. Br. at 11 n.52. 89 Conf. Tr. at 54 (Pickard). At the conference, counsel for Petitioner stated that, although appropriate circumstances could justify excluding one firm (Huron) from the domestic industry, it “was not making that argument at the prelim.” Id. Petitioner did not further address related parties in its postconference brief. In the petition, Petitioner maintains that Huron is affiliated with a subject producer/exporter of FRCs and therefore qualifies as a related party. See Petition at 21. In its U.S. producer questionnaire, however, Huron reports that it is not affiliated with any subject producers/exporters of FRCs from China. See Huron U.S. Producer Questionnaire at I‐5 & I‐6. 90 Conf. Tr. at 112‐113 (Morrell). 91 As discussed below, Strato argues that refurbished FRCs should be considered as a pertinent condition of competition in the U.S. market for FRCs. See Strato Postconf. Br. at 3, 13‐14. In its postconference brief, Strato suggests that the Commission should “evaluate” in any final phase investigations whether refurbishers are engaged in sufficient production‐related activities to be included in the domestic industry, and should collect pricing and financial data from refurbishers. Id. at 15 n.35. 92 CR/PR at III‐2 & Table III‐2. There is no information available on refurbishers activities in these preliminary phase investigations to conduct a sufficient production‐related analysis. In any final phase investigations, if parties intend to raise any issues as to whether refurbishers of FRCs and FRC components are engaged in sufficient production‐related activities, they should: (1) specify in their comments on the draft questionnaires the criteria that constitutes refurbishment activities to be included in the domestic industry definition; and (2) identify and provide contact information for alleged (Continued…) 18 like product definition, and the fact that no party has argued to the contrary, we define a single domestic industry consisting of all U.S. producers of FRCs, namely Amsted, Huron Casting, Inc. (“Huron”), and M&T. V. Reasonable Indication of Material Injury by Reason of Subject Imports93 A. Legal Standard In the preliminary phase of antidumping and countervailing duty investigations, the Commission determines whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of the imports under investigation. 94 In making this determination, the Commission must consider the volume of subject imports, their effect on prices for the domestic like product, and their impact on domestic producers of the domestic like product, but only in the context of U.S. production operations.95 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or unimportant.”96 In assessing whether there is a reasonable indication that the domestic industry is materially injured by reason of subject imports, we consider all relevant economic factors that bear on the state of the industry in the United States.97 No single factor is dispositive, and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”98 (…Continued) refurbishers of domestically produced FRCs and FRC components and/or refurbishers of subject merchandise. 19 C.F.R. § 207.20(b). 93 Pursuant to Section 771(24) of the Tariff Act, imports from a subject country of merchandise corresponding to a domestic like product that account for less than 3 percent of all such merchandise imported into the United States during the most recent 12 months for which data are available preceding the filing of the petition shall be deemed negligible. 19 U.S.C. §§ 1671b(a), 1673b(a), 1677(24)(A)(i), 1677(24)(B). Negligibility is not an issue in these investigations. Subject imports from China accounted for *** percent of total U.S. imports of FRCs in the 12‐month period (September 2020 to August 2021) preceding the filing of the petitions. CR/PR at Table IV‐4. 94 19 U.S.C. §§ 1671b(a), 1673b(a). 95 19 U.S.C. § 1677(7)(B). The Commission “may consider such other economic factors as are relevant to the determination” but shall “identify each {such} factor ... and explain in full its relevance to the determination.” 19 U.S.C. § 1677(7)(B). 96 19 U.S.C. § 1677(7)(A). 97 19 U.S.C. § 1677(7)(C)(iii). 98 19 U.S.C. § 1677(7)(C)(iii). 19 Although the statute requires the Commission to determine whether there is a reasonable indication that the domestic industry is “materially injured or threatened with material injury by reason of” unfairly traded imports,99 it does not define the phrase “by reason of,” indicating that this aspect of the injury analysis is left to the Commission’s reasonable exercise of its discretion.100 In identifying a causal link, if any, between subject imports and material injury to the domestic industry, the Commission examines the facts of record that relate to the significance of the volume and price effects of the subject imports and any impact of those imports on the condition of the domestic industry. This evaluation under the “by reason of” standard must ensure that subject imports are more than a minimal or tangential cause of injury and that there is a sufficient causal, not merely a temporal, nexus between subject imports and material injury.101 In many investigations, there are other economic factors at work, some or all of which may also be having adverse effects on the domestic industry. Such economic factors might include nonsubject imports; changes in technology, demand, or consumer tastes; competition among domestic producers; or management decisions by domestic producers. The legislative history explains that the Commission must examine factors other than subject imports to ensure that it is not attributing injury from other factors to the subject imports, thereby inflating an otherwise tangential cause of injury into one that satisfies the statutory material injury threshold. 102 In performing its examination, however, the Commission need not isolate 99 19 U.S.C. §§ 1671b(a), 1673b(a). 100 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484‐85 (Fed. Cir. 1998) (“{T}he statute does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g, 944 F. Supp. 943, 951 (Ct. Int’l Trade 1996). 101 The Federal Circuit, in addressing the causation standard of the statute, observed that “{a}s long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less than fair value meets the causation requirement.” Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384 (Fed. Cir. 2003). This was further ratified in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873 (Fed. Cir. 2008), where the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm occurred “by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001). 102 SAA at 851‐52 (“{T}he Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96‐249 at 75 (1979) (the Commission “will consider information which indicates that harm is caused by factors other than less‐ than‐fair‐value imports.”); H.R. Rep. 96‐317 at 47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take into account evidence presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or dumped imports is (Continued…) 20 the injury caused by other factors from injury caused by unfairly traded imports. 103 Nor does the “by reason of” standard require that unfairly traded imports be the “principal” cause of injury or contemplate that injury from unfairly traded imports be weighed against other factors, such as nonsubject imports, which may be contributing to overall injury to an industry.104 It is clear that the existence of injury caused by other factors does not compel a negative determination. 105 Assessment of whether material injury to the domestic industry is “by reason of” subject imports “does not require the Commission to address the causation issue in any particular way” as long as “the injury to the domestic industry can reasonably be attributed to the subject imports.”106 The Commission ensures that it has “evidence in the record” to “show that the (…Continued) attributable to such other factors;” those factors include “the volume and prices of nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and productivity of the domestic industry”); accord Mittal Steel, 542 F.3d at 877. 103 SAA at 851‐52 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n, 266 F.3d at 1345 (“{T}he Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... . Rather, the Commission must examine other factors to ensure that it is not attributing injury from other sources to the subject imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not required to isolate the effects of subject imports from other factors contributing to injury” or make “bright‐line distinctions” between the effects of subject imports and other causes.); see also Softwood Lumber from Canada, Inv. Nos. 701‐TA‐414 and 731‐TA‐928 (Remand), USITC Pub. 3658 at 100‐01 (Dec. 2003) (Commission recognized that “{i}f an alleged other factor is found not to have or threaten to have injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’ then there is nothing to further examine regarding attribution to injury”), citing Gerald Metals, 132 F.3d at 722 (the statute “does not suggest that an importer of LTFV goods can escape countervailing duties by finding some tangential or minor cause unrelated to the LTFV goods that contributed to the harmful effects on domestic market prices.”). 104 S. Rep. 96‐249 at 74‐75; H.R. Rep. 96‐317 at 47. 105 See Nippon Steel Corp., 345 F.3d at 1381 (“an affirmative material‐injury determination under the statute requires no more than a substantial‐factor showing. That is, the ‘dumping’ need not be the sole or principal cause of injury.”). 106 Mittal Steel, 542 F.3d at 876 &78; see also id. at 873 (“While the Commission may not enter an affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’ subject imports, the Commission is not required to follow a single methodology for making that determination ... {and has} broad discretion with respect to its choice of methodology.”), citing United States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96‐249 at 75. In its (Continued…) 21 harm occurred ‘by reason of’ the LTFV imports,” and that it is “not attributing injury from other sources to the subject imports.” 107 The Federal Circuit has examined and affirmed various Commission methodologies and has disavowed “rigid adherence to a specific formula.”108 The question of whether the material injury threshold for subject imports is satisfied notwithstanding any injury from other factors is factual, subject to review under the substantial evidence standard.109 Congress has delegated this factual finding to the Commission because of the agency’s institutional expertise in resolving injury issues.110 B. Conditions of Competition and the Business Cycle The following conditions of competition inform our analysis of whether there is a reasonable indication of material injury by reason of subject imports. 1. Demand Conditions Demand for FRCs is driven by the production of new freight railcars.111 Demand for FRCs is also driven by the demand for maintenance/repair of freight railcars already in service, which may require FRC components rather than complete FRCs.112 (…Continued) decision in Swiff‐Train v. United States, 793 F.3d 1355 (Fed. Cir. 2015), the Federal Circuit affirmed the Commission’s causation analysis as comporting with the Court’s guidance in Mittal. 107 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 877‐79. We note that one relevant “other factor” may involve the presence of significant volumes of price‐competitive nonsubject imports in the U.S. market, particularly when a commodity product is at issue. In appropriate cases, the Commission collects information regarding nonsubject imports and producers in nonsubject countries in order to conduct its analysis. 108 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for determining whether a domestic injury was ‘by reason’ of subject imports.”). 109 We provide in our discussion below a full analysis of other factors alleged to have caused any material injury experienced by the domestic industry. 110 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96 F.3d at 1357; S. Rep. 96‐249 at 75 (“The determination of the ITC with respect to causation is ... complex and difficult, and is a matter for the judgment of the ITC.”). 111 CR/PR at II‐7 and II‐9. The new freight railcar market is highly cyclical and generally follows general trends in the overall U.S. economy. CR/PR at II‐9 and Figure II‐1. The number of new railcars in the North American market was approximately 51,000 in 2018, 58,000 in 2019, and 31,000 in 2020. CR/PR at II‐9. 22 Both responding U.S. producers reported that U.S. demand for FRCs fluctuated since January 1, 2018. 113 However, three out of five responding U.S. importers reported that U.S. demand for FRCs declined since January 1, 2018, while two reported that U.S. demand for FRCs fluctuated.114 Apparent U.S. consumption of FRCs increased from *** pounds in 2018 to *** pounds in 2019, but then declined to *** pounds in 2020, a level *** percent lower than in 2018. 115 Apparent U.S. consumption was *** percent lower in interim 2021, at *** pounds, than in interim 2020, at *** pounds. 116 2. Supply Conditions The domestic industry consists of three firms of varying size. In 2020, M&T accounted for *** percent of domestic production of FRCs, Amsted accounted for *** percent, and Huron accounted for *** percent. 117 Over the course of the POI, both ***.118 M&T had a supply agreement with its former parent company and current U.S. purchaser Trinity Rail Group, LLC (“Trinity”) whereby Trinity agreed to purchase set amounts of FRCs that decrease annually until their supply agreement expires in 2023. 119 The domestic industry was generally the second‐ largest supply source to the U.S. market during the POI except for 2018 when it was the largest source of supply.120 The industry’s market share declined from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; its market share was lower in interim 2021, at *** percent, than in interim 2020, at *** percent. 121 (…Continued) 112 CR/PR at II‐7 and II‐9. Estimates for average annual FRC units in the North American maintenance/replacement market for freight railcars were *** units in 2018, *** units in 2019, and *** units in 2020. CR/PR at II‐9. The maintenance market/replacement market is closely tied to railroad revenue per ton miles, which decreased about 30 percent during the COVID‐19 pandemic. Id. Additionally, the number of freight railcars that were scrapped and/or put into storage increased during January 2018‐June 2021. Id. Maintenance is not conducted on freight railcars that are scrapped or put into storage. Id. 113 CR/PR at Table II‐5. 114 CR/PR at Table II‐5. 115 CR/PR at Table C‐1. 116 CR/PR at Table C‐1. 117 CR/PR at Table III‐1. 118 CR/PR at Table III‐3. Notwithstanding the domestic industry’s reduction in capacity from *** pounds in 2018 to *** pounds in 2019 and *** pounds in 2020, its reported capacity exceeded apparent U.S. consumption throughout the POI. CR/PR at Table C‐1. 119 CR/PR at II‐8. 120 CR/PR at Tables IV‐5 and C‐1. 121 CR/PR at Tables IV‐5 and C‐1. 23 Subject imports were the third‐largest source of supply to the U.S. market throughout the POI. 122 Subject imports’ market share increased from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; their market share was higher in interim 2021, at *** percent, than in interim 2020, at *** percent. 123 During the POI, U.S. importer Strato, which imported subject merchandise, had a supply agreement for FRCs with TTX, the largest owner of railcars in North America.124 Nonsubject imports were generally the largest source of supply to the U.S. market during the POI except for 2018 when they were the second‐largest source of supply.125 Nonsubject imports’ market share increased from *** percent in 2018 to *** percent in 2019 and 2020; their market share was higher in interim 2021, at *** percent, than in interim 2020, at *** percent. 126 The largest source of nonsubject imports during 2020 was Mexico.127 3. Substitutability and Other Conditions Based on the current record, we find that there is a moderate‐to‐high degree of substitutability between domestically produced FRCs and subject imports from China.128 Both responding domestic producers and all five responding importers reported that the domestic like product and subject imports were always or frequently interchangeable.129 All FRCs and their major components are subject to manufacturing and safety standards set by the AAR.130 122 CR/PR at Tables IV‐5 and C‐1. 123 CR/PR at Tables IV‐5 and C‐1. 124 CR/PR at II‐12; Strato Postconf. Br. at 22‐23. According to Strato, this supply agreement was a *** contract signed in *** under which ***. Strato Postconf. Br. at 22‐23. 125 CR/PR at Tables IV‐5 and C‐1. 126 CR/PR at Tables IV‐5 and C‐1. 127 CR/PR at II‐1, n.2. 128 CR/PR at II‐11. The degree of substitution between domestic and imported FRC depends upon the extent of product differentiation between the domestic and imported products and reflects how easily purchasers can switch from domestically produced FRCs to FRCs imported from subject countries (or vice versa) when prices change. CR/PR at II‐11 n.31. The degree of substitution may include such factors as relative prices (discounts/rebates), quality differences (e.g., grade standards, defect rates, etc.), and differences in sales conditions (e.g., lead times between order and delivery dates, reliability of supply, product services, etc.). Id. 129 CR/PR at Tables II‐7 and II‐8. 130 CR/PR at I‐7‐8, I‐11, and II‐1. AAR standard M‐211 covers foundry and product approval requirements for the manufacture of couplers, coupler yokes, knuckles, follower blocks, and coupler parts. CR/PR at I‐7. AAR standard M‐215 covers complete coupler systems. Id. AAR standard M‐216 covers a fatigue test for knuckles, type E and F. Id. 24 Information available, however, indicates that only subject imports use “Bedloe technology,” a proprietary design for couplers, knuckles, and subcomponents for FRCs, that may limit interchangeability with domestic product.131 As discussed below, we intend to examine this issue further in any final phase investigations. The limited record in these preliminary phase determinations indicates that price is an important factor in purchasing decisions for FRCs. The two purchasers responding to the lost sales and lost revenue survey both cited price among the three most important factors in purchasing decisions for FRCs.132 In comparing domestically produced FRCs and subject imports, both responding U.S. producers and three out of four U.S. importers reported that differences other than price were only sometimes or never significant in purchasing decisions.133 *** U.S. producers and *** U.S. importers reported that the U.S. market for FRCs was subject to distinct business cycles, with market participants reporting business cycles of varying length (ranging from seven years to eight‐ten years) and that downturns in the business cycles for FRCs tend to happen with downturns in the overall U.S. economy.134 In 2018 and 2019, domestically produced FRCs were sold predominantly to OEMs, but were also sold in appreciable quantities to the maintenance/repair sector of the market.135 In 2020 and interim 2021, domestically produced FRCs were sold predominantly to the maintenance/repair sector of the market, but were also sold in appreciable quantities to 131 CR/PR at II‐12. 132 CR/PR at II‐11‐12 and Table II‐6. The other major purchasing factors identified by purchasers were contractual commitments, performance and durability, availability/supply, and customer preference. Id. 133 CR/PR at Tables II‐9 and II‐10. 134 CR/PR at II‐8. U.S. producer *** reported that the business cycle is typically seven years from peak to trough. Importer *** reported an eight‐to‐ten‐year cycle and that downtrends tend to happen with downturns in the economy. Id. Importer *** further reported that during downturns, railcars are put into storage and general maintenance is deferred, reducing demand for FRCs further. Id. Importer *** reported that demand in the OEM market is aligned to the number of new cars built while demand for the maintenance parts in the aftermarket is more dependent on Class I railcar traffic volume and is more consistent than the OEM market. Id. 135 CR/PR at Table II‐1. 25 OEMs. 136 Subject imports were sold predominantly to the maintenance/repair sector of the market, but were also sold in appreciable quantities to OEMs throughout the POI. 137 During the POI, U.S. producers mostly sold FRCs using annual contracts, lesser but substantial quantities using spot sales and long‐term contracts, and very small quantities using short‐term contracts. 138 Importers sold subject merchandise mainly using long‐term and annual contracts nearly in equal measure, lesser but appreciable quantities using spot sales, and very small quantities using short‐term contracts. 139 During the POI, domestically produced FRCs were produced to order and sold from inventory by nearly equal measure.140 Subject imports from China were sold primarily from inventory, with lesser but appreciable quantities produced to order.141 Raw materials accounted for *** percent of the cost of goods sold (“COGS”) for FRCs in 2018, *** percent in 2019, *** percent in 2020, *** percent in interim 2020, and *** percent in interim 2021. 142 FRCs are primarily made of pig iron and scrap metal.143 Prices for FRCs generally follow the prices for scrap steel.144 Steel scrap prices fluctuated but increased overall during the POI. 145 Subject merchandise entering under HTS subheadings 8607.30.10, 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01 became subject to additional 25 percent ad valorem duties pursuant to section 301 of the Tariff Act of 1974 146 (“section 301 tariffs”), which took effect on August 23, 2018. 147 Exclusions for one year were granted effective July 31, 136 CR/PR at Table II‐1. 137 CR/PR at Table II‐1. 138 CR/PR at Table V‐2. 139 CR/PR at Table V‐2. 140 CR/PR at II‐12. 141 CR/PR at II‐12. 142 CR/PR at V‐1 and Table VI‐1. 143 CR/PR at V‐1 and VI‐14. 144 CR/PR at V‐1. 145 Steel scrap generally increased in 2018, declined in 2019, and increased again during January 2020‐September 2021, with *** in October 2019 and *** in July 2021. Overall, prices for no. 1 busheling scrap increased *** percent during January 2018‐September 2021, prices for no. 1 heavy melt scrap increased by *** percent, and shredded auto scrap increased by *** percent. CR/PR at V‐1. 146 19 U.S.C. § 2411. 147 CR/PR at I‐6‐7. 26 2019 for subject merchandise entering under HTS subheading 8607.30.10. 148 These exclusions expired one year later and subject merchandise entering under HTS subheading 8607.30.10 became subject to additional 25 percent ad valorem duties pursuant to section 301 effective July 31, 2020. 149 C. Volume of Subject Imports Section 771(7)(C)(i) of the Tariff Act provides that the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant.”150 The volume of subject import shipments increased from *** pounds in 2018 to *** pounds in 2019, but then declined to *** pounds in 2020. 151 Further, the volume of subject import shipments was lower in interim 2021, at *** pounds, than in interim 2020, at *** pounds in interim 2020. 152 The market share of subject import shipments increased by *** percentage points over the POI, increasing from *** percent in 2018 to *** percent in 2019 and *** percent in 2020. 153 The market share of subject import shipments was higher in interim 2021, at *** percent, than in interim 2020, at *** percent. 154 The ratio of subject imports to domestic production increased from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; it was higher in interim 2021, at *** percent, than in interim 2020, at *** percent. 155 Based on the record in the preliminary phase of the investigations, we conclude that the volume of subject imports was significant in absolute terms and that the increase in the volume 148 CR/PR at I‐7. 149 CR/PR at I‐7. 150 19 U.S.C. § 1677(7)(C)(i). 151 CR/PR at Tables IV‐5 and C‐1. 152 CR/PR at Tables IV‐5 and C‐1. The volume of subject imports declined from *** pounds in 2018 to *** pounds in 2019 and *** pounds in 2020. CR/PR at Table IV‐2. Further, the volume of subject imports was lower in interim 2021, at *** pounds, than in interim 2020, at *** pounds. Id. We recognize that there is a discrepancy between the larger volume of subject imports and the smaller volume of subject import shipments throughout the POI. Compare CR/PR at Tables IV‐2 & IV‐5. Based on the current record, this discrepancy appears to be attributable largely to the fact that *** during the POI. See, e.g., *** U.S. Importer Questionnaire at II‐5a; Petitioner’s Postconf. Br. at 15‐16 and Exh. 3. 153 CR/PR at Tables IV‐5 and C‐1. 154 CR/PR at Tables IV‐5 and C‐1. 155 Derived from CR/PR at Tables IV‐2, III‐4, and C‐1. 27 of subject imports was significant relative to consumption and production in the United States during the POI. 156 D. Price Effects of the Subject Imports Section 771(7)(C)(ii) of the Tariff Act provides that, in evaluating the price effects of subject imports, the Commission shall consider whether – (I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and (II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.157 As addressed in section IV.B.4. above, the record indicates that there is a moderate‐to‐ high degree of substitutability between domestically produced FRCS and the subject imports and that price is an important factor in purchasing decisions. The Commission collected quarterly pricing data from U.S. producers and importers for four pricing products.158 Two domestic producers and two importers provided usable pricing data, although not all firms reported pricing for all products for all quarters.159 Pricing data 156 Petitioner contends that the questionnaire responses submitted by importers understate the volume and market share of subject imports. See Petitioner’s Postconf. Br. at 19. According to Petitioner, the questionnaire data that the Commission received from U.S. importers and foreign producers did not account for subject FRCs from China entering the United States from Mexico or another third country mounted on a railcar, which are covered by the scope of these investigations. Id. We intend to further examine this issue in any final phase investigations. 157 19 U.S.C. § 1677(7)(C)(ii). 158 The four pricing products are as follows: Product 1.‐‐SE60, Grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications; Product 2.‐‐SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications; Product 3.‐‐E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications; and Product 4.‐‐SY coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. CR/PR at V‐6. 159 CR/PR at V‐6. 28 reported by these firms accounted for *** percent of U.S. producers’ U.S. shipments of FRCs and *** percent of importers’ U.S shipments of subject merchandise from China in 2020. 160 The pricing data show pervasive underselling by subject imports. Prices for subject imports were below those for the domestically produced FRCs in 40 of 52 (or 76.9 percent of) quarterly comparisons, while prices for subject imports were above those for domestically produced FRCs in 12 of 52 (or 23.1 percent of) quarterly comparisons. 161 There were *** units of subject imports in quarterly comparisons in which subject imports undersold the domestic like product (*** percent of the total) and only *** units of subject imports in quarterly comparisons in which subject imports oversold the domestic like product (*** percent of the total).162 The margins of underselling ranged from *** to *** percent, and averaged *** percent during the POI, while the margins of overselling ranged from *** to *** percent, and averaged *** percent.163 164 In light of the foregoing indicating that subject imports were generally sold at lower prices than domestically produced FRCs, we find, for purposes of these preliminary determinations, that there has been significant price underselling by subject imports. Given that the domestic like product and subject imports are at least moderately substitutable and that price is an important factor in purchasing decisions for FRCs, for purposes of these preliminary determinations, we find that the underselling allowed lower priced subject imports to gain U.S. market share at the direct expense of domestic producers during the POI. 165 166 160 CR/PR at V‐6. 161 CR/PR at Table V‐8. 162 CR/PR at Table V‐8. 163 CR/PR at Table V‐8. 164 We have also considered purchaser lost sales/lost revenue responses. One of two purchasers that responded to the Commission’s lost sales/lost revenue survey reported that, since 2018, it had purchased subject imports instead of the domestic like product. CR/PR at Tables V‐9 and V‐10. This purchaser, ***, reported that subject import prices were lower than the domestically produced product, but that price was not the primary reason for purchasing subject imports. CR/PR at Table V‐10. 165 CR/PR at Table C‐1. The domestic industry’s market share declined from *** percent in 2018 to *** percent in 2019 and *** percent in 2020, a decline of *** percentage points over that period. Id. Between interim 2020 and interim 2021, the domestic industry’s market share declined from *** percent to *** percent, a decline of *** percentage points over those periods. Id. In contrast, subject imports’ market share increased from *** percent in 2018 to *** percent in 2019 and *** percent in 2020, and increase of *** percentage points. Id. Between interim 2020 and interim 2021, subject imports’ market share increased from *** percent to *** percent, an increase of *** percentage points. Id. 29 We have also examined available data on price trends. During the POI, domestic prices generally increased for all four pricing products.167 Prices of subject imports from China increased for all four pricing products during the POI. 168 However, available data also indicate that the average unit value of complete FRCs for U.S. producers declined between 2018 and 2020 and between interim 2020 and interim 2021, while the AUV of components other than knuckles for U.S. producers declined significantly between interim 2020 and interim 2021 on a per unit basis. 169 We have also considered whether subject imports have prevented price increases for domestically produced FRCs which otherwise would have occurred to a significant degree. The record shows that the domestic industry’s ratio of COGS to net sales increased by *** percentage points from 2018 to 2020, increasing from *** percent in 2018 to *** percent in 2019 and *** percent in 2020. 170 The industry’s ratio of COGS to net sales also was *** percentage points higher in interim 2021, at *** percent, than in interim 2020, at *** percent.171 While the industry’s unit COGS increased by *** per 1,000 pounds between 2018 and 2020, its net sales AUVs only increased by *** per 1,000 pounds during that same period.172 The domestic industry’s unit COGS were higher by $*** per 1,000 pounds in interim 2021 than in interim 2020, but its net sales AUVs were only higher by $*** per 1,000 pounds in interim 2021 than in interim 2020. 173 However, we also recognize that while apparent U.S. consumption increased by *** percent between 2018 and 2019, it declined overall by approximately *** percent from 2018 to 2020, and was approximately *** percent lower in (…Continued) 166 We intend to investigate further Respondent and TTX’s arguments that the shift in market share was due to non‐price reasons. See infra n. 208. 167 CR/PR at Tables V‐3‐7. During January 2018‐June 2021, domestic prices increased by *** percent for Product 1, *** percent for Product 2, *** percent for Product 3, and *** percent for Product 4. CR/PR at Tables V‐3‐7. 168 For the period for which data were reported for Product 1 (i.e., July 2018‐June 2021) and Product 2 (i.e., April 2018‐June 2021), prices for subject imports from China increased by *** percent and *** percent, respectively. During January 2018‐June 2021, prices for subject imports from China increased by *** percent for Product 3 and *** percent for Product 4. CR/PR at Tables V‐3‐7. 169 CR/PR at Table E‐1. 170 CR/PR at Tables VI‐1 and C‐1. 171 CR/PR at Tables VI‐1 and C‐1. 172 CR/PR at Table VI‐2. The domestic industry’s unit COGS increased in each year of the POI, while its net sales AUVs increased between 2018 and 2019, but then declined slightly in 2020; they were higher in interim 2021 than in interim 2020. Id. 173 CR/PR at Table VI‐2. 30 interim 2021 than in interim 2020. 174 This decline in apparent U.S. consumption reflected the decline in railroad revenue per ton miles and an increase in the number of cars in storage/scrapped as well as the downturn in the business cycle for new freight railcars in the latter portion of the POI. 175 We intend to further assess the role of overall declining demand in domestic producers’ ability to pass on rising costs in any final phase investigations. In sum, based on the current record, there is a moderate‐to‐high degree of substitutability between the domestic like product and subject imports, price is an important factor in purchasing decisions for FRCs, and the volume of subject imports is significant. Moreover, as discussed above, the available information on the record in the preliminary phase of these investigations indicates that subject imports significantly undersold domestically produced FRCs and captured market share from the domestic industry during the POI. Therefore, for purposes of these preliminary determinations, we find that subject imports had significant price effects. E. Impact of the Subject Imports176 Section 771(7)(C)(iii) of the Tariff Act provides that the Commission, in examining the impact of the subject imports on the domestic industry, “shall evaluate all relevant economic factors which have a bearing on the state of the industry.” These factors include output, sales, inventories, capacity utilization, market share, employment, wages, productivity, gross profits, net profits, operating profits, cash flow, return on investment, return on capital, ability to raise capital, ability to service debt, research and development (“R&D”), and factors affecting domestic prices. No single factor is dispositive and all relevant factors are considered “within the context of the business cycle and conditions of competition that are distinctive to the affected industry.”177 The domestic industry’s production and shipments deteriorated at a faster rate than the declines in apparent U.S. consumption between 2018 and 2020 and between interim 2020 and 174 CR/PR at Tables IV‐5 and C‐1. 175 CR/PR at II‐9‐10, Figure II‐1, and Table C‐1; Petitioner Postconf. Br. at 13; Wabtec Postconf. Br. at 8‐10; Strato Postconf. Br. at 8‐13. 176 Commerce initiated its antidumping duty investigation for subject imports from China based on estimated dumping margins of 142.98 percent and 147.11 percent ad valorem. Freight Rail Coupler Systems and Certain Components Thereof from the People’s Republic of China: Initiation of Less‐Than‐ Fair‐Value Investigation, 86 Fed. Reg. 58864, 58867 (Oct. 25, 2021). 177 19 U.S.C. § 1677(7)(C)(iii). This provision was amended by the Trade Preferences Extension Act (“TPEA”) of 2015, Pub. L. 114‐27. 31 interim 2021. 178 While apparent U.S. consumption declined by *** percent from 2018 to 2020, 179 the domestic industry’s production and shipments declined each year and by *** percent and *** percent, respectively, from 2018 to 2020. 180 Similarly, although apparent U.S. consumption was *** percent lower,181 the domestic industry’s production and shipments were lower by *** percent and *** percent, respectively, in interim 2021 than in interim 2020. 182 The domestic industry’s capacity declined by *** percent from 2018 to 2020; 183 its capacity was *** percent lower in interim 2021 than in interim 2020. 184 The domestic industry’s capacity utilization declined by *** percentage points from 2018 to 2020, and was *** percentage points lower in interim 2021 than in interim 2020.185 End‐of‐period inventories increased by *** percent from 2018 to 2020, but were *** percent lower in interim 2021 than in interim 2020. 186 The domestic industry’s market share declined from *** percent in 2018 to *** percent in 2019 and *** percent in 2020, for an overall decline of *** percentage points from 2018 to 2020; its market share was *** percentage points lower in interim 2021, at *** percent, than in interim 2020, at *** percent. 187 178 CR/PR at Tables III‐4, IV‐5, and C‐1. 179 Apparent U.S. consumption of FRCs increased from *** pounds in 2018 to *** pounds in 2019, but then declined to *** pounds in 2020. CR/PR at Tables IV‐5 and C‐1. 180 The domestic industry’s production declined from *** pounds in 2018 to *** pounds in 2019 to *** pounds in 2020. U.S. producers’ U.S. shipments declined from *** pounds in 2018 to *** pounds in 2019 and *** pounds in 2020. CR/PR at Tables III‐4, III‐6, and C‐1. 181 Apparent U.S. consumption of FRCs was *** pounds in interim 2020 and *** pounds in interim 2021. CR/PR at Tables IV‐5 & C‐1. 182 The domestic industry’s production was *** pounds in interim 2020 and *** pounds in interim 2021. U.S. producers’ U.S. shipments were *** pounds in interim 2020 and *** pounds in interim 2021. CR/PR at Tables III‐4, III‐6, and C‐1. 183 The domestic industry’s capacity declined from *** pounds in 2018 to *** pounds in 2019 and *** pounds in 2020. CR/PR at Tables III‐4 and C‐1. 184 The domestic industry’s capacity was *** pounds in interim 2020 and *** pounds in interim 2021. CR/PR at Tables III‐4 and C‐1. 185 The domestic industry’s capacity utilization declined from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; its capacity utilization was *** percent in interim 2020 and *** percent in interim 2021. CR/PR at Tables III‐4 and C‐1. 186 The domestic industry’s end‐of‐period inventories were *** pounds in 2018, *** pounds in 2019, *** pounds in 2020, *** pounds in interim 2020, and *** pounds in interim 2021. CR/PR at Tables III‐8 and C‐1. 187 CR/PR at Tables IV‐5 and C‐1. 32 The domestic industry’s employment indicia declined during the POI. PRWs, 188 hours worked,189 wages paid, 190 and productivity 191 declined steadily from 2018 to 2020, and were lower in interim 2021 than in interim 2020. Hourly wages increased irregularly from 2018 to 2020, but were lower in interim 2021 than in interim 2020. 192 Most of the domestic industry’s financial performance indicia declined over the course of the POI. The domestic industry’s net sales (by value) declined by *** percent from 2018 to 2020, and were *** percent lower in interim 2021 than in interim 2020. 193 The industry’s gross profit declined by *** percent from 2018 to 2020, and was *** percent lower in interim 2021 than in interim 2020. 194 Operating income declined by *** percent from 2018 to 2020, and deteriorated further as the domestic industry had operating losses in interim 2021. 195 Operating income as a share of net sales fell by *** percentage points from 2018 to 2020, and was *** percentage points lower in interim 2021 than in interim 2020. 196 Net income declined 188 PRWs declined by *** percent from 2018 to 2020, declining from *** in 2018 to *** in 2019 and *** in 2020; they were *** percent lower in interim 2021, at ***, than in interim 2020, at ***. CR/PR at Table C‐1. 189 Total hours worked declined by *** percent from 2018 to 2020, declining from *** hours in 2018 to *** hours in 2019 and *** hours in 2020; they were *** percent lower in interim 2021, at *** hours, than in interim 2020, at *** hours. CR/PR at Table C‐1. 190 Wages paid declined by *** percent from 2018 to 2020, declining from $*** in 2018 to $*** in 2019 and $*** in 2020; they were *** percent lower in interim 2021, at $***, than in interim 2020, at $***. CR/PR at Table C‐1. 191 Productivity declined by *** percent from 2018 to 2020, declining from *** pounds per hour in 2018 to *** pounds per hour in 2019 and *** pounds per hour in 2020; it was *** percent lower in interim 2021, at *** pounds per hour, than in interim 2020, at *** pounds per hour. CR/PR at Table C‐1. 192 Hourly wages paid to PRWs increased by *** percent from 2018 to 2020, declining from $*** per hour in 2018 to $*** per hour in 2019, but then increasing to $*** per hour in 2020; they were *** percent lower in interim 2021, at $*** per hour, than in interim 2020, at $*** per hour. CR/PR at Table C‐1. 193 By value, the domestic industry’s net sales declined from $*** in 2018 to $*** in 2019 and $*** in 2020. Its net sales (by value) were lower in interim 2021, at $***, than in interim 2020, at $***. CR/PR at Table C‐1. 194 The domestic industry’s gross profit declined from $*** in 2018 to $*** in 2019 and $*** in 2020. Its gross profit was lower in interim 2021, at $***, than in interim 2020, at $***. CR/PR at Table C‐1. 195 The domestic industry’s operating income declined from $*** in 2018 to $*** in 2019 and $*** in 2020. Its operating income was $*** in interim 2020 and its operating losses were $*** in interim 2021. CR/PR at Table C‐1. 196 As a ratio to net sales, the domestic industry’s operating income was *** percent in 2018, *** percent in 2019, *** percent in 2020, *** percent in interim 2020, and *** percent in interim 2021. CR/PR at Table C‐1. 33 steadily over the course of the POI with the domestic industry experiencing net losses in 2020 and interim 2021. 197 Further, net income as a share of net sales declined by *** percentage points from 2018 to 2020, and were *** percentage points lower in interim 2021 than in interim 2020. 198 The domestic industry’s capital expenditures and R&D expenses fluctuated, but declined overall by *** percent and *** percent, respectively, from 2018 to 2020; they were lower in interim 2021 than in interim 2020 by *** percent and *** percent, respectively.199 *** reported negative effects on investment and on growth and development due to subject imports, *** responding U.S. producers did not report any such negative effects.200 In sum, the available evidence in the current record indicates that subject imports materially contributed to the domestic industry’s declining trade and financial performance over the course of the POI. In particular, the volume and market share of subject imports were significant, as were the increases in subject imports’ market share. These subject imports significantly undersold the domestic like product and captured increasing market share from the domestic industry. As the domestic industry lost market share, its production and shipments decreased more than apparent U.S. consumption over the POI and its financial performance declined. Moreover, *** reported negative effects on investment and on growth and development due to subject imports.201 Given these considerations, we conclude for purposes of these preliminary phase investigations that subject imports had a significant adverse impact on the domestic industry. We also have considered whether there are other factors that may have had an impact on the domestic industry to ensure that we are not attributing injury from such other factors to subject merchandise. We recognize that the domestic industry’s performance was likely 197 The domestic industry’s net income declined from $*** in 2018 to $*** in 2019 and net losses of $*** in 2020. Its net income was $*** in interim 2020 and its net losses were $*** in interim 2021. CR/PR at Table C‐1. 198 As a ratio to net sales, the domestic industry’s net income was *** percent in 2018, *** percent in 2019, *** percent in 2020, *** percent in interim 2020, and *** percent in interim 2021. CR/PR at Table C‐1. 199 The domestic industry’s capital expenditures were $*** in 2018, $*** in 2019, $*** in 2020, $*** in interim 2020, and $*** in interim 2021. Its R&D expenses were $*** in 2018, $*** in 2019, $*** in 2020, $*** in interim 2020, and $*** in interim 2021. CR/PR at Table C‐1. 200 CR/PR at Tables VI‐13‐14; M&T U.S. Producer Questionnaire at III‐16. 201 CR/PR at Tables VI‐10‐11. 34 impacted by declining apparent U.S. consumption for FRCs.202 As noted above, however, subject imports gained market share at the expense of domestic producers. Thus, based on the record in these preliminary phase investigations, we cannot conclude that demand trends explain all the declines in the domestic industry’s condition. We will further examine this issue in any final phase investigations.203 In addition, as discussed above, nonsubject imports were generally the largest source of supply to the U.S. market during the POI. 204 The available data indicate that AUVs for nonsubject imports were higher than AUVs for subject imports throughout the POI. 205 We recognize that the market share of nonsubject imports increased from 2018 to 2020, but subject imports’ market share increased by *** percentage points over the same period capturing market share from the domestic industry.206 We therefore find, for purposes of these preliminary determinations, that nonsubject imports do not fully explain the domestic industry’s declines in market share and performance during the POI. 207 208 202 CR/PR at Table C‐1. 203 Strato and Wabtec argue that insofar as the domestic industry was materially injured during the POI, it was related to the COVID‐19 pandemic rather than import competition. See, e.g., Strato Postconf. Br. at 7‐9; Wabtec Postconf. Br. at 8‐9. In any final phase of these investigations, we intend to further examine the impact of the COVID‐19 pandemic and any resultant declines in demand on the performance of the domestic industry. 204 CR/PR at Tables IV‐5 & C‐1. 205 CR/PR at Table C‐1. The AUVs for subject imports were $*** in 2018, $*** in 2019, $*** in 2020, $*** in interim 2020, and $*** in interim 2021. In contrast, the AUVs for nonsubject imports were $*** in 2018, $*** in 2019, $*** in 2020, $*** in interim 2020, and $*** in interim 2021. Id. 206 CR/PR at Table C‐1. The market share of nonsubject imports increased overall by *** percentage points from 2018 to 2020, increasing from *** percent in 2018 to *** percent in 2019 and 2020; their market share was *** percentage points higher in interim 2021, at *** percent, than in interim 2020, at *** percent. Id. Further, the market share of subject imports increased overall by *** percentage points from 2018 to 2020, increasing from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; their market share was *** percentage points higher in interim 2021, at *** percent, than in interim 2020, at *** percent. Id. The domestic industry’s market share declined by *** percentage points from 2018 to 2020, declining from *** percent in 2018 to *** percent in 2019 and *** percent in 2020; its market share was *** percentage points lower in interim 2021, at *** percent, than in interim 2020, at *** percent. Id. 207 In any final phase investigations, we will further examine other factors raised by respondents in order to ensure that we are not attributing injury from other sources to subject imports, including arguments concerning *** pricing behavior in the U.S. market; M&T’s purported geographic disadvantages in terms of higher shipping costs and longer delivery times compared to other domestic producers; M&T’s sale by Trinity in 2018 and loss of a captive buyer to whom it previously charged artificially high prices; and the relationships between M&T and Amsted and their respective affiliates in (Continued…) 35 VI. Conclusion For the reasons stated above, we determine that there is a reasonable indication that an industry in the United States is materially injured by reason of subject imports of FRCs from China that are allegedly sold in the United States at less than fair value and allegedly subsidized by the government of China. (…Continued) Mexico and to what degree, if any, M&T and Amsted shifted production to Mexico during the POI at the expense of their domestic production operations. See, e.g., Strato Postconf. Br. at 27‐33; Wabtec Postconf. Br. at 11‐14, 20‐23, 32‐34. 208 Strato, Wabtec, and TTX also contend that any material injury to the domestic industry was attributable to the fact that domestic producers did not offer FRCs that incorporate what is known as “Bedloe” technology, which is currently available only for subject imports from China. See, e.g., Wabtec Postconf. Br. at 14, 34; Strato Postconf. Br. at 22‐23, 34; TTX Postconf. Br. at 14‐17. Strato emphasizes that it has a long‐term supply agreement with TTX whereby TTX requires Strato to use Bedloe technology, which Strato claims rendered large portions of the market unavailable to the domestic industry during the POI. Strato Postconf. Br. at 22‐23. We intend to examine this issue further in any final phase investigations. I‐1 Part I: Introduction Background These investigations result from petitions filed with the U.S. Department of Commerce (“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by the Coalition of Freight Coupler Producers, consisting of McConway & Torley LLC (“M&T”), Pittsburgh, PA, and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL‐CIO, CLC (“the USW”) on September 29, 2021, alleging that an industry in the United States is materially injured and threatened with material injury by reason of subsidized and less‐than‐fair‐value (“LTFV”) imports of freight rail coupler systems and components (“FRC”)1 from China. The following tabulation provides information relating to the background of these investigations. 2 3 Table I-1 FRC: Information relating to the background and schedule of this proceeding Effective date Action September 29, 2021 Petitions filed with Commerce and the Commission; institution of Commission investigations (86 FR 54997, October 5, 2021) October 20, 2021 Commission’s conference October 19, 2021 Commerce’s notice of initiation AD (86 FR 58864, October 25, 2021) October 19, 2021 Commerce’s notice of initiation CVD (86 FR 58878, October 25, 2021) November 12, 2021 Commission’s vote November 15, 2021 Commission’s determinations November 22, 2021 Commission’s views 1 See the section entitled “The subject merchandise” in Part I of this report for a complete description of the merchandise subject in this proceeding. 2 Pertinent Federal Register notices are referenced in appendix A, and may be found at the Commission’s website (www.usitc.gov). 3 A list of witnesses appearing at the conference is presented in appendix B of this report. I‐2 Statutory criteria Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in making its determinations of injury to an industry in the United States, the Commission‐‐ shall consider (I) the volume of imports of the subject merchandise, (II) the effect of imports of that merchandise on prices in the United States for domestic like products, and (III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States; and. . . may consider such other economic factors as are relevant to the determination regarding whether there is material injury by reason of imports. Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that‐‐4 In evaluating the volume of imports of merchandise, the Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States is significant.. . .In evaluating the effect of imports of such merchandise on prices, the Commission shall consider whether. . .(I) there has been significant price underselling by the imported merchandise as compared with the price of domestic like products of the United States, and (II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.. . . In examining the impact required to be considered under subparagraph (B)(i)(III), the Commission shall evaluate (within the context of the business cycle and conditions of competition that are distinctive to the affected industry) all relevant economic factors which have a bearing on the state of the industry in the United States, including, but not limited to. . . (I) actual and potential decline in output, sales, market share, gross profits, operating profits, net profits, ability to service debt, productivity, return on investments, return on assets, and utilization of capacity, (II) factors affecting domestic prices, (III) actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment, (IV) actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (V) in {an antidumping investigation}, the magnitude of the margin of dumping. 4 Amended by PL 114‐27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015. I‐3 In addition, Section 771(7)(J) of the Act (19 U.S.C. § 1677(7)(J)) provides that— 5 (J) EFFECT OF PROFITABILITY.—The Commission may not determine that there is no material injury or threat of material injury to an industry in the United States merely because that industry is profitable or because the performance of that industry has recently improved. Organization of report Part I of this report presents information on the subject merchandise, alleged subsidy and dumping margins, and domestic like product. Part II of this report presents information on conditions of competition and other relevant economic factors. Part III presents information on the condition of the U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV and V present the volume of subject imports and pricing of domestic and imported products, respectively. Part VI presents information on the financial experience of U.S. producers. Part VII presents the statutory requirements and information obtained for use in the Commission’s consideration of the question of threat of material injury as well as information regarding nonsubject countries. Market summary FRC are generally used to connect freight rail cars together. The leading U.S. producers of FRC are *** and ***, while leading producers of FRC outside the United States include ***. The leading U.S. importers of FRC from China are *** and ***. Leading importers of product from nonsubject Countries (primarily Mexico) include ***. U.S. purchasers of FRC are firms that build new railcars, railcar pooling companies and firms that service existing railcars; leading purchasers that responded to the Commission’s questionnaire include ***, and ***. Apparent U.S. consumption of FRC totaled approximately *** pounds ($***) in 2020. Currently, three firms are known to produce FRC in the United States. U.S. producers’ U.S. shipments of FRC totaled *** pounds ($***) in 2020 and 5 Amended by PL 114‐27 (as signed, June 29, 2015), Trade Preferences Extension Act of 2015. I‐4 accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. U.S. imports from subject sources totaled *** pounds ($***) in 2020 and accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. U.S. imports from nonsubject sources totaled *** pounds ($***) in 2020 and accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. Summary data and data sources A summary of data collected in these investigations is presented in appendix C, table C‐ 1. Except as noted, U.S. industry data are based on questionnaire responses of three firms that accounted for virtually all of U.S. production of FRC during 2020. U.S. imports are based on responses to the Commission’s questionnaires and are somewhat understated. The Commission received two questionnaire responses from Chinese producers that the Commission solicited responses from. Global Trade Atlas data is used in part VII of this report for Chinese exports of a broad category of hooks and other coupling devices, including products outside of the scope of these investigations. Previous and related investigations FRC have not been the subject of any prior countervailing and/or antidumping duty investigations in the United States. Nature and extent of alleged subsidies and sales at LTFV Alleged subsidies On October 25, 2021, Commerce published a notice in the Federal Register of the initiation of its countervailing duty investigation on FRC from China.6 6 For further information on the alleged subsidy programs see Commerce’s notice of initiation and related CVD Initiation Checklist. 86 FR 58878, October 25, 2021. I‐5 Alleged sales at LTFV On October 25, 2021, Commerce published a notice in the Federal Register of the initiation of its antidumping duty investigation on FRC from China.7 Commerce has initiated antidumping duty investigations based on estimated dumping margins of 142.98 and 147.11 percent ad valorem for FRC from China. The subject merchandise Commerce’s scope In the current proceeding, Commerce has defined the scope as follows:8 The scope of this investigation covers freight rail car coupler systems and certain components thereof. Freight rail car coupler systems are composed of, at minimum, four main components (knuckles, coupler bodies, coupler yokes, and follower blocks, as specified below) but may also include other items ( e.g., coupler locks, lock lift assemblies, knuckle pins, knuckle throwers, and rotors). The components covered by the investigation include: (1) E coupler bodies; (2) E/F coupler bodies; (3) F coupler bodies; (4) E yokes; (5) F yokes; (6) E knuckles; (7) F knuckles; (8) E type follower blocks; and (9) F type follower blocks, as set forth by the Association of American Railroads (AAR). The freight rail coupler components are included within the scope of the investigation when imported individually, or in some combination thereof, such as in the form of a coupler fit (a coupler body and knuckle assembled together), independent from a coupler system. Subject freight rail car coupler systems and components are included within the scope whether finished or unfinished, whether imported individually or with other subject or non‐subject components, whether assembled or unassembled, whether mounted or unmounted, or if joined with non‐subject merchandise, such as other non‐subject system parts or a completed rail car. Finishing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, machining, and assembly of various components. When a subject coupler system or subject components are mounted on or to other non‐subject merchandise, such as a rail car, only the coupler system or subject components are covered by the scope. 7 86 FR 58864, October 25, 2021. 8 86 FR 58864, October 25, 2021; 86 FR 58878, October 25, 2021. I‐6 The finished products covered by the scope of this investigation meet or exceed the AAR specifications of M‐211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” or AAR M‐215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)). The country of origin for subject coupler systems and components, whether fully assembled, unfinished or finished, or attached to a rail car, is the country where the subject coupler components were cast or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, including those coupler components attached to a rail car in third countries. Further processing includes, but is not limited to, arc washing, welding, grinding, shot blasting, heat treatment, painting, coating, priming, machining, and assembly of various components. The inclusion, attachment, joining, or assembly of non‐subject components with subject components or coupler systems either in the country of manufacture of the in‐scope product or in a third country does not remove the subject components or coupler systems from the scope. Tariff treatment Based upon the scope set forth by Commerce, information available to the Commission indicates that the merchandise subject to these investigations are imported under subheading 8607.30.1000 of the Harmonized Tariff Schedule of the United States (“HTS”). Freight rail couplers attached to a freight car may also be imported under HTS 8606.10.0000, 8606.30.0000, 8606.91.0000, 8606.92.0000, 8606.99.0130, and 8606.99.0160 or under HTS 9803.00.5000 when the freight rail coupler is attached to a freight car used as an instrument of international traffic. The 2021 general rate of duty is 3.6 percent ad valorem for HTS subheading 8607.30.10; 14 percent ad valorem for HTS subheadings 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01; and free for HTS subheading 9803.00.50. Decisions on the tariff classification and treatment of imported goods are within the authority of U.S. Customs and Border Protection. Section 301 tariff treatment U.S. imports from China subject to these investigations were also subject to additional duties under Section 301 of the Trade Act of 1974. HTS subheadings 8607.30.10, 8606.10.00, 8606.30.00, 8606.91.00, 8606.92.00, and 8606.99.01 were included in the list of articles subject I‐7 to additional 25 percent ad valorem duties effective August 23, 2018. U.S. imports entering under HTS subheading 8607.30.10 were excluded from Section 301 duties effective July 31, 2019 for one year. The exclusion for HTS subheading 8607.30.10 was originally extended until October 2, 2020 and further extended until December 31, 2020, after which U.S. imports were subject to the additional 25 percent ad valorem duties effective July 31, 2020. 9 The product Description and applications FRC are comprised of a system of four main metal components: knuckles, coupler bodies, coupler yokes, and follower blocks; in addition to ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors). The main components of FRC are manufactured in accordance with Association of American Railroad (AAR) standards to ensure FRC in the United States are interoperable.10 Knuckles are typically metal castings in the shape of a hook that pivot on a vertical hinge between a “locked” and an “unlocked” position to allow for interlocking with knuckles of adjacent FRC. Coupler bodies are a metal casting that hold the knuckle and allow it to pivot. The coupler body fits within the coupler yoke, which is a metal casting that attaches the FRC to a freight car. The follower block is a rectangular piece of metal that separates the FRC with the adjacent draft gear of a freight car (designed to absorb some of the forces when connecting freight rail cars). FRC are designed to connect two freight cars together by automatically interlocking the knuckles of both FRC when the freight cars are pushed together, eliminating previously required and potentially dangerous manual input. A manually operated lever on the side of a freight car connects to the FRC and is used to lift the knuckle pin, allowing the knuckles to release and the freight cars to be uncoupled. Freight cars typically use two FRC, one on each of the front and rear of the freight car, to allow for coupling additional freight cars together in greater numbers. In addition to interlocking freight cars together, FRC are also designed to reduce shocks when freight cars are in transit or braking. 9 83 FR 40823, August 16, 2018; 84 FR 37381, July 31, 2019; 84 FR 52553, October 2, 2019; 85 FR 62786, October 5, 2020. 10 AAR standard M‐211 covers foundry and product approval requirements for the manufacture of couplers, coupler yokes, knuckles, follower blocks, and coupler parts. AAR standard M‐215 covers complete coupler systems. I‐8 Figure I-1 Interlocked freight rail couplers Source: https://www.railwayage.com/mechanical/freight-cars/mechanical-couplers/ For the purpose of these investigations FRC and components are classified under the following AAR designations: type E, E/F, and F couplers, type E and F knuckles, type E and F yokes, and type E and F follower blocks. Type E couplers, knuckles, yokes, and follower blocks meet the basic standards set by AAR but do not have the additional features included in type F components. Additional type F features include interlocking wing pockets and lugs that reduce the likelihood of certain freight car derailments as well as reducing the gap between coupled knuckles to improve freight car handling. 11 Type F couplers are typically used for freight cars transporting hazardous materials. Type E/F couplers contain a basic type E knuckle and type F coupler body components. 11 Vantuono, “Mechanical Focus: Couplers,” December 27, 2016, https://www.railwayage.com/mechanical/freight‐cars/mechanical‐couplers/. I‐9 Figure I-2 Type E and F knuckles Type E knuckle Type F knuckle Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/knuckles Figure I-3 Type E and F coupler bodies Type E coupler body Type F coupler body Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/coupler-bodies I‐10 Figure I-4 Type E and F coupler yokes Type E coupler yoke Type F coupler yoke Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/yokes-followers- components Figure I-5 Type E and F follower blocks Type E follower block Type F follower block Source: https://www.wabteccorp.com/freight-car/end-of-car-systems/coupler-system/yokes-followers- components I‐11 Manufacturers of FRC sell their products through two main channels of distribution. The first is to freight car original equipment manufacturers that use FRC in new freight car production. The second is to maintenance companies, freight railroads, and freight car producers that use FRC and individual components as replacement parts in used freight cars.12 Manufacturing processes Freight rail knuckles, coupler bodies, coupler yokes, and follower blocks are typically iron castings manufactured in foundries certified by AAR.13 To begin the process, pig iron and scrap metal are melted in a furnace and poured into molds formed from hardened sand that provide the rough shape for each FRC component. Once the metal has cooled, the hardened sand molds are removed, and any imperfections present in the mold that were transferred to the casting are also removed. The casting undergoes heat treatment processes, such as annealing and tempering, designed to strengthen and harden the metal. Once the metal is hardened, machine tools are used to grind the rough casting into the final desired dimensions, as well as to drill holes and grooves into the components as necessary. Once the specified form is achieved, the components are painted, oiled, or primed to prevent rusting. Lastly, the castings are subjected to several safety and fatigue tests to comply with AAR standards. For complete FRC, the individual casted components are assembled along with additional ancillary parts (e.g., coupler locks, coupler lock lifters, knuckle pins, knuckle throwers, and rotors). These additional parts do not have to be manufactured in foundries certified by AAR but may still be manufactured by the same producers of the FRC components or purchased from secondary manufacturers. 12 Petition, p. 17. 13 Some FRC components are forged from a single piece of steel using dies instead of being cast using molten iron. I‐12 Domestic like product issues No issues with respect to domestic like product have been raised in these investigations. The petitioner proposes that there is a single domestic like product that is co‐extensive with the scope of the investigations. It contends that all domestically produced FRC within the scope share the same general physical characteristics and uses, channels of distribution, common manufacturing facilities, production processes, and employees, customer and producer perceptions, are interchangeable, and are sold within a reasonable range of similar prices.14 No respondents have contested the domestic like product definition for the preliminary phase of these investigations. The petitioner contends that FRC are a separate domestic product from railway or tramway passenger coupler systems (“passenger railway couplers”). It argues that passenger railway couplers have distinct physical characteristics and uses, are not interchangeable with FRC, are distributed through different channels of distribution than FRC, are perceived by customers and producers to be distinct from FRC, require different production processes and production employees, and are sold at a significantly higher price point than FRC.15 The Commission’s questionnaires in these preliminary phase investigations asked for producers and importers to compare FRC and passenger railway couplers using the factors which the Commission typically considers in regarding the appropriate domestic product(s) that are “like” the subject imported product: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4) common manufacturing facilities, production processes, and production employees; (5) customer and producer perceptions; and (6) price. Factor comparison and narrative responses are presented below in tables I‐2, I‐3, and I‐4. 14 Petition, pp. 17‐19; Petitioner’s postconference brief, pp. 6‐9. 15 Petition, pp. 18‐19; Petitioner’s postconference brief, pp. 6‐9. I‐13 Table I-2 FRC: U.S. producers' and U.S. importers' count of comparability factors for freight vs passenger railcars within the Commission's traditional six factor domestic like product analysis Count in number of firms reporting Comparison factors Firm type Fully Mostly Somewhat Never Physical characteristics U.S. producer 0 0 1 1 Interchangeability U.S. producer 0 0 0 2 Channels U.S. producer 0 1 0 1 Manufacturing U.S. producer 0 1 0 1 Perceptions U.S. producer 1 0 0 1 Price U.S. producer 0 0 0 2 Physical characteristics U.S. importer 0 0 2 1 Interchangeability U.S. importer 0 0 0 3 Channels U.S. importer 0 2 1 0 Manufacturing U.S. importer 0 1 1 1 Perceptions U.S. importer 1 0 0 2 Price U.S. importer 0 0 0 3 Source: Compiled from data submitted in response to Commission questionnaires. Note: U.S. producer *** reported no familiarity with products for all comparison factors responses. I‐14 Table I-3 FRC: U.S. producers' narrative responses comparing freight vs passenger railcars within the Commission's traditional six factor domestic like product analysis, by firm and by factor Producer name Comparison factor Narrative explanation for comparability *** Physical characteristics *** *** Physical characteristics *** *** Interchangeability *** *** Interchangeability *** *** Channels *** *** Channels *** *** Manufacturing *** *** Manufacturing *** *** Perceptions *** *** Perceptions *** *** Price *** *** Price *** Source: Compiled from data submitted in response to Commission questionnaires. I‐15 Table I-4 FRC: U.S. importers' narrative responses comparing freight vs passenger railcars within the Commission's traditional six factor domestic like product analysis, by firm and by factor Producer name Comparison factor Narrative explanation for comparability *** Physical characteristics *** *** Physical characteristics *** *** Physical characteristics *** *** Physical characteristics *** *** Interchangeability *** *** Interchangeability *** *** Interchangeability *** *** Interchangeability *** *** Channels *** *** Channels *** *** Channels *** *** Channels *** Table continued on next page. I‐16 Table I-4 Continued FRC: U.S. importers' narrative responses comparing freight vs passenger railcars within the Commission's traditional six factor domestic like product analysis, by firm and by factor Producer name Comparison factor Narrative explanation for comparability *** Manufacturing *** *** Manufacturing *** *** Manufacturing *** *** Manufacturing *** *** Perceptions *** *** Perceptions *** *** Perceptions *** *** Perceptions *** *** Price *** *** Price *** *** Price *** *** Price *** Source: Compiled from data submitted in response to Commission questionnaires. I‐17 Intermediate products The domestic like product proposed by petitioners includes the intermediate, or unfinished products (unfinished and unassembled FRC components) as well as downstream products (finished and complete FRC). Employing the Commission’s semi‐finished analysis for domestic like product, Petitioner contends that in‐scope unfinished and unassembled FRC components are not a separate domestic like product from finished and complete FRC.16 The following presents information on these products relating to the Commission’s semi‐finished like product analysis. Factor comparison responses of U.S. producers and importers regarding differences and similarities between the intermediate and downstream products are presented in table I‐5, while detailed narratives provided by U.S. producers and importers on these five factors are provided in tables I‐6 and I‐7. Table I-5 FRC: U.S. producers' and U.S. importers' responses to the semi-finished product questions Semi-finished factor Firm type No Yes Other uses U.S. producer 2 1 Separate market U.S. producer 2 1 Difference in characteristics U.S. producer 3 0 Difference in cost U.S. producer 3 0 Transformation intensive U.S. producer 3 0 Other uses U.S. importer 3 2 Separate market U.S. importer 1 4 Difference in characteristics U.S. importer 2 2 Difference in cost U.S. importer 2 3 Transformation intensive U.S. importer 2 2 Source: Compiled from data submitted in response to Commission questionnaires. 16 Petition, pp. 19‐21; Petitioner’s postconference brief, pp. 9‐11. I‐18 Table I-6 FRC: U.S. producers' narrative responses to semi-finished product analysis, by firm Producer name Comparison factor Narrative explanation on semi-finished like product factor *** Other uses *** *** Other uses *** *** Separate market *** *** Separate market *** *** Difference in characteristics *** *** Transformation intensive *** Source: Compiled from data submitted in response to Commission questionnaires. Table I-7 FRC: U.S. importers' narrative responses to semi-finished product analysis, by firm Importer name Comparison factor Narrative explanation on semi-finished like product factor *** Other uses *** *** Other uses *** *** Separate market *** *** Separate market *** *** Separate market *** *** Separate market *** *** Difference in characteristics *** *** Difference in characteristics *** *** Difference in cost *** *** Difference in cost *** *** Transformation intensive *** *** Transformation intensive *** Source: Compiled from data submitted in response to Commission questionnaires. II-1 Part II: Conditions of competition in the U.S. market U.S. market characteristics FRC are metal structures used to connect freight railcars together. FRC primarily consist of a coupler body, knuckle, yoke, and follower block.1 The average coupler body replacement rate is 20 years while the average knuckle replacement rate is 5 to 10 years because the knuckle takes the brunt of the force of railcars. Each railcar typically has two complete couplers – one on each end. The U.S. FRC market is supplied by U.S. producers, Chinese imports, and nonsubject imports from Mexico.2 3 There are two sectors, original equipment manufacturers (“OEM”) and maintenance/replacement.4 All FRC must comply with the Association of American Railroads (“AAR”) standards, including imports from China and Mexico.5 FRC may be imported into the United States fully assembled or as subassemblies, with most or all of the integral parts to assemble an FRC into a finished form.6 FRC may also be imported as part of a finished railcar.7 Chinese FRC are subject to section 301 tariffs8 and some FRC raw materials are subject to section 232 tariffs.9 Responding FRC purchasers include a new freight railcar builder and a railcar pooling company (that shares railcars with different railroads).10 1 A complete coupler is a device consisting of a coupler body and knuckle. The yoke forms a pocket for the equipment that connects the coupler to the railcar. The follower block is interposed between the back end of the coupler and the front working end of the yoke. Petition, Volume I, Part I, pp. 8-9. 2 U.S.-produced FRC accounted for *** percent of the U.S. market while Chinese FRC accounted for *** percent in 2020. The remaining *** percent of the U.S. market was supplied by nonsubject imports from Mexico. 3 Responding U.S. producers include ***; responding importers include ***. 4 Strato contends that refurbished and second hand FRC compete directly with new FRC. Strato’s postconference brief, p. 3. 5 Petition, Volume I, Part I, pp. 3, 9-10, 23. 6 Petition, Volume I, Part I, p. 10. 7 There are instances where FRC from China are imported into Mexico, assembled and attached to newly produced freight railcars, and ultimately exported to the United States market via the finished railcar. Petition, Volume I, Part I, pp. 23-24. 8 See below for a discussion of the impact of the section 301 tariffs on FRC. 9 See Part V for a discussion of the impact of the section 232 tariffs on FRC raw materials. 10 The purchasers are ***, respectively. II-2 One importer (***) and no U.S. producers reported changes to the product mix or marketing of FRC since January 1, 2018. *** reported that its patented designs and technological advancements exceed AAR specifications and improve the return on investment for its customers. Apparent U.S. consumption of FRC decreased during 2018-20. Overall, apparent U.S. consumption in 2020 was *** percent lower than in 2018. Channels of distribution U.S. producers sold mainly to the OEM market during 2018-19 and to the maintenance/replacement market during 2020-interim 2021, as shown in table II-1.11 Importers of subject product from China sold mainly to the maintenance/replacement market while importers of nonsubject product from Mexico sold mainly to the OEM market. Table II-1 FRC: Share of U.S. shipments by source, channel of distribution, and period Shares in percent Source Channel 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 United States OEM market *** *** *** *** *** United States Replacement market *** *** *** *** *** China OEM market *** *** *** *** *** China Replacement market *** *** *** *** *** Nonsubject sources OEM market *** *** *** *** *** Nonsubject sources Replacement market *** *** *** *** *** All import sources OEM market *** *** *** *** *** All import sources Replacement market *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 11 M&T reports that shipments to the OEM market can be as high as 75 to 80 percent during periods of high car builds. Conference transcript, pp. 46-47 (Mautino). II-3 Geographic distribution U.S. producers reported selling FRC to all regions in the United States (table II-2). Importers reported selling to all regions in the contiguous United States. For U.S. producers, *** percent of sales were within 100 miles of their production facility, *** percent were between 101 and 1,000 miles, and *** percent were over 1,000 miles. Importers sold *** percent within 100 miles of their U.S. point of shipment, *** percent between 101 and 1,000 miles, and *** percent over 1,000 miles. Table II-2 FRC: Count of U.S. producers’ and U.S. importers’ geographic markets Region U.S. producers China Northeast *** *** Midwest *** *** Southeast *** *** Central Southwest *** *** Mountain *** *** Pacific Coast *** *** Other *** *** All regions (except Other) *** *** Reporting firms 3 2 Source: Compiled from data submitted in response to Commission questionnaires. Note: Other U.S. markets include AK, HI, PR, and VI. II-4 Impact of section 301 tariffs As discussed in Part I, FRC subject to these investigations have been subject to section 301 tariffs beginning in September 2018 of 10 percent ad valorem, which were increased to 25 percent in May 2019.12 *** U.S. producers and *** importers reported that the imposition of tariffs on Chinese-origin products under section 301 have had an impact on the FRC market in the United States; *** U.S. producer did not know. U.S. producers and importers were asked to report the impact of section 301 tariffs on overall demand, supply, prices, or raw material costs (table II-3). Table II-3 FRC: Count of firms' responses regarding the impact of the 301 tariffs on Chinese origin products Impact on Firm type Increase No change Decrease Fluctuate Domestic supply in market U.S. producers *** *** *** *** Domestic supply in market Importers *** *** *** *** China supply in market U.S. producers *** *** *** *** China supply in market Importers *** *** *** *** Other than China supply in market U.S. producers *** *** *** *** Other than China supply in market Importers *** *** *** *** Prices of scope merchandise U.S. producers *** *** *** *** Prices of scope merchandise Importers *** *** *** *** Overall demand in market U.S. producers *** *** *** *** Overall demand in market Importers *** *** *** *** Raw material costs of scope merchandise U.S. producers *** *** *** *** Raw material costs of scope merchandise Importers *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. U.S. producer *** reported that section 301 duties had no impact on domestic production and that exclusions were granted on some FRC and FRC components, exempting some from duties. It also noted that some railcar producers moved production to Mexico to avoid 301 duties. U.S. producer *** reported that section 301 tariffs appear to have impacted the overall market for U.S. producers. Importer *** reported that the availability of imports from India, Russia, and Malaysia in the U.S. market has increased since the imposition of 301 tariffs.13 It also noted that U.S. producers increased domestic pricing while steel prices increased and that overall demand is driven by the railcar market, which has 12 Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 FR 48,000, September 21, 2018; Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 FR 20,459, May 9, 2019. 13 No importers reported imports from these countries in USITC importers’ questionnaire data. II-5 been reduced in recent years. Importer *** reported that U.S. producers increased the price of E50 knuckles within thirty days of the imposition of 301 tariffs. It stated that it had to increase prices between 10-20 percent in order to try to stay competitive in the market. Importer *** reported that two U.S. railcar builders moved production to Mexico prior to the COVID-19 pandemic and capitalized on section 301 tariffs. It also noted that FRC prices increased along with scrap steel prices while demand for FRC decreased. Supply and demand considerations U.S. supply Table II-4 provides a summary of the supply factors regarding FRC from U.S. producers and from China. Both U.S. and Chinese capacity and capacity utilization decreased at similar rates. U.S. inventories increased substantially more than Chinese inventories. Table II-4 FRC: Supply factors that affect the ability to increase shipments to the U.S. market, by country Quantity in 1,000 pounds; ratio and share in percent; count is number of “yes” responses Factor Measure United States China Capacity 2018 Quantity *** *** Capacity 2020 Quantity *** *** Capacity utilization 2018 Ratio *** *** Capacity utilization 2020 Ratio *** *** Inventories to total shipments 2018 Ratio *** *** Inventories to total shipments 2020 Ratio *** *** Home market shipments 2020 Share *** *** Non-US export market shipments 2020 Share *** *** Ability to shift production (firms reporting “yes”) Count *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Responding U.S. producers accounted for virtually all of U.S. production of FRC in 2020. Responding foreign producer/exporter firms accounted for approximately one-fourth of U.S. imports of FRC from China during 2020. For additional data on the number of responding firms and their share of U.S. production and of U.S. imports from each subject country, please refer to Part I, “Summary Data and Data Sources.” II-6 Domestic production Based on available information, U.S. producers of FRC have the ability to respond to changes in demand with large changes in the quantity of shipments of U.S.-produced FRC to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of large amounts of unused capacity, large amounts of inventories, and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include a limited ability to shift shipments from export markets. Domestic capacity and production decreased during 2018-20 but production decreased at a much higher rate, resulting in large decreases in capacity utilization.14 Inventories as a ratio to total shipments increased substantially as U.S. shipments decreased *** percent and inventories increased *** percent during 2018-20.15 Domestic export shipments as a share of U.S. producers’ total shipments decreased from *** percent in 2018 to *** percent in 2020. Other products that producers reportedly can produce on the same equipment as FRC include heavy equipment, mining and agricultural equipment castings, and transit products. Factors affecting U.S. producers’ ability to shift production include setting up the machinery and safety training. Reported production constraints include the physical number of heats that producers can pour and the amount of time it takes to melt a furnace full of steel while pouring steel from another furnace. Subject imports from China Based on available information, producers of FRC from China have the ability to respond to changes in demand with large changes in the quantity of shipments of FRC to the U.S. market. The main contributing factors to this degree of responsiveness of supply are the availability of unused capacity, the ability to shift shipments from inventories, and the ability to shift production to or from alternate products. Factors mitigating responsiveness of supply include the limited ability to shift shipments from non-U.S. export markets. Chinese producers’ capacity, production, and capacity utilization decreased during 2018- 20 while the ratio of inventories to total shipments increased. Factors affecting Chinese producers’ ability to shift production include time, technology development, mold R&D and production, and training for skilled workers. Reported production constraints include retrofitting tooling and equipment, insufficient working capital, and electricity consumption. 14 Capacity decreased by *** percent and production decreased by *** percent during 2018-20. 15 M&T reports that in recent years its customers have been decreasing their inventory levels and that the firm is having to hold more inventory and incur the cost associated with it. Conference transcript, p. 61 (Mautino). II-7 Chinese producers ship a small amount of their FRC production to non-U.S. markets, but no non-U.S. export markets were listed in questionnaire responses. Imports from nonsubject sources Reported nonsubject imports from Mexico accounted for *** percent by quantity of total U.S. imports in 2018, and *** percent by quantity in 2020. Supply constraints *** U.S. producers and *** importers reported that they had not experienced supply constraints since January 1, 2018. Importer *** reported that it has often not been able to supply FRC when a customer requests due to volatile demand and supply chain logistics.16 Importer Strato indicated that the bankruptcy of Columbus Castings in 2016 reduced the U.S. supply by about 50 percent and that U.S. labor and capacity constraints have forced U.S. suppliers to relocate to Mexico.17 U.S. demand Based on available information, the overall demand for FRC is likely to experience small changes in response to changes in price. The main contributing factors are the lack of substitute products and the small cost share of FRC in the production of new freight railcars. End uses and cost share U.S. demand for FRC depends on the demand for U.S.-produced railway freight cars. FRC account for a small share of the cost of new railway freight cars. Reported cost shares for railway freight car production were 1 to 3 percent. Demand for FRC is also driven by the need to repair freight railcars already in service. While new cars need complete FRC, maintenance on existing FRC may only require individual parts.18 16 *** 17 Strato’s postconference brief, pp. 15-16. 18 Petitioner stated that the replacement rate for knuckles is about 5 years. Petition, Volume I, Part I, p. 22, Exhibit I-11. Respondent Strato stated that the replacement rate for its knuckles is about 5 to 10 years. Conference transcript, p. 96 (Foxx). II-8 Business cycles *** U.S. producers and *** importers indicated that the market was subject to business cycles or conditions of competition. U.S. producer *** reported that the business cycle is typically seven years from peak to trough. Importer *** reported an eight-to-ten-year cycle and that downtrends tend to happen with downturns in the economy. Importer *** further reported that during downturns, railcars are put into storage and general maintenance is deferred, reducing demand for FRC further. Importer *** reported that demand in the OEM market is aligned to the number of new cars built while demand for the maintenance parts in the aftermarket is more dependent on Class I railcar traffic volume and is more consistent than the OEM market.19 When asked if there have been any changes in the business cycles or conditions of competition for FRC since January 1, 2018, U.S. producer *** reported that some freight car manufacturers moved production to Mexico to avoid Section 301 duties. Importer *** reported that competition has increased with firms expanding their product offerings. Importer *** reported that Amsted, Columbus Steel, and M&T controlled the U.S. market for many years prior to 2015, then production moved to Mexico and these suppliers reportedly sold FRC casting technology to China. In December 2017, Trinity announced that it would transfer its ownership in M&T to Arcosa, Inc. As part of the sale, Trinity agreed to purchase set amounts of FRC from M&T to decrease annually through 2023.20 Demand trends U.S. producers reported a fluctuation in U.S. and foreign demand for FRC since January 1, 2018; importers reported a fluctuation and a decrease in both U.S. and foreign demand (table II-5). U.S. producer *** reported that demand softened during the COVID-19 pandemic. Importer *** reported reduced demand in the railcar market over the past two years. Importer *** reported a decrease in demand due to the COVID-19 pandemic, Precision Scheduled Railroading (“PSR”),21 a decline in new railcar manufacturing, and OEM factory relocations to Mexico. 19 “The seven private Class I railroads are the largest railway carriers, and account for the majority of the rail infrastructure in the country. They operate over nearly 92,000 route miles across 46 states (not Alaska, Hawaii, New Hampshire or Rhode Island).” https://www.aar.org/integrated-rail-network. 20 Strato’s postconference brief, p. 19. 21 “Under PSR, the freight trains operate on fixed schedules and less stops and fewer trains. The goal is to increase operating margins and reduce costs.” Conference transcript, p. 96 (Foxx). II-9 Table II-5 FRC: Count of firms’ responses regarding overall domestic and foreign demand Market Firm type Increase No change Decrease Fluctuate Domestic demand U.S. producers 0 0 0 2 Domestic demand Importers 0 0 3 2 Foreign demand U.S. producers 0 0 0 2 Foreign demand Importers 1 0 2 2 Source: Compiled from data submitted in response to Commission questionnaires. Demand for FRC is driven by both the production of new railcars as well as the maintenance and repair of railcars that are already in service.22 23 The new railcar market has been highly cyclical in recent decades with several surges and declines as the market follows general trends in the overall economy (figure II-1).24 The number of new railcars in the North American market was about 51 thousand in 2018, 58 thousand in 2019, and 31 thousand in 2020 (the average annual deliveries during 1994-2020 was about 52 thousand).25 Additionally, the number of freight railcars owned and operated by Class I railroads decreased in recent years due to improved utilization (e.g., double-stack container railcars) and the deployment of larger cars.26 M&T reported that most of its product ends up in the Class I rail system.27 Estimates for average annual FRC units in the North American maintenance/replacement market were *** units in 2018, *** units in 2019, and *** units in 2020.28 The maintenance/replacement market is closely tied to railroad revenue per ton miles, which decreased about 30 percent during the COVID-19 pandemic. Additionally, the number of cars in storage and the number of cars scrapped both increased during January 2018-June 2021.29 Maintenance is not conducted on freight railcars that are in storage.30 22 Petition, Volume I, Part I, p. 22. 23 Strato notes that U.S. producers focus primarily on the new railcar market and the maintenance/replacement market to a lesser extent. Strato’s postconference brief, p. 1. 24 The United States experienced economic recessions during 2001, 2007-09, and 2020. 25 Deliveries during January-June 2021 were 16 thousand. 26 U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Statistics Annual Report, 2020. 27 Conference transcript, p. 64 (Mautino). 28 Petition, Volume I, Part I, Exhibit I-11. 29 Conference transcript, p. 94 (Foxx). 30 Conference transcript, p. 126 (Korzeniowski). II-10 Figure II-1 Freight railcars: Deliveries in North America, by year Source: ARCI (American Railway Car Institute), an RSI (Railway Supply Institute) committee, freight railcar deliveries, 1994-2020. https://www.railwayage.com/mechanical/freight-cars/do-we-need-another- north-american-railcar-builder/#. Note: Data associated with this figure are provided in Appendix D. Substitute products U.S. producers and importers reported that there were no substitutes. II-11 Substitutability issues This section will assess the degree to which U.S.-produced FRC and imports of FRC from China can be substituted for one another by examining the importance of certain purchasing factors and the comparability of FRC from domestic and import sources based on those factors. Based on available data, staff believes that there is a moderate-to-high degree of substitutability between domestically produced FRC and FRC imported from China.31 The primary factor contributing to this level of substitutability is the high degree of interchangeability between domestic and subject sources. Factors reducing substitutability include differences in quality, availability, product range, lead times, and certain types of FRC only being available only from subject sources. Factors affecting purchasing decisions Most important purchase factors Purchasers responding to lost sales lost revenue allegations32 were asked to identify the main purchasing factors their firm considered in their purchasing decisions for FRC. Two purchasers responded. The major purchasing factors identified by firms include price/cost, contractual commitments, performance and durability, availability/supply, and customer preference. The most often cited top factor firms consider in their purchasing decisions for FRC was price/cost (2 firms) as shown in table II-6. Contractual commitments and performance and durability were cited as first-most important factors (cited by 1 firm each); price/cost and availability/supply were reported as the second-most important factors (1 firm each); and price/cost and customer preference were cited as the third-most important factors (1 firm each). 31 The degree of substitution between domestic and imported FRC depends upon the extent of product differentiation between the domestic and imported products and reflects how easily purchasers can switch from domestically produced FRC to the FRC imported from subject countries (or vice versa) when prices change. The degree of substitution may include such factors as relative prices (discounts/rebates), quality differences (e.g., grade standards, defect rates, etc.), and differences in sales conditions (e.g., lead times between order and delivery dates, reliability of supply, product services, etc.). 32 This information is compiled from responses by purchasers identified by Petitioners to the lost sales lost revenue allegations. See Part V for additional information. II-12 Table II-6 FRC: Count of ranking of factors used in purchasing decisions as reported by U.S. purchasers, by factor Factor First Second Third Total Price / Cost 0 1 1 2 Contractual commitments 1 0 0 1 Performance and durability 1 0 0 1 Availability / Supply 0 1 0 1 Customer preference 0 0 1 1 All other factors 0 0 0 NA Source: Compiled from data submitted in response to Commission questionnaires. Note: Other factors include quality and annual supplier evaluation review scores. Purchaser *** Chinese sourced FRC. Purchaser TTX reported that it prefers ***, that has demonstrated its ability to perform better than the rest of the industry.33 Lead times U.S. producers reported that *** percent of their commercial shipments were produced-to-order, with lead times averaging *** days. The remaining *** percent of their commercial shipments came from inventories, with lead times averaging *** days. Importers reported that *** percent of their commercial shipments came from inventories (*** percent from U.S. inventories with lead times averaging *** days and *** percent from foreign inventories with lead times averaging *** days). The remaining *** percent of their commercial shipments were produced-to-order, with lead times averaging *** days.34 33 TTX’s postconference brief, pp. 1, 15. 34 Strato reported that lead times during periods of reduced demand are very short and during periods of higher demand, quite long. During periods of low demand, a car builder may start and order within months and Strato needs to have inventory on hand to supply the FRC. When builds are at a peak, it can take as long as two years to get a new car. Conference transcript, pp. 123-124 (Cunkelman). II-13 Comparison of U.S.-produced and imported FRC In order to determine whether U.S.-produced FRC can generally be used in the same applications as imports from China or nonsubject countries, U.S. producers and importers were asked whether the products can always, frequently, sometimes, or never be used interchangeably. As shown in tables II-7 and II-8, U.S. producers and importers reported that products from the United States and China, as well as products from the United States and nonsubject countries (primarily Mexico), can always or frequently be used interchangeably.35 Table II-7 FRC: Count of U.S. producers reporting the interchangeability between FRC produced in the United States and in other countries, by country pair Country pair Always Frequently Sometimes Never U.S. vs. China 1 1 0 0 U.S. vs. other 1 1 0 0 China vs. other 1 1 0 0 Source: Compiled from data submitted in response to Commission questionnaires. Table II-8 FRC: Count of importers reporting the interchangeability between FRC produced in the United States and in other countries, by country pair Country pair Always Frequently Sometimes Never U.S. vs. China 4 1 0 0 U.S. vs. other 3 0 0 0 China vs. other 3 0 0 0 Source: Compiled from data submitted in response to Commission questionnaires. In addition, U.S. producers and importers were asked to assess how often differences other than price were significant in sales of FRC from the United States, subject, or nonsubject countries. As seen in tables II-9 and II-10, most U.S. producers and importers reported that differences other than price were sometimes or never significant in sales of FRC. Importer *** reported that there are always differences other than price between the products from the United States and China, citing differences in transportation network, availability, and product range. 35 As previously mentioned, all FRC must comply with AAR standards, regardless of source, making them highly interchangeable. II-14 Table II-9 FRC: Count of U.S. producers reporting the significance of differences other than price between FRC produced in the United States and in other countries, by country pair Country pair Always Frequently Sometimes Never U.S. vs. China 0 0 1 1 U.S. vs. other 0 0 1 1 China vs. other 0 0 1 1 Source: Compiled from data submitted in response to Commission questionnaires. Table II-10 FRC: Count of importers reporting the significance of differences between FRC produced in the United States and in other countries, by country pair Country pair Always Frequently Sometimes Never U.S. vs. China 1 0 1 2 U.S. vs. other 0 0 1 1 China vs. other 0 0 1 1 Source: Compiled from data submitted in response to Commission questionnaires. U.S. producer M&T typically provides a five-year warranty that is built into the price of its complete couplers and components, which are bundled and passed through to the ultimate car owner.36 Importer Strato reported that warranties for refurbished or reconditioned products are limited and would likely have about a one-year warranty, while acceptable secondhand components are generally offered without a warranty.37 36 Conference transcript, pp. 58, 68 (Mautino). 37 Conference transcript, p. 137 (Cunkelman). III‐1 Part III: U.S. producers’ production, shipments, and employment The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the subsidies and dumping margins was presented in Part I of this report and information on the volume and pricing of imports of the subject merchandise is presented in Part IV and Part V. Information on the other factors specified is presented in this section and/or Part VI and (except as noted) is based on the questionnaire responses of three firms that accounted for all known U.S. production of FRC during 2020. U.S. producers The Commission issued a U.S. producer questionnaire to three firms based on information contained in the petition. All three firms provided usable data on their operations. Staff believes that these responses represent all known U.S. production of FRC. Table III‐1 lists U.S. producers of FRC, their production locations, positions on the petition, and shares of total production. Table III-1 FRC: U.S. producers, their position on the petition, location of production, and share of reported production, 2020 Firm Position on petition Production location(s) Share of production Amsted *** Granite City, IL *** Huron *** Pigeon, MI Pigeon, MI *** M&T Petitioner Pittsburgh, PA *** All firms Various Various 100.0 Source: Compiled from data submitted in response to Commission questionnaires. III‐2 Table III‐2 presents information on U.S. producers’ ownership, related and/or affiliated firms. Table III-2 FRC: U.S. producers' ownership, related and/or affiliated firms Reporting firm Relationship type and related firm Details of relationship *** *** *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. As indicated in U.S. producer responses presented in table III‐2, one U.S. producer, ***, is related to a foreign producer of nonsubject merchandise. No U.S. producers are related to U.S. importers of the subject merchandise. In addition, as discussed in greater detail below, no U.S. producers directly import subject merchandise or purchase the subject merchandise from U.S. importers. Table III‐3 presents U.S. producers’ reported changes in operations since January 1, 2018. In ***. *** reported ***.1 1 ***’s producer questionnaire response, section II‐2a‐2b. III‐3 Table III-3 FRC: U.S. producers' reported changes in operations, since January 1, 2018 Item Firm name and accompanying narrative response Plant closings *** Prolonged shutdowns or curtailments *** Prolonged shutdowns or curtailments *** Other *** Source: Compiled from data submitted in response to Commission questionnaires. U.S. production, capacity, and capacity utilization Table III‐4 and figure III‐1 present U.S. producers’ production, capacity, and capacity utilization. U.S. producers’ capacity decreased from *** pounds in 2018 to *** pounds in 2020, a *** percent decrease during 2018‐20. During the same period, U.S. producers’ production decreased by *** percent, from *** pounds to *** pounds. Capacity utilization also decreased from *** percent to *** percent from 2018 to 2020. U.S. producers’ capacity, production, and capacity utilization were all lower in interim 2021 compared to interim 2020, continuing the trend from 2018‐20. Table III-4 FRC: U.S. producers’ capacity, by firm and period Capacity in 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. III‐4 Table III-4 Continued FRC: U.S. producers’ production, by firm and period Production in 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table III-4 Continued FRC: U.S. producers' capacity utilization ratio, by firm and by period Capacity utilization ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table III-4 Continued FRC: U.S. producers' share of production, by firm and by period Share of production in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Capacity utilization ratio represents the ratio of the U.S. producers’ production to its production capacity. III‐5 Figure III-1 FRC: U.S. producers' capacity, production, and capacity utilization, by period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. III‐6 Alternative products As shown in table III-5, FRC’s share of overall production by U.S. producers on shared equipment increased from *** percent in 2018 to *** percent in 2019 and *** percent in 2020. *** U.S. producers reported producing other products using the same equipment, machinery, or employees as used to produce FRC. These products included ***. Overall capacity declined by *** percent from 2018 to 2019 and by *** percent from 2019 to 2020. 2 Table III-5 FRC: U.S. producers' overall capacity and production on the same equipment as subject production, by period Quantities in 1,000 pounds; shares and ratios in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Overall capacity Quantity *** *** *** *** *** Production: FRC Quantity *** *** *** *** *** Production: Passenger rail couplers Quantity *** *** *** *** *** Production: Other products Quantity *** *** *** *** *** Production: Out-of-scope products Quantity *** *** *** *** *** Production: Total Quantity *** *** *** *** *** Overall capacity utilization Ratio *** *** *** *** *** Production: FRC Share *** *** *** *** *** Production: Passenger rail couplers Share *** *** *** *** *** Production: Other products Share *** *** *** *** *** Production: Out-of-scope products Share *** *** *** *** *** Production: Total Share 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. 2 The decrease of overall capacity was driven by the decrease in ***’s reported overall production capacity during 2018‐20. ***’s producer questionnaire response, section II‐3a. III‐7 U.S. producers’ U.S. shipments and exports Table III‐6 presents U.S. producers’ U.S. shipments, export shipments, and total shipments. U.S. producers did not report any internal consumption and transfers to related parties during 2018‐20. U.S. producers’ U.S. shipments decreased by quantity and by value from 2018‐20 and were lower in interim 2021 compared to interim 2020. *** U.S. producers *** reported export shipments, primarily to ***, which ranged from *** to *** percent of total U.S. producers’ total shipments during 2018‐20. Average unit values of both U.S. shipments and export shipments ***. Table III-6 FRC: U.S. producers’ shipments, by destination and period Quantity in 1,000 pounds; value in 1,000 dollars; unit values in dollars per 1,000 pounds; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 U.S. shipments Quantity *** *** *** *** *** Export shipments Quantity *** *** *** *** *** Total shipments Quantity *** *** *** *** *** U.S. shipments Value *** *** *** *** *** Export shipments Value *** *** *** *** *** Total shipments Value *** *** *** *** *** U.S. shipments Unit value *** *** *** *** *** Export shipments Unit value *** *** *** *** *** Total shipments Unit value *** *** *** *** *** U.S. shipments Share of quantity *** *** *** *** *** Export shipments Share of quantity *** *** *** *** *** Total shipments Share of quantity 100.0 100.0 100.0 100.0 100.0 U.S. shipments Share of value *** *** *** *** *** Export shipments Share of value *** *** *** *** *** Total shipments Share of value 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. The Commission also asked U.S. producers to differentiate their U.S. shipments of FRC between complete FRC systems and FRC components (knuckles and other in‐scope components). Table III‐7 presents U.S. producers’ U.S. shipments by product type. III‐8 While U.S. shipments of all product types decreased during 2018‐20 and were lower in interim 2021 compared to interim 2020, the share of quantity of complete FRC systems decreased from *** percent in 2018 to *** percent in 2020. During the same period, the share of quantity of knuckles increased from *** percent to *** percent, and the share of quantity of all other components increased from *** percent to *** percent. This trend was further observed in the interim 2021 period when compared to interim 2020. Table III-7 FRC: U.S. producers’ U.S. shipments, by product type and period Quantity in 1,000 pounds, shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity *** *** *** *** *** Components: Knuckles Quantity *** *** *** *** *** Components: Other Quantity *** *** *** *** *** Components: All types Quantity *** *** *** *** *** All scope merchandise Quantity *** *** *** *** *** Complete FRC Share of quantity *** *** *** *** *** Components: Knuckles Share of quantity *** *** *** *** *** Components: Other Share of quantity *** *** *** *** *** Components: All types Share of quantity *** *** *** *** *** All scope merchandise Share of quantity 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. III‐9 U.S. producers’ inventories Table III‐8 presents U.S. producers’ end‐of‐period inventories and the ratio of these inventories to U.S. producers’ production, U.S. shipments, and total shipments. U.S. producers' end‐of‐period inventories increased by *** percent during 2018‐20, however, they were lower in interim 2021 compared to interim 2020. Similarly, the ratio of inventories to U.S. production, U.S. shipments, and total shipments increased during 2018‐ 2020, by ***, ***, and *** percentage points, respectively. Inventory ratios to U.S. shipments and total shipments were lower in interim 2021 compared to 2020, while inventory ratio to U.S. production was higher. Table III-8 FRC: U.S. producers' inventories and inventory ratios, by period Quantity in 1,000 pounds; inventory ratios in percent Item 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 End-of-period inventory quantity *** *** *** *** *** Inventory ratio to U.S. production *** *** *** *** *** Inventory ratio to U.S. shipments *** *** *** *** *** Inventory ratio to total shipments *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. III‐10 U.S. producers’ imports and purchases U.S. producers’ imports of FRC are presented in table III‐9. One firm, *** reported importing FRC from nonsubject sources (***). Table III-9 FRC: *** U.S. production, U.S. imports, and ratio of imports to production, by period Quantity in 1,000 pounds; ratios are ratios of imports to U.S. production in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 U.S. production Quantity *** *** *** *** *** Imports from nonsubject sources (***) Quantity *** *** *** *** *** Imports from nonsubject sources (***) to U.S. production Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table III-10 FRC: *** reasons for importing Item Firm's narrative response *** reason for importing *** Source: Compiled from data submitted in response to Commission questionnaires. III‐11 U.S. employment, wages, and productivity Table III‐11 shows U.S. producers’ employment‐related data. The number of production and related workers (“PRWs”) decreased by *** between 2018 and 2020, with a net decline of *** PRWs from *** to ***. There were less PRWs in interim 2021 compared to interim 2020. During 2018‐20, total hours worked declined, while hours worked per PRW remained relatively stable. Hourly wages for PRWs increased by *** percent from 2019 to 2020, after decreasing by *** percent from 2018 to 2019. Productivity decreased by *** percent during 2018‐20. Unit labor costs increased by *** percent, from $*** per unit in 2018 to $*** per unit in 2020, and were *** percent higher in interim 2021 compared to interim 2020. Table III-11 FRC: U.S. producers' employment related data, by period Item 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Production and related workers (PRWs) (number) *** *** *** *** *** Total hours worked (1,000 hours) *** *** *** *** *** Hours worked per PRW (hours) *** *** *** *** *** Wages paid ($1,000) *** *** *** *** *** Hourly wages (dollars per hour) *** *** *** *** *** Productivity (pounds per hour) *** *** *** *** *** Unit labor costs (dollars per 1,000 pounds) *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. IV‐1 Part IV: U.S. imports, apparent U.S. consumption, and market shares U.S. importers The Commission issued importer questionnaires to 22 firms believed to be importers of subject FRC, as well as to all U.S. producers of FRC.1 Usable questionnaire responses were received from five companies, representing *** percent of U.S. imports from China in 2020 under HTS subheading 8607.30.1000, a statistical reporting number that is a “basket” category.2 Table IV‐1 lists all responding U.S. importers of FRC from China and other sources, their locations, and their shares of U.S. imports, in 2020. Three U.S. importers reported imports of FRC from China in 2020 with two firms, *** accounting for *** percent of such imports. Four U.S. importers reported imports of FRC from nonsubject sources, all from Mexico, with *** accounting for over two‐thirds of such imports. Table IV-1 FRC: U.S. importers, their headquarters, and share of total imports by source, 2020 Shares in percent Firm Headquarters China Nonsubject sources All import sources Amsted Chicago, IL *** *** *** Greenbrier Lake Oswego, OR *** *** *** Strato Piscataway, NJ *** *** *** Trinity Rail Dallas, TX *** *** *** Wabtec Pittsburgh, PA *** *** *** All firms Various 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. 1 The Commission issued questionnaires to those firms identified in the petition, along with firms that, based on a review of data from third‐party sources, may have accounted for more than one percent of total imports under HTS subheading 8607.30.1000 in 2020. 2 Twelve firms reported that they did not import FRC into the United States: ***. IV‐2 U.S. imports Table IV‐2 presents data for U.S. imports of FRC from China and all other sources. U.S. imports of FRC from China decreased *** percent by quantity, and *** percent by value from 2018 to 2020. During the same period, U.S. imports of FRC from nonsubject sources increased by *** percent by quantity and *** percent by value from 2018 to 2019, before declining by *** percent by quantity and *** percent by value from 2019 to 2020. U.S. imports of FRC from all sources increased by both quantity and value from 2018 to 2019 before declining by both from 2019 to 2020. Overall, U.S. imports of FRC from all sources increased by *** percent by quantity, and *** percent by value, between 2018 and 2020. U.S. imports of FRC from both China and nonsubject sources were lower in interim 2021 compared to interim 2020. U.S. imports of FRC from China decreased as a share of total imports of FRC by quantity from *** percent in 2018 to *** percent in 2020. During interim 2021 they were *** percent compared to *** percent during interim 2020. Average unit values of U.S. imports from China were lower than those from nonsubject sources across all periods. Average unit values of FRC imports were higher for both Chinese and nonsubject sources in interim 2021 compared to interim 2020. During 2018‐20, U.S. imports of FRC as a ratio to U.S. production increased by *** percentage points for subject imports from China and by *** percentage points for imports from nonsubject sources for an overall increase of *** percentage points. U.S. imports of FRC from both subject and nonsubject sources as a ratio to U.S. production was also higher in interim 2021 compared to interim 2020. The Commission asked U.S. importers to report any imports and shipments of FRC re‐ imported from the United States as U.S. imports from the United States. No responding U.S. importers reported such imports. 3 3 ***. Based on this explanation, staff has removed this data from the data set. IV‐3 Table IV-2 FRC: U.S. imports by source and period Quantity in 1,000 pounds; value in 1,000 dollars; unit values in dollars per 1,000 pounds; ratios to U.S. production; shares and ratios in percent Source Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 China Quantity *** *** *** *** *** Nonsubject sources Quantity *** *** *** *** *** All import sources Quantity *** *** *** *** *** China Value *** *** *** *** *** Nonsubject sources Value *** *** *** *** *** All import sources Value *** *** *** *** *** China Unit value *** *** *** *** *** Nonsubject sources Unit value *** *** *** *** *** All import sources Unit value *** *** *** *** *** China Share of quantity *** *** *** *** *** Nonsubject sources Share of quantity *** *** *** *** *** All import sources Share of quantity 100.0 100.0 100.0 100.0 100.0 China Share of value *** *** *** *** *** Nonsubject sources Share of value *** *** *** *** *** All import sources Share of value 100.0 100.0 100.0 100.0 100.0 China Ratio *** *** *** *** *** Nonsubject sources Ratio *** *** *** *** *** All import sources Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. IV‐4 Figure IV-1 FRC: U.S. imports quantity and average unit value, by source and period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. IV‐5 The Commission also asked U.S. importers to report their U.S. shipments of U.S. imports of FRC between complete FRC, the in‐scope knuckle components, and all other in‐scope components. These data are presented in table IV‐3. From 2018 to 2020, shares of quantity increased from *** percent to *** percent for complete FRC and from *** percent to *** percent for knuckles, while decreasing from *** percent to *** percent for all other components. Table IV-3 FRC: U.S. importers' U.S. shipments of imports from China, by product type and by period Quantity in 1,000 pounds, Shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity *** *** *** *** *** Components: Knuckles Quantity *** *** *** *** *** Components: Other Quantity *** *** *** *** *** Components: All types Quantity *** *** *** *** *** All scope merchandise Quantity *** *** *** *** *** Complete FRC Share of quantity *** *** *** *** *** Components: Knuckles Share of quantity *** *** *** *** *** Components: Other Share of quantity *** *** *** *** *** Components: All types Share of quantity *** *** *** *** *** All scope merchandise Share of quantity 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. IV‐6 Negligibility The statute requires that an investigation be terminated without an injury determination if imports of the subject merchandise are found to be negligible.4 Negligible imports are generally defined in the Act, as amended, as imports from a country of merchandise corresponding to a domestic like product where such imports account for less than 3 percent of the volume of all such merchandise imported into the United States in the most recent 12‐month period for which data are available that precedes the filing of the petition or the initiation of the investigation. However, if there are imports of such merchandise from a number of countries subject to investigations initiated on the same day that individually account for less than 3 percent of the total volume of the subject merchandise, and if the imports from those countries collectively account for more than 7 percent of the volume of all such merchandise imported into the United States during the applicable 12‐month period, then imports from such countries are deemed not to be negligible.5 Imports from China accounted for *** percent of total imports of FRC by quantity during September 2020 through August 2021, as presented in table IV‐4. Table IV-4 FRC: U.S. imports in the 12-month period preceding the filing of the petition, September 2020 through August 2021 Quantity in 1,000 pounds; share of quantity in percent Source of imports Quantity Share of quantity China *** *** Nonsubject sources *** *** All import sources *** 100.0 Source: Compiled from data submitted in response to Commission questionnaires. 4 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1), 1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)). 5 Section 771 (24) of the Act (19 U.S.C § 1677(24)). IV‐7 Apparent U.S. consumption and market shares Table IV‐5 and figure IV‐2 present data on apparent U.S. consumption and U.S. market shares for FRC. Apparent U.S. consumption increased by *** percent by quantity, and by *** percent, by value, from 2018 to 2019 before declining by *** percent by quantity, and by *** percent by value, from 2019 to 2020. Overall, from 2018 to 2020, apparent U.S. consumption declined by *** percent by quantity, from *** pounds to *** pounds and by *** percent by value, from $*** dollars to $*** dollars. Apparent U.S. consumption was also lower in interim 2021 compared to interim 2020. U.S. producers’ share of apparent U.S. consumption decreased from *** percent to *** percent, by quantity, and from *** percent to *** percent, by value, from 2018 to 2020. Subject imports’ share of the U.S. market increased from *** percent to *** percent, by quantity, and from *** percent to *** percent, by value, from 2018 to 2020. The share of nonsubject imports (***) increased from *** percent to *** percent, by quantity, and from *** percent to *** percent, by value, during the same period. U.S. producers’ share of apparent U.S. consumption was lower in interim 2021 compared to interim 2020 while market shares of U.S. shipments of imports from both China and nonsubject sources were higher. IV‐8 Table IV-5 FRC: Apparent U.S. consumption and market shares, by source and by period Quantity in 1,000 pounds; value in 1,000 dollars Source Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 U.S. producers Quantity *** *** *** *** *** China Quantity *** *** *** *** *** Nonsubject sources Quantity *** *** *** *** *** All import sources Quantity *** *** *** *** *** All sources Quantity *** *** *** *** *** U.S. producers Value *** *** *** *** *** China Value *** *** *** *** *** Nonsubject sources Value *** *** *** *** *** All import sources Value *** *** *** *** *** All sources Value *** *** *** *** *** U.S. producers Share of quantity *** *** *** *** *** China Share of quantity *** *** *** *** *** Nonsubject sources Share of quantity *** *** *** *** *** All import sources Share of quantity *** *** *** *** *** All sources Share of quantity 100.0 100.0 100.0 100.0 100.0 U.S. producers Share of value *** *** *** *** *** China Share of value *** *** *** *** *** Nonsubject sources Share of value *** *** *** *** *** All import sources Share of value *** *** *** *** *** All sources Share of value 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. IV‐9 Figure IV-2 FRC: Apparent U.S. consumption, by source and period * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. IV‐10 Tables IV‐6 and IV‐7 present data on apparent U.S. consumption and U.S. market shares for complete FRC and FRC components (knuckles and all other components). Complete FRC accounted for around half of apparent U.S. consumption across all periods. U.S. producers’ share of apparent U.S. consumption for complete FRC decreased from *** percent to *** percent, by quantity, from 2018 to 2020. Subject and nonsubject imports’ share of the U.S. market for complete FRC, by quantity, increased from *** percent to *** percent, and from *** percent to *** percent, respectively, during the same period. U.S. producers’ market share was lower in interim 2021 compared to interim 2020 while market shares of U.S. shipments of imports from both China and nonsubject sources were higher. U.S. producers’ share of apparent U.S. consumption for FRC components also decreased from *** percent to *** percent, by quantity, from 2018 to 2020. During the same period, subject imports’ share of the U.S. market for FRC components, by quantity, increased from *** percent to *** percent, while nonsubject imports’ share increased from *** percent to *** percent. U.S. producers’ market share and U.S. shipments of imports of FRC components from China were lower in interim 2021 compared to interim 2020 while market shares of nonsubject sources were higher. Table IV-6 Complete FRC: U.S. producers' and importers' U.S. shipments, by source and by period Quantities in 1,000 pounds; shares and ratios in percent Source Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 U.S. producers Quantity *** *** *** *** *** China Quantity *** *** *** *** *** Nonsubject sources Quantity *** *** *** *** *** All import sources Quantity *** *** *** *** *** All sources Quantity *** *** *** *** *** U.S. producers Share of quantity *** *** *** *** *** China Share of quantity *** *** *** *** *** Nonsubject sources Share of quantity *** *** *** *** *** All import sources Share of quantity *** *** *** *** *** All sources Share of quantity 100.0 100.0 100.0 100.0 100.0 U.S. producers Ratio to apparent consumption *** *** *** *** *** China Ratio to apparent consumption *** *** *** *** *** Nonsubject sources Ratio to apparent consumption *** *** *** *** *** All import sources Ratio to apparent consumption *** *** *** *** *** All sources Ratio to apparent consumption *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. IV‐11 Table IV-7 FRC components: U.S. producers' and importers' U.S. shipments, by source and by period Quantities in 1,000 pounds; shares and ratios in percent Source Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 U.S. producers Quantity *** *** *** *** *** China Quantity *** *** *** *** *** Nonsubject sources Quantity *** *** *** *** *** All import sources Quantity *** *** *** *** *** All sources Quantity *** *** *** *** *** U.S. producers Share of quantity *** *** *** *** *** China Share of quantity *** *** *** *** *** Nonsubject sources Share of quantity *** *** *** *** *** All import sources Share of quantity *** *** *** *** *** All sources Share of quantity 100.0 100.0 100.0 100.0 100.0 U.S. producers Ratio to apparent consumption *** *** *** *** *** China Ratio to apparent consumption *** *** *** *** *** Nonsubject sources Ratio to apparent consumption *** *** *** *** *** All import sources Ratio to apparent consumption *** *** *** *** *** All sources Ratio to apparent consumption *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. V-1 Part V: Pricing data Factors affecting prices Raw material costs The manufacturing process for FRC includes molding, metal melting, heat treatment,1 finishing, assembly, testing, and quality control. FRC are produced from pig iron and ferrous scrap metal using a standard foundry process; prices for FRC generally follow the price for scrap steel.2 Raw material costs as a share of total cost of goods sold (“COGS”) were *** percent in 2018, *** percent in 2019, and *** percent in 2020.3 Steel scrap prices fluctuated between January 2018 and September 2021, with *** in October 2019 and *** in July 2021 (figure V-1). Steel scrap prices increased overall, generally increasing during 2018, decreasing during 2019, and increasing again during January 2020- September 2021. Overall, prices for no. 1 busheling scrap increased *** percent during January 2018-September 2021, no. 1 heavy melt scrap increased *** percent, and shredded auto scrap increased *** percent. *** U.S. producers and *** importers characterized raw material prices as having increased since January 1, 2018.4 When noting how raw material price changes have affected selling prices for FRC, importer *** reported that its selling prices for FRC had increased because of raw material price increases. 1 Common energy sources for metal melting and heat treatment are electricity and gas. M&T stated that electricity and gas are approximately 25 percent of its costs to produce FRC. The firm noted that most of its electricity is generated by gas and that it experiences large savings because Pittsburgh has relatively low gas rates. Conference transcript, p. 65 (Mautino). 2 Petition, Volume 1, Part I, pp. 10, 29. 3 Costs were *** percent in January-June 2020 and *** percent in January-June 2021. 4 Importer *** also characterized prices as fluctuating. V-2 Figure V-1 Steel scrap: Prices, by month and by source of scrap * * * * * * * Source: American Metal Market LLC. Accessed October 13, 2021. Note: Data associated with this figure are provided in Appendix F. One U.S. producer reported that the imposition of tariffs under section 232 on imported steel/aluminum products caused raw material prices to fluctuate and subsequently caused its selling prices for FRC to fluctuate; the other two U.S. producers reported no change. Three importers reported that the tariffs caused raw material prices to increase with one importer reporting that selling prices for FRC had increased due to higher raw material prices.5 5 Importer *** reported having lost significant contracts as a result of higher prices for FRC. V-3 Transportation costs to the U.S. market Transportation costs for FRC shipped from China to the United States averaged 7.6 percent during 2020. These estimates were derived from official import data and represent the transportation and other charges on imports.6 Importer Strato reports that prices to ship containers from Asia to the United States are surging due to supply chain issues resulting from the COVID-19 pandemic.7 U.S. inland transportation costs *** responding U.S. producers reported that transportation is arranged by the purchaser and did not provide estimates of U.S. inland transportation costs. *** responding importers reported that transportation is arranged by the purchaser and reported transportation costs ranged from 4 to 8 percent.8 Pricing practices Pricing methods U.S. producers and importers reported typically setting prices using transaction-by- transaction negotiations, contracts, and price lists (table V-1).9 U.S. producer M&T reported that price discussions are driven by historical pricing and feedback from customers on the direction of the market.10 The AAR publishes a quarterly survey of major railroads, repair shops, and short-line railroads regarding pricing for FRC components and other products and is used primarily for the maintenance/replacement market.11 6 The estimated transportation costs were obtained by subtracting the customs value from the c.i.f. value of the imports for 2020 and then dividing by the customs value based on the HTS statistical reporting number 8607.30.1000. 7 Strato’s postconference brief, p. 43. 8 Wabtec stated that FRC are large, heavy, and costly to transport. Producers of FRC can obtain a competitive advantage by locating production near freight car builders as Amsted did by moving operations to Mexico. Wabtec’s postconference brief, pp. 13-14. 9 Multiple firms reported using more than one way to set prices. 10 Conference transcript, pp. 66-67 (Lefevre). 11 Conference transcript, pp. 92-93 (Foxx). V-4 Table V-1 FRC: U.S. producers’ and importers’ reported price setting methods, count Method U.S. producers Importers Transaction-by-transaction *** *** Contract *** *** Set price list *** *** Other *** *** Responding firms 3 3 Source: Compiled from data submitted in response to Commission questionnaires. Note: The sum of responses down may not add up to the total number of responding firms as each firm was instructed to check all applicable price setting methods employed. U.S. producers reported selling the majority of their FRC under annual contracts, but also considerable portions on the spot market and under long-term contracts (table V-2).12 Importers reported selling the majority of their FRC pursuant to long-term or annual contracts. Table V-2 FRC: U.S. producers’ and importers’ shares of U.S. commercial shipments by type of sale, 2020 Share in percent Type of sale U.S. producers Importers Long-term contracts *** *** Annual contracts *** *** Short-term contracts *** *** Spot sales *** *** Total 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Because of rounding, figures may not add to the totals shown. *** reported using annual contracts to set prices; *** allowed for price renegotiations, *** did not. U.S. producers’ annual contracts had ***.13 *** reported that annual contracts were indexed to raw material prices.14 *** reported using long-term contracts, *** reported an average of ***. *** allowed for price negotiations, *** fixed the price, and *** indexed to raw material prices on long-term contracts. 12 M&T reported that there are some subtle differences in the type of sale between OEM and replacement/maintenance market FRC but overall, it is generally the same. Conference transcript, p. 59 (Lefevre). 13 *** reported allowing for price renegotiation but also reported fixing the price. 14 Indexes reportedly used by *** include American Metal Market, Ryan’s Notes, Platts, PJM, and Henry Hub. V-5 *** importers reported using annual contracts, ranging from about ***. *** allowed for price renegotiations, *** fixed the price, and *** indexed to raw material prices on long-term contracts.15 *** reported using annual contracts; *** allowed for price negotiations, *** fixed prices, and *** indexed to raw material prices. Sales terms and discounts U.S. producers and importers typically quote prices on *** and ***. U.S. producer *** reported that rebates are offered on a quarterly, annual, or contractual basis. U.S. producer *** offers rebates in support of long-term customer relationships and that it has no discount policy for spot sales. Importer *** offers early payment discounts of 1 to 2 percent to certain customers. Importer *** reported that volume discounts can be given based on excess inventory, spreading costs, and maintaining business for key customers. Importer Wabtec testified that it bundles freight car components as packages, noting that “{c}omponent suppliers will reduce prices on packages, at times losing money on some products to increase sales on others in order to increase the average content per railcar,” which simplifies the buying process and creates cost savings in the OEM market.16 Wabtec can quote packages up to $18,000.17 15 *** reported making price adjustments based on the Producer Price Index and scrap steel indexes. *** reported using X-Rates.com, feigang.net, Freightos Baltic, and CUSTEEL average scrap steel. 16 Conference transcript, pp. 84-85 (Korzeniowski). 17 The firm noted that Amsted can quote packages up to $30,000 and M&T up to $2,000, where the dollar value of the package reflects the size of the portfolio of products that can be offered. Wabtec’s postconference brief, pp. 11-12. V-6 Price data The Commission requested U.S. producers and importers to provide quarterly data for the total quantity and f.o.b. value of the following FRC products shipped to unrelated U.S. customers during January 2018-June 2021. Firms that imported products 1 and/or 2 from China for their own use were requested to provide import purchase cost data.18 Product 1.--SE60, Grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications. Product 2.--SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M-211 and/or AAR M-215 specifications. Product 3.--E50 coupler knuckle, grade E steel, produced to AAR M-211 and/or AAR M- 215 specifications. Product 4.--SY coupler yoke, grade E steel, produced to AAR M-211 and/or AAR M- 215 specifications. Two U.S. producers and two importers provided usable pricing data for sales of the requested products, although not all firms reported pricing for all products for all quarters.19 Pricing data reported by these firms accounted for approximately *** percent of U.S. producers’ shipments of FRC and *** percent of U.S. shipments of subject imports from China in 2020.20 Price data for products 1-4 are presented in tables V-3 to V-6 and figures V-2 to V-5. 18 Only one importer (***) submitted a questionnaire reporting purchase cost data. It was determined that the product the firm imports is out-of-scope in these investigations and its questionnaire was not used. 19 Per-unit pricing data are calculated from total quantity and total value data provided by U.S. producers and importers. The precision and variation of these figures may be affected by rounding, limited quantities, and producer or importer estimates. 20 Pricing coverage is based on U.S. shipments reported in questionnaires. V-7 Table V-3 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and margins of underselling/(overselling), by quarter Price in dollars per unit, quantity in units, margin in percent. Period US price US quantity China price China quantity China margin 2018 Q1 *** *** *** *** *** 2018 Q2 *** *** *** *** *** 2018 Q3 *** *** *** *** *** 2018 Q4 *** *** *** *** *** 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, Grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-8 Figure V-2 FRC: Weighted-average prices and quantities of domestic and imported product 1, by quarter Price of product 1 * * * * * * * Volume of product 1 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 1: SE60, Grade E steel complete coupler assembly, double shelves, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-9 Table V-4 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and margins of underselling/(overselling), by quarter Price in dollars per unit, quantity in units, margin in percent. Period US price US quantity China price China quantity China margin 2018 Q1 *** *** *** *** *** 2018 Q2 *** *** *** *** *** 2018 Q3 *** *** *** *** *** 2018 Q4 *** *** *** *** *** 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-10 Figure V-3 FRC: Weighted-average prices and quantities of domestic and imported product 2, by quarter Price of product 2 * * * * * * * Volume of product 2 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 2: SBE60, grade E steel complete coupler assembly, bottom shelf, 21.5” shank length, produced to AAR M‐211 and/or AAR M‐215 specifications. V-11 Table V-5 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and margins of underselling/(overselling), by quarter Price in dollars per unit, quantity in units, margin in percent. Period US price US quantity China price China quantity China margin 2018 Q1 *** *** *** *** *** 2018 Q2 *** *** *** *** *** 2018 Q3 *** *** *** *** *** 2018 Q4 *** *** *** *** *** 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. V-12 Figure V-4 FRC: Weighted-average prices and quantities of domestic and imported product 3, by quarter Price of product 3 * * * * * * * Volume of product 3 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 3: E50 coupler knuckle, grade E steel, produced to AAR M‐211 and/or AAR M‐215 specifications. V-13 Table V-6 FRC: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and margins of underselling/(overselling), by quarter Price in dollars per unit, quantity in units, margin in percent. Period US price US quantity China price China quantity China margin 2018 Q1 *** *** *** *** *** 2018 Q2 *** *** *** *** *** 2018 Q3 *** *** *** *** *** 2018 Q4 *** *** *** *** *** 2019 Q1 *** *** *** *** *** 2019 Q2 *** *** *** *** *** 2019 Q3 *** *** *** *** *** 2019 Q4 *** *** *** *** *** 2020 Q1 *** *** *** *** *** 2020 Q2 *** *** *** *** *** 2020 Q3 *** *** *** *** *** 2020 Q4 *** *** *** *** *** 2021 Q1 *** *** *** *** *** 2021 Q2 *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. V-14 Figure V-5 FRC: Weighted-average prices and quantities of domestic and imported product 4, by quarter Price of product 4 * * * * * * * Volume of product 4 * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Note: Product 4: SY coupler yoke, grade E steel, produced to AAR M‐211 and/or AAR M‐ 215 specifications. V-15 Price trends In general, prices increased during January 2018-June 2021. Table V-7 summarizes the price trends, by country and by product. As shown in the table, domestic price increases ranged from *** to *** percent during January 2018-June 2021 while import price increases ranged from *** to *** percent.21 22 Table V-7 FRC: Summary of price data, by product and source Volume in units, price in dollars per unit, change in percent Product Source Number of quarters Volume of shipments Low price High price First quarter price Last quarter price Percent change in price over period Product 1 United States *** *** *** *** *** *** *** Product 1 China *** *** *** *** *** *** *** Product 2 United States *** *** *** *** *** *** *** Product 2 China *** *** *** *** *** *** *** Product 3 United States *** *** *** *** *** *** *** Product 3 China *** *** *** *** *** *** *** Product 4 United States *** *** *** *** *** *** *** Product 4 China *** *** *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Percent change column is percentage change from the first quarter 2018 to the second quarter in 2021. Indexed prices of U.S. producers’ and importers’ price data shows the difference in price variation between the two (figures V-6 and V-7). 21 Prices for product 1 from China were first reported in the third quarter of 2018 at ***; the percent increase over the period of July 2018-June 2021 was *** percent. Prices for product 2 from China were first reported in the second quarter of 2018 at ***; the percent increase over the period of July 2018- June 2021 was *** percent. 22 U.S. producer M&T ***. ***, email to USITC staff, October 22, 2021. V-16 Figure V-6 FRC: Indexed U.S. producer prices, by quarter Source: Compiled from data submitted in response to Commission questionnaires. Figure V-7 FRC: Indexed subject U.S. importer prices, by quarter Source: Compiled from data submitted in response to Commission questionnaires. V-17 Price comparisons As shown in table V-8, prices for product imported from China were below those for U.S.-produced product in 40 of 52 instances (*** units); margins of underselling ranged from *** to *** percent. In the remaining 12 instances (*** units), prices for product from China were between *** and *** percent above prices for the domestic product. Table V-8 FRC: Instances of underselling and overselling and the range and average of margins, by product Quantity in units; margin in percent Product Type Number of quarters Quantity Average margin Min margin Max margin Product 1 Underselling 8 *** *** *** *** Product 2 Underselling 6 *** *** *** *** Product 3 Underselling 13 *** *** *** *** Product 4 Underselling 13 *** *** *** *** Total Underselling 40 *** *** *** *** Product 1 Overselling 3 *** *** *** *** Product 2 Overselling 7 *** *** *** *** Product 3 Overselling 1 *** *** *** *** Product 4 Overselling 1 *** *** *** *** Total Overselling 12 *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: These data include only quarters in which there is a comparison between the U.S. and subject product. Lost sales and lost revenue The Commission requested that U.S. producers of FRC report purchasers with which they experienced instances of lost sales or revenue due to competition from imports of FRC from China during January 2018-June 2021. Of the three responding U.S. producers, two reported that they had to either reduce prices or roll back announced price increases, and one firm reported that it had lost sales. One U.S. producer submitted lost sales and lost revenue allegations and identified three firms with which it lost sales and revenue.23 Allegations include ***. 23 The U.S. producer, ***, is part of a coalition that filed the petition on September 29, 2021. V-18 Staff contacted three purchasers and received responses from two purchasers.24 Responding purchasers reported purchasing *** pounds of FRC during 2018-20 (table V-9).25 During 2020, responding purchasers purchased *** percent from U.S. producers, *** percent from China, and *** percent from nonsubject countries. Purchasers were asked about changes in their purchasing patterns from different sources since 2018. *** reported decreasing purchases from domestic producers. Explanations for decreasing purchases of domestic product included, 1) maintaining an inventory of U.S.-produced FRC prior to the period of reduced railcar demand in 2019 and 2020, and 2) import orders had been placed six months before COVID-19 and then the pandemic decreased business in 2020. *** reported purchasing imported FRC from China instead of U.S.-produced product since 2018. *** reported that subject import prices *** lower than U.S.-produced product but that price ***. *** estimated the quantity of FRC from China purchased instead of domestic product (table V-10). *** identified performance and durability of the product as non-price reasons for purchasing imported rather than U.S.-produced product. *** reported not knowing if U.S. producers had reduced prices in order to compete with lower-priced imports from China. 24 The two responding firms were ***; the ***. 25 *** reported that it purchases FRC for attachment to finished railcars. *** reported that it purchased FRC to maintain its existing railcar fleet and that the quantity reported does not include FRC that accompanied new railcars purchased by the firm. V-19 Table V-9 FRC: U.S. purchasers' U.S. purchases and U.S. imports, 2018-20 Quantity in 1,000 pounds, share in percent Purchaser Domestic quantity Subject quantity All other quantity Change in domestic share Change in subject country share *** *** *** *** *** *** *** *** *** *** *** *** All firms *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: All other includes all other sources and unknown sources. Change is the percentage point change in the share of the firm’s total purchases of domestic and/or subject country imports between first and last years. Table V-10 FRC: Purchasers’ responses to purchasing subject imports instead of domestic product Quantity in 1,000 pounds Purchaser Purchased subject imports instead of domestic Imports priced lower Choice based on price Quantity Explanation *** *** *** *** *** *** *** *** *** *** *** *** All firms Yes--1; No--1 Yes--1; No--0 Yes--0; No--1 *** NA Source: Compiled from data submitted in response to Commission questionnaires. VI-1 Part VI: Financial experience of U.S. producers Background1 Three U.S. producers Amsted, Huron and McConway & Torley (“M&T”) provided usable financial results on their FRC operations. *** responding U.S. producers reported financial data on the basis of GAAP and *** responding U.S. producers provided their financial data on a calendar year basis.2 *** produce complete FRC systems and FRC components while *** does not produce any complete FRC systems.3 4 Figure VI-1 presents each responding firm’s share of the total reported net sales quantity in 2020. As depicted, ***. 1 The following abbreviations may be used in the tables and/or text of this section: generally accepted accounting principles (“GAAP”), fiscal year (“FY”), net sales (“NS”), cost of goods sold (“COGS”), selling, general, and administrative expenses (“SG&A expenses”), average unit values (“AUVs”), research and development expenses (“R&D expenses”), and return on assets (“ROA”). 2 ***. 3 ***. Email from ***. October 14, and November 1, 2021. 4 ***. Calculated from data in U.S. producers’ questionnaire response, sections III-9a and III-9b. VI-2 Figure VI-1 FRC: Share of net sales quantity in 2020, by firm * * * * * * * Source: Compiled from data submitted in response to Commission questionnaires. Operations on FRC Table VI-1 presents aggregated data on U.S. producers’ operations in relation to FRC, while table VI-2 presents corresponding changes in AUVs. Table VI-3 presents selected company-specific financial data. VI-3 Table VI-1 FRC: Results of operations of U.S. producers, by item and period Quantity in 1,000 pounds; value in 1,000 dollars; ratios in percent and represent ratio to net sales value Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Total net sales Quantity *** *** *** *** *** Total net sales Value *** *** *** *** *** Raw material costs Value *** *** *** *** *** Direct labor costs Value *** *** *** *** *** Other factory costs Value *** *** *** *** *** COGS Value *** *** *** *** *** Gross profit or (loss) Value *** *** *** *** *** SG&A expenses Value *** *** *** *** *** Operating income or (loss) Value *** *** *** *** *** All other expenses/(income), net Value *** *** *** *** *** Net income or (loss) Value *** *** *** *** *** Depreciation/amortization Value *** *** *** *** *** Cash flow Value *** *** *** *** *** Raw material costs Ratio *** *** *** *** *** Direct labor costs Ratio *** *** *** *** *** Other factory costs Ratio *** *** *** *** *** COGS Ratio *** *** *** *** *** Gross profit Ratio *** *** *** *** *** SG&A expense Ratio *** *** *** *** *** Operating income or (loss) Ratio *** *** *** *** *** Net income or (loss) Ratio *** *** *** *** *** Table continued on next page. VI-4 Table VI-1 Continued FRC: Results of operations of U.S. producers, by item and period Shares in percent and represent share of cost of goods sold; unit values in dollars per 1,000 pound; count in number of firms reporting Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Raw material costs Share *** *** *** *** *** Direct labor costs Share *** *** *** *** *** Other factory costs Share *** *** *** *** *** COGS Share *** *** *** *** *** Total net sales Unit value *** *** *** *** *** Raw material costs Unit value *** *** *** *** *** Direct labor costs Unit value *** *** *** *** *** Other factory costs Unit value *** *** *** *** *** Cost of goods sold Unit value *** *** *** *** *** Gross profit or (loss) Unit value *** *** *** *** *** SG&A expenses Unit value *** *** *** *** *** Operating income or (loss) Unit value *** *** *** *** *** Net income or (loss) Unit value *** *** *** *** *** Operating losses Count *** *** *** *** *** Net losses Count *** *** *** *** *** Data Count *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. VI-5 Table VI-2 FRC: Changes in average per pound values between comparison periods Changes in percent Item 2018-20 2018-19 2019-20 Jan-Jun 2020-21 Total net sales ▲*** ▲*** ▼*** ▲*** Raw material costs ▲*** ▲*** ▼*** ▲*** Direct labor costs ▲*** ▲*** ▲*** ▲*** Other factory costs ▲*** ▲*** ▲*** ▼*** COGS ▲*** ▲*** ▲*** ▲*** Table continued. Table VI-2 Continued FRC: Changes in AUVs between comparison periods Changes in dollars per 1,000 pounds Item 2018-20 2018-19 2019-20 Jan-Jun 2020- 21 Total net sales ▲*** ▲*** ▼*** ▲*** Raw material costs ▲*** ▲*** ▼*** ▲*** Direct labor costs ▲*** ▲*** ▲*** ▲*** Other factory costs ▲*** ▲*** ▲*** ▼*** COGS ▲*** ▲*** ▲*** ▲*** Gross profit or (loss) ▼*** ▼*** ▼*** ▼*** SG&A expense ▲*** ▲*** ▲*** ▲*** Operating income or (loss) ▼*** ▼*** ▼*** ▼*** Net income or (loss) ▼*** ▼*** ▼*** ▼*** Source: Compiled from data submitted in response to Commission questionnaires. VI-6 Table VI-3 FRC: Firm-by-firm total net sales quantity, by period Net sales quantity Quantity in 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm total net sales value, by period Net sales value Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm COGS, by period COGS Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm gross profit or (loss), by period Gross profit or (loss) Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued on next page. VI-7 Table VI-3 Continued FRC: Firm-by-firm selling, SG&A expenses, by period SG&A expenses Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm operating income or (loss), by period Operating income or (loss) Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm net income or (loss), by period Net income or (loss) Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of COGS to net sales value, by period COGS to net sales ratio Ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued on next page. VI-8 Table VI-3 Continued FRC: Firm-by-firm ratio of gross profit or (loss) to net sales value, by period Gross profit or (loss) to net sales ratio Ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of SG&A expenses to net sales value, by period SG&A expenses to net sales ratio Ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of operating income or (loss) to net sales value, by period Operating income or (loss) to net sales ratio Ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm ratio of net income or (loss) to net sales value, by period Net income or (loss) to net sales ratio Ratios in percent Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued on next page. VI-9 Table VI-3 Continued FRC: Firm-by-firm unit net sales value, by period Unit net sales value Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit raw material cost, by period Unit raw material costs Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit direct labor cost, by period Unit direct labor costs Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit other factory costs, by period Unit other factory costs Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued on next page. VI-10 Table VI-3 Continued FRC: Firm-by-firm unit COGS, by period Unit COGS Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit gross profit or (loss), by period Unit gross profit or (loss) Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit SG&A expenses, by period Unit SG&A expenses Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued. Table VI-3 Continued FRC: Firm-by-firm unit operating income or (loss), by period Unit operating income or (loss) Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Table continued on next page. VI-11 Table VI-3 Continued FRC: Firm-by-firm unit net income or (loss), by period Unit net income or (loss) Unit values in dollars per 1,000 pounds Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Net sales Total revenue reflects commercial sales of complete FRC systems and FRC components. As seen in table VI-4 complete FRC systems, knuckles, and all other components accounted for*** percent of total FRC sales quantity, respectively in 2020.5 As shown in table VI-1, total net sales declined by *** and *** percent in quantity and value respectively, during 2018-20 and were also lower in quantity and value in interim 2021 than in interim 2020. *** U.S. producers reported declining sales quantities and values during 2018-20 (***).***.6 7 On an average per pound basis, net sales values increased from $*** to 2018 to $*** in 2019 before declining to $*** in 2020 and were slightly higher in interim 2021 at $*** than interim 2020 at $***. As shown in table VI-3, per pound sales values for *** U.S. producers increased overall from 2018 to 2020 but 5 ***. U.S. producers’ questionnaire response, section III-9b. 6 ***. Email form ***. October 19, 2021. 7 ***. U.S. producers’ questionnaire response, section II-2b, email from ***, November 2, 2021, and email form ***. November 3, 2021. VI-12 varied in trends between the three U.S. producers during the annual and interim periods. Per- pound values for *** were lower in interim 2021 than in interim 2020, while the per pound values reported by *** were higher in interim 2021 than in interim 2020. Table VI-4 details data about the U.S. producers net sales by product type. Table VI-4 FRC: U.S. producers’ net sales, by type and period Quantity in 1,000 pounds, shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity *** *** *** *** *** Components: Knuckles Quantity *** *** *** *** *** Components: Other Quantity *** *** *** *** *** Components: All types Quantity *** *** *** *** *** All scope merchandise Quantity *** *** *** *** *** Complete FRC Share of quantity *** *** *** *** *** Components: Knuckles Share of quantity *** *** *** *** *** Components: Other Share of quantity *** *** *** *** *** Components: All types Share of quantity *** *** *** *** *** All scope merchandise Share of quantity *** *** *** *** *** Table continued. VI-13 Table VI-4 Continued FRC: U.S. producers’ net sales, by type and period Value in 1,000 dollars; shares in percent; unit value in dollars per 1,000 pounds Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Value *** *** *** *** *** Components: Knuckles Value *** *** *** *** *** Components: Other Value *** *** *** *** *** components: All types Value *** *** *** *** *** All scope merchandise Value *** *** *** *** *** Complete FRC Share of value *** *** *** *** *** Components: Knuckles Share of value *** *** *** *** *** Components: Other Share of value *** *** *** *** *** Components: All types Share of value *** *** *** *** *** All scope merchandise Share of value *** *** *** *** *** Complete FRC Unit value *** *** *** *** *** Components: Knuckles Unit value *** *** *** *** *** Components: Other Unit value *** *** *** *** *** components: All types Unit value *** *** *** *** *** All scope merchandise Unit value *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. VI-14 Cost of goods sold and gross profit or loss Raw material costs, direct labor and other factory costs accounted for *** percent of total COGS, respectively, in 2020. Raw material costs, the *** component of COGS during most of the reporting period, decreased by *** percent during 2018-20 percent and were *** percent lower in interim 2021 than in interim 2020. On an average per pound basis, raw material costs increased from $*** in 2018 to $*** in 2020 and were higher in interim 2021 at $*** than in interim 2020 at $***. As seen in table VI-3, *** of the three firms reported an increase in their average per pound values during 2018-20. *** was the only firm to report an increase in its average per pound raw material costs in interim 2021 compared to interim 2020.8 9 As a ratio to net sales, raw material costs increased from *** percent in 2018 to *** in 2020, and were higher in interim 2021 at *** percent compared to interim 2020 at *** percent. Table VI-5 presents details on specific raw material inputs as a share of total raw material costs in 2020. Other material inputs accounted for the largest share of raw material costs at *** percent and included steel busheling, sand, resin, scrap steel, and alloys (ferrosilicon, silicomanganese, molybdenum, and ferrochrome), the remaining *** percent of raw material costs reflect iron. Table VI-5 FRC: Raw material costs in 2020 Value in 1,000 dollars; unit values in dollars per 1,000 pounds; share of value in percent Item Value Unit value Share of value Iron *** *** *** Other material inputs *** *** *** Total, raw materials *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Direct labor costs, the *** share of total COGS during most of the reporting period, declined by *** percent during 2018-20 and were *** percent lower in interim 2021 than in interim 2020. On an average per pound basis, direct labor costs continuously increased from 8 ***. U.S. producers’ questionnaire response, section IV-18. 9 ***. Email from ***. November 2, 2021. VI-15 $*** in 2018 to $*** in 2020. In interim 2021 the average per pound value of direct labor costs also increased from $*** in interim 2020 to $*** in interim 2021. ***.10 As a ratio to net sales, direct labor costs increased from *** percent to *** percent during 2018-20 and were higher in interim 2021 at *** percent compared to interim 2020 at *** percent. Other factory costs, the *** component of COGS decreased by *** percent during 2018- 20 and were*** percent lower in interim 2021 than in interim 2020. On an average per pound basis, other factory costs increased from $*** in 2018 to $*** in 2020 and were slightly lower in interim 2021 at $*** compared to interim 2020 at $***. As seen in table VI-3,*** U.S producers reported an increase in their other factory costs average per pound values during 2018-20, and *** was the only firm to report higher per pound values in interim 2021 compared to interim 2020.11 As a ratio to net sales, other factory costs continuously increased from *** percent in 2018 to *** percent in 2020 and were *** percentage point lower in interim 2021 (*** percent) than in interim 2020 (*** percent). Overall total COGS declined by *** percent from 2018 to 2020 and were*** percent lower in interim 2021 than in interim 2020. On an average per pound basis, COGS increased from $*** in 2018 to $*** in 2020 and were higher in interim 2021 at $*** than in interim 2020 at $***. As a ratio to net sales COGS continuously increased from *** in 2018 to *** percent in 2020 and were higher at *** percent in interim 2021 than in interim 2020 at *** percent. As seen in table VI-1 gross profit irregularly decreased from $*** in 2018 to $*** in 2019 and further declined to $*** in 2020, and was lower in interim 2021 at $*** compared to interim 2020 at $***. As a ratio to net sales, gross profit consistently declined from *** percent in 2018 to *** percent in 2020 and was lower at *** percent in interim 2021 compared to *** percent in interim 2020. On a firm by firm basis, *** U.S. producers reported a decline in gross profits during 2018-20. *** was the *** U.S. producer that reported a loss of $*** in 2020, the firm losses declined in interim 2021 to $*** compared to a loss of $*** in interim 2020. 10 M&T testified that the firm relies heavily on skilled expensive labor during the melting and molding parts of the production process. *** also indicated that it kept a ***. Conference transcript, p.70 (Mautino) and email from ***, October 27, 2021. 11 ***. Email from ***. November 2, 2021. VI-16 SG&A expenses and operating income or loss U.S. producers’ SG&A expenses declined during 2018-20 and were higher in interim 2021 than in interim 2020 driven primarily by ***.12 As seen in table VI-3, *** reported an increase in its reported SG&A expenses in 2018-20 and lower expenses in interim 2021 than in interim 2020.13 The corresponding SG&A expense ratio increased from *** percent in 2018 to *** percent in 2020 and was higher in interim 2021 at *** percent than in interim 2020 at *** percent. Similar to gross profit trends, operating income irregularly declined from $*** in 2018 to $*** in 2019 and $*** in 2020, and declined into an operating loss of $*** in interim 2021 compared to a positive operating income of $*** in interim 2020. As a ratio to net sales, operating income also declined from *** percent in 2018 to *** percent in 2020 and was at a negative *** percent in interim 2021 compared to a positive *** percent in interim 2020.14 All other expenses and net income or loss Classified below the operating income level are interest expenses, other expenses, and other income. In table VI-1, these items are aggregated with the net amount shown. *** of the U.S. producers reported either interest expenses or other income. All other expenses reported solely by *** decreased during 2018-20 and were higher in interim 2021 than in interim 2020.15 Net income declined from $*** in 2018 to $*** in 2019 and further declined into a loss of $*** in 2020. The three firms collectively also reported a net loss of $*** in interim 2020 compared to a positive net income of $*** in interim 2020. 12 ***. Email from ***. November 2, 2021. 13 ***. Email from ***. November 3, 2021. 14 Given the mix of complete FRC systems and FRC components and changes in product mix during the period, a variance analysis is not shown in this section of the report. 15 Other expenses reported by ***. Email from ***. October 28, 2021. VI-17 Capital expenditures and research and development expenses Table VI-6 presents capital expenditures, by firm, and table VI-7 presents R&D expenses, by firm. Tables VI-8 and VI-9 present the firms’ narrative explanations of the nature, focus, and significance of their capital expenditures and R&D expenses, respectively. Capital expenditures increased from 2018 to 2019 then declined in 2020; they were lower in interim 2021 than interim 2020. R&D expenses, reported by *** only, declined irregularly from 2018 to 2020 and were lower in interim 2021 compared to interim 2020. Table VI-6 FRC: U.S. producers’ capital expenditures, by firm and period Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Amsted *** *** *** *** *** Huron *** *** *** *** *** M&T *** *** *** *** *** All firms *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-7 FRC: U.S. producers’ R&D expenses, by firm and period Value in 1,000 dollars Firm 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 *** *** *** *** *** *** All firms *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-8 FRC: Narrative descriptions of U.S. producers’ capital expenditures, by firm Firm Narrative explanation Amsted *** Huron *** M&T *** Source: Compiled from data submitted in response to Commission questionnaires. VI-18 Table VI-9 FRC: Narrative descriptions of U.S. producers’ R&D expenses, by firm Firm Narrative explanation *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Assets and return on assets Table VI-10 presents data on the U.S. producers’ total assets while table VI-11 presents their operating ROA.16 Table VI-12 presents U.S. producers’ narrative responses explaining their major asset categories and any significant changes in asset levels over time. Total assets declined from $*** in 2018 to $*** in 2020. *** accounted for the largest share of total net assets while *** accounted for the majority of the decline. Return on assets also declined from *** percent in 2020 to *** percent in 2020.17 Table VI-10 FRC: U.S. producers’ total net assets, by firm and period Value in 1,000 dollars Firm 2018 2019 2020 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 16 The operating ROA is calculated as operating income divided by total assets. With respect to a firm’s overall operations, the total asset value reflects an aggregation of a number of assets which are generally not product specific. Thus, high-level allocations are generally required in order to report a total asset value for FRC. 17 ***. Email from ***. November 3, 2021. VI-19 Table VI-11 FRC: U.S. producers’ ROA, by firm and period Ratio in percent Firm 2018 2019 2020 Amsted *** *** *** Huron *** *** *** M&T *** *** *** All firms *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Table VI-12 FRC: Narrative descriptions of U.S. producers’ total net assets, by firm Firm Narrative explanation Amsted *** M&T *** Source: Compiled from data submitted in response to Commission questionnaires. Capital and investment The Commission requested U.S. producers of FRC to describe any actual or potential negative effects of imports of FRC from China on their firms’ growth, investment, ability to raise capital, development and production efforts, or the scale of capital investments. Table VI-13 presents the number of firms reporting an impact in each category and table VI-14 provides the U.S. producers’ narrative responses. VI-20 Table VI-13 FRC: Count of firms indicating actual and anticipated negative effects of imports from subject sources on investment, growth, and development since January 1, 2020, by effect Number of firms reporting Effect Category Count Cancellation, postponement, or rejection of expansion projects Investment 1 Denial or rejection of investment proposal Investment 0 Reduction in the size of capital investments Investment 1 Return on specific investments negatively impacted Investment 1 Other investment effects Investment 0 Any negative effects on investment Investment 1 Rejection of bank loans Growth 0 Lowering of credit rating Growth 0 Problem related to the issue of stocks or bonds Growth 0 Ability to service debt Growth 0 Other growth and development effects Growth 1 Any negative effects on growth and development Growth 1 Anticipated negative effects of imports Future 1 Source: Compiled from data submitted in response to Commission questionnaires. Note: ***. VI-21 Table VI-14 FRC: Narratives relating to actual and anticipated negative effects of imports on investment, growth, and development, since January 1, 2020 Item Firm name and accompanying narrative response Cancellation, postponement, or rejection of expansion projects *** Reduction in the size of capital investments *** Return on specific investments negatively impacted *** Other effects on growth and development *** Anticipated effects of imports *** Anticipated effects of imports *** Source: Compiled from data submitted in response to Commission questionnaires. VII‐1 Part VII: Threat considerations and information on nonsubject countries Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that— In determining whether an industry in the United States is threatened with material injury by reason of imports (or sales for importation) of the subject merchandise, the Commission shall consider, among other relevant economic factors 1‐‐ (I) if a countervailable subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and whether imports of the subject merchandise are likely to increase, (II) any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports, (III) a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports, (IV) whether imports of the subject merchandise are entering at prices that are likely to have a significant depressing or suppressing effect on domestic prices, and are likely to increase demand for further imports, (V) inventories of the subject merchandise, 1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider {these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted under this title. The presence or absence of any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination may not be made on the basis of mere conjecture or supposition.” VII‐2 (VI) the potential for product‐shifting if production facilities in the foreign country, which can be used to produce the subject merchandise, are currently being used to produce other products, (VII) in any investigation under this title which involves imports of both a raw agricultural product (within the meaning of paragraph (4)(E)(iv)) and any product processed from such raw agricultural product, the likelihood that there will be increased imports, by reason of product shifting, if there is an affirmative determination by the Commission under section 705(b)(1) or 735(b)(1) with respect to either the raw agricultural product or the processed agricultural product (but not both), (VIII) the actual and potential negative effects on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the domestic like product, and (IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually being imported at the time). 2 Information on the nature of the alleged subsidies was presented earlier in this report; information on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and information on the effects of imports of the subject merchandise on U.S. producers’ existing development and production efforts is presented in Part VI. Information on inventories of the subject merchandise; foreign producers’ operations, including the potential for “product‐shifting;” any other threat indicators, if applicable; and any dumping in third‐ country markets, follows. Also presented in this section of the report is information obtained for consideration by the Commission on nonsubject countries. 2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries (as evidenced by dumping findings or antidumping remedies in other WTO member markets against the same class or kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material injury to the domestic industry.” VII‐3 The industry in China According to the Global Trade Atlas (“GTA”) HS subheading 8607.30 (a broad category that in addition to FRC includes hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles), China leads the world in such exports in terms of value, accounting for 23.1 percent of exports in 2020 – up from 18.3 percent in 2018. The Commission issued foreign producers’ or exporters’ questionnaires to eight firms believed to produce and/or export FRC from China.3 Usable responses to the Commission’s questionnaire were received from two firms: Tongyao, and Qingdao Lianshan Casting Co.,Ltd (“Lianshan”). 4 These firms’ exports to the United States accounted for approximately *** percent of U.S. imports of FRC from China in 2020.5 According to estimates requested of the responding producers in China, the production of FRC in China reported in questionnaires accounts for approximately *** percent of overall production of FRC in China. Table VII‐1 presents information on the FRC operations of the responding producers and exporters in China. Table VII-1 FRC: Summary data on firms in China, 2020 Quantity in 1,000 pounds; shares in percent Firm Production (1,000 pounds) Share of reported production (percent) Exports to the United States (1,000 pounds) Share of reported exports to the United States (percent) Total shipments (1,000 pounds) Share of firm's total shipments exported to the United States (percent) Tongyao *** *** *** *** *** *** Lianshan *** *** *** *** *** *** All firms *** 100.0 *** 100.0 *** *** Source: Compiled from data submitted in response to Commission questionnaires. 3 These firms were identified through a review of information submitted in the petition and presented in third‐party sources. 4 *** provided an incomplete questionnaire response missing several data. Please see table notes in this section for further detail. 5 This calculation is based on the ratio of reported exports of FRC from China to the United States to official import statistics (which may be overstated, as statistical reporting number 8607.30.1000 is a “basket” category). VII‐4 Changes in operations Table VII‐2 presents operational and organizational changes since January 1, 2018 reported by responding producers in China. Table VII-2 FRC: Reported changes in operations by producers in China, since January 1, 2018 Item Firm name and accompanying narrative response Prolonged shutdowns or curtailments *** Source: Compiled from data submitted in response to Commission questionnaires. Operations on FRC Table VII‐3 presents information on the FRC operations of the responding producers and exporters in China. FRC capacity remained relatively constant during 2018‐20. FRC production decreased by *** percent from 2018 to 2019, and by *** percent from 2019 to 2020, a decrease from *** million pounds to *** million pounds during 2018‐20. Capacity is projected to remain the same while projected production of FRC for calendar years 2021 and 2022 are near production levels for 2019 and 2018, respectively. This trend reflects the impact of ***. Capacity utilization decreased from *** percent in 2018 to *** percent in 2020 but was *** in interim 2021 compared to interim 2020 and projected to ***. Total home market shipments and export shipments both decreased during 2018‐20, by *** percent and by *** percent respectively. Export shipments to the United States decreased by *** percent and export shipments to other markets decreased by *** percent during this period. Export shipments to the United States as a share of total shipments increased from *** percent to *** percent during 2018‐20. Total home market shipments as a share of total shipments decreased by *** percentage points during 2018‐20, while export shipments to other markets as a share of total shipments increased by *** percentage points. VII‐5 Table VII-3 FRC: Data for producers in China, by period Quantity in 1,000 pounds Item 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Projection 2021 Projection 2022 Capacity *** *** *** *** *** *** *** Production *** *** *** *** *** *** *** End-of-period inventories *** *** *** *** *** *** *** Internal consumption *** *** *** *** *** *** *** Commercial home market shipments *** *** *** *** *** *** *** Home market shipments *** *** *** *** *** *** *** Exports to the United States *** *** *** *** *** *** *** Exports to all other markets *** *** *** *** *** *** *** Export shipments *** *** *** *** *** *** *** Table continued. VII‐6 Table VII-3 Continued FRC: Data on producers in China, by period Shares and ratios in percent Item 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Projection 2021 Projection 2022 Capacity utilization ratio *** *** *** *** *** *** *** Inventory ratio to production *** *** *** *** *** *** *** Inventory ratio to total shipments *** *** *** *** *** *** *** Internal consumption share *** *** *** *** *** *** *** Commercial home market shipments share *** *** *** *** *** *** *** Home market shipments share *** *** *** *** *** *** *** Exports to the United States share *** *** *** *** *** *** *** Exports to all other markets share *** *** *** *** *** *** *** Export shipments share *** *** *** *** *** *** *** Total shipments share 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: *** did not report beginning or end--of-period inventories, home market shipments, or export figures for projected calendar years 2021 and 2022. VII‐7 Alternative products As shown in table VII‐4, responding firms in China produced other products on the same equipment and machinery used to produce FRC. Other products included *** with FRC production accounting for about *** of total production during 2018‐20. Reported factors affecting the ability to switch production include ***. Table VII-4 FRC: Overall capacity and production on the same equipment as in-scope production by producers in China, by period Quantities in 1,000 pounds; shares and ratios in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Overall capacity Quantity *** *** *** *** *** Production: FRC Quantity *** *** *** *** *** Production: Passenger rail couplers Quantity *** *** *** *** *** Production: Other products Quantity *** *** *** *** *** Production: Out-of-scope Quantity *** *** *** *** *** Production: Total Quantity *** *** *** *** *** Overall capacity utilization Ratio *** *** *** *** *** Production: FRC Share *** *** *** *** *** Production: Passenger rail couplers Share *** *** *** *** *** Production: Other products Share *** *** *** *** *** Production: Out-of-scope Share *** *** *** *** *** Production: Total Share 100.0 100.0 100.0 100.0 100.0 Source: Compiled from data submitted in response to Commission questionnaires. Note: Data presented does not include *** as it did not report usable data. VII‐8 Exports According to GTA, the leading export markets for hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles from China are the Unites States, Australia, and Mexico (table VII‐5). During 2020, the United States was the top export market for such merchandise from China, accounting for 41.3 percent, followed by Australia, accounting for 14.6 percent, and Mexico, accounting for 10.6 percent. Table VII-5 Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Exports from China, by destination market and by period Quantity in 1,000 pounds; value in 1,000 dollars Destination market Measure 2018 2019 2020 United States Quantity 62,361 56,027 27,823 Australia Quantity 5,406 8,995 9,834 Mexico Quantity 6,313 17,200 7,103 Canada Quantity 3,741 6,813 4,937 Hong Kong Quantity 81 95 3,401 Russia Quantity 1,661 4,313 2,253 India Quantity 1,896 2,714 2,243 Germany Quantity 1,501 1,403 1,641 Poland Quantity 1,518 1,016 1,119 All other destination markets Quantity 9,322 9,242 6,935 All destination markets Quantity 93,800 107,817 67,288 United States Value 73,813 65,880 34,722 Australia Value 13,543 22,842 30,085 Mexico Value 6,881 15,624 6,629 Canada Value 7,089 9,343 5,932 Hong Kong Value 1,179 1,851 54,325 Russia Value 1,605 6,553 4,868 India Value 7,930 9,253 7,544 Germany Value 6,694 8,773 11,378 Poland Value 7,687 4,311 4,675 All other destination markets Value 35,471 39,668 34,209 All destination markets Value 161,892 184,097 194,365 Table continued. VII‐9 Table VII-5 Continued Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Exports from China, by destination market and by period Unit values in dollars per 1,000 pounds; shares in percent Destination market Measure 2018 2019 2020 United States Unit value 1,184 1,176 1,248 Australia Unit value 2,505 2,539 3,059 Mexico Unit value 1,090 908 933 Canada Unit value 1,895 1,371 1,201 Hong Kong Unit value 14,583 19,518 15,974 Russia Unit value 966 1,519 2,161 India Unit value 4,183 3,409 3,364 Germany Unit value 4,461 6,252 6,934 Poland Unit value 5,063 4,244 4,176 All other destination markets Unit value 3,805 4,292 4,933 All destination markets Unit value 1,726 1,707 2,889 United States Share of quantity 66.5 52.0 41.3 Australia Share of quantity 5.8 8.3 14.6 Mexico Share of quantity 6.7 16.0 10.6 Canada Share of quantity 4.0 6.3 7.3 Hong Kong Share of quantity 0.1 0.1 5.1 Russia Share of quantity 1.8 4.0 3.3 India Share of quantity 2.0 2.5 3.3 Germany Share of quantity 1.6 1.3 2.4 Poland Share of quantity 1.6 0.9 1.7 All other destination markets Share of quantity 9.9 8.6 10.3 All destination markets Share of quantity 100.0 100.0 100.0 Source: Official exports statistics under HS subheading 8607.30 as reported by China Customs in the Global Trade Atlas database, accessed October 6th, 2021. Note: United States is shown at the top. All remaining top export destinations are shown in descending order of 2020 data. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. United States is shown at the top, all remaining top export destinations shown in descending order of 2020 data. VII‐10 U.S. inventories of imported merchandise Table VII‐6 presents data on U.S. importers’ reported inventories of FRC. Inventories of FRC imports from China decreased by *** percent from 2018 to 2020, while inventories of FRC imports from nonsubject sources increased by *** percent. 6 Inventories of both FRC imports from China and nonsubject sources were lower in interim 2021 compared to interim 2020. The ratio of importers’ inventories to U.S. shipments of imports of FRC from China decreased from 2018 to 2020 from *** percent to *** percent while the ratio of importers’ inventories to U.S. shipments of imports of FRC from nonsubject sources increased from *** percent to *** percent during the same period. These ratios were both lower in interim 2021 compared to interim 2020. Table VII-6 FRC: U.S. importers' end-of-period inventories of imports, by source and by period Quantity in 1,000 pounds; ratios in percent Measure Source 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Inventories quantity China *** *** *** *** *** Ratio to imports China *** *** *** *** *** Ratio to U.S. shipments of imports China *** *** *** *** *** Ratio to total shipments of imports China *** *** *** *** *** Inventories quantity Nonsubject *** *** *** *** *** Ratio to imports Nonsubject *** *** *** *** *** Ratio to U.S. shipments of imports Nonsubject *** *** *** *** *** Ratio to total shipments of imports Nonsubject *** *** *** *** *** Inventories quantity All *** *** *** *** *** Ratio to imports All *** *** *** *** *** Ratio to U.S. shipments of imports All *** *** *** *** *** Ratio to total shipments of imports All *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. 6 *** accounted for the vast majority of increased inventory of FRC from nonsubject sources (Mexico) in 2020. VII‐11 U.S. importers’ outstanding orders The Commission requested importers to indicate whether they imported or arranged for the importation of FRC from China and other sources after June 30, 2021. Four of five responding firms indicated they had arranged FRC imports. For each responding firm, the quantity of arranged FRC imports was lower in the 2022 periods compared to the 2021 periods. These data are presented in table VII‐7. Table VII-7 FRC: Arranged imports, by source and by period Quantity in 1,000 pounds Source of arranged imports Jul-Sep 2021 Oct-Dec 2021 Jan-Mar 2022 Apr-Jun 2022 Total China *** *** *** *** *** Nonsubject sources *** *** *** *** *** All import sources *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Third‐country trade actions There are no known antidumping or countervailing duty orders on FRC in third‐country markets. Information on nonsubject countries Global exports for China and the largest nonsubject countries are presented in table VII‐ 8. There are AAR certified manufacturing plants for FRC components in Mexico and India, in addition to facilities in the United States and China. ASF‐K de Mexico, S. de R. L. de C.V. Sahagun manufactures freight couplers, knuckles, and yokes in Mexico.7 Texmaco Rail and Engineering Limited (“Texmaco”) manufactures freight yokes in India. 8 Texmaco recently added new yoke designs, hoping to increase its exports to the U.S. market.9 Petitioner believes that production of freight cars in Mexico increased after implementation of Section 301 duties on FRC. Instead of importing FRC from China into the United States that would be subject to Section 301 tariffs, producers moved manufacturing to 7 ASF‐K de Mexico, S. de R. L. de C.V. Sahagun is owned by ASF‐Keystone, which is a division of Amsted Industries’ Amsted Rail Group. 8 Petition, Exhibit I‐3. 9 Texmaco, Annual Report 2020‐21, p. 26. VII‐12 Mexico. FRC from China would then be installed on freight cars in Mexico, and those freight cars would subsequently be exported to the United States.10 Table VII-8 Hooks and other coupling devices, buffers and parts thereof, for railway or tramway vehicles: Global exports, by reporting country and by period Value in 1,000 dollars, shares in percent Exporting country Measure 2018 2019 2020 United States Value 175,883 173,140 95,692 China Value 161,892 184,097 194,365 Germany Value 144,183 151,104 141,927 Poland Value 94,445 96,742 95,699 Hong Kong Value 23,034 23,137 72,129 Sweden Value 73,832 66,045 56,557 Czech Republic Value 26,601 34,349 45,694 United Kingdom HMRC Value 50,941 31,351 28,546 Russia Value 32,434 27,754 19,807 Mexico Value 24,016 18,373 17,405 Japan Value 18,103 15,769 12,558 Switzerland Value 2,721 7,956 10,372 All other exporters Value 57,652 62,793 49,653 All reporting exporters Value 885,738 892,610 840,405 United States Share of value 19.9 19.4 11.4 China Share of value 18.3 20.6 23.1 Germany Share of value 16.3 16.9 16.9 Poland Share of value 10.7 10.8 11.4 Hong Kong Share of value 2.6 2.6 8.6 Sweden Share of value 8.3 7.4 6.7 Czech Republic Share of value 3.0 3.8 5.4 United Kingdom HMRC Share of value 5.8 3.5 3.4 Russia Share of value 3.7 3.1 2.4 Mexico Share of value 2.7 2.1 2.1 Japan Share of value 2.0 1.8 1.5 Switzerland Share of value 0.3 0.9 1.2 All other exporters Share of value 6.5 7.0 5.9 All reporting exporters Share of value 100.0 100.0 100.0 Source: Official exports statistics under HS subheading 8607.30 as reported by various national statistical authorities in the Global Trade Atlas database, accessed October 6th, 2021. Note: United States is shown at the top followed by the countries under investigation, all remaining top exporting countries in descending order of 2020 data. 10 Petition, pp. 23‐24. A‐1 APPENDIX A FEDERAL REGISTER NOTICES A‐3 The Commission makes available notices relevant to its investigations and reviews on its website, www.usitc.gov. In addition, the following tabulation presents, in chronological order, Federal Register notices issued by the Commission and Commerce during the current proceeding. Citation Title Link 86 FR 54997, September 29, 2021 Freight Rail Coupler Systems and Components From China; Institution of Anti‐Dumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations https://www.govinfo.gov/c ontent/pkg/FR‐2021‐10‐ 05/pdf/2021‐21725.pdf 86 FR 58864, October 19, 2021 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Initiation of Less‐Than‐Fair‐Value Investigation https://www.govinfo.gov/c ontent/pkg/FR‐2021‐10‐ 25/pdf/2021‐23231.pdf 86 FR 58878, October 19, 2021 Freight Rail Coupler Systems and Certain Components Thereof From the People's Republic of China: Initiation of Countervailing Duty Investigation https://www.govinfo.gov/c ontent/pkg/FR‐2021‐10‐ 25/pdf/2021‐23232.pdf A‐4 B‐1 APPENDIX B LIST OF STAFF CONFERENCE WITNESSES B‐3 CALENDAR OF PUBLIC PRELIMINARY CONFERENCE Those listed below appeared in the United States International Trade Commission’s preliminary conference via videoconference: Subject: Freight Rail Coupler Systems and Components from China Inv. Nos.: 701-TA-670 and 731-TA-1570 (Preliminary) Date and Time: October 20, 2021 - 9:30 a.m. OPENING REMARKS: In Support of Imposition (Daniel B. Pickard, Wiley Rein LLP) In Opposition to Imposition (David Morrell, Jones Day) In Support of the Imposition of Antidumping and Countervailing Duty Orders: Wiley Rein LLP Washington, DC on behalf of Coalition of Freight Coupler Producers Chris Lefevre, Director of Sales, McConway & Torley, LLC Scott Mautino, Executive Vice President, McConway & Torley, LLC Antonio Wellmaker, USW (President of USW Local 1063) Amy E. Sherman, International Trade Analyst, Wiley Rein LLP Daniel B. Pickard ) Robert E. DeFrancesco, III ) – OF COUNSEL Jake R. Frischknecht ) B‐4 In Opposition to the Imposition of Antidumping and Countervailing Duty Orders: Jones Day Washington, DC on behalf of Wabtec Corporation Mickey Korzeniowski, Vice President, Components Group, Wabtec Corporation David Morrell ) ) – OF COUNSEL Kevin Garvey ) Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP Washington, DC on behalf of Strato, Inc. Mike Foxx, CEO, Strato Inc. Brian Cunkelman, President, Strato Inc. Dan Foxx, CIO, Strato Inc. Andrew T. Schutz ) ) – OF COUNSEL Michael S. Holton ) REBUTTAL/CLOSING REMARKS: In Support of Imposition (Daniel B. Pickard and Robert E. DeFrancesco, III, Wiley Rein LLP) In Opposition to Imposition (Andrew T. Schutz, Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP) -END- C‐1 APPENDIX C SUMMARY DATA Table C-1 FRC: Summary data concerning the U.S. market, 2018-20, January to June 2020, and January to June 2021 Jan-Jun 2018 2019 2020 2020 2021 2018-20 2018-19 2019-20 2020-21 U.S. consumption quantity: Amount...................................................... *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Producers' share (fn1)............................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Importers' share (fn1): China...................................................... *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Nonsubject sources................................ *** *** *** *** *** ▲*** ▲*** ▼*** ▲*** All import sources................................ *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** U.S. consumption value: Amount...................................................... *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Producers' share (fn1)............................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Importers' share (fn1): China...................................................... *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Nonsubject sources................................ *** *** *** *** *** ▲*** ▲*** ▼*** ▲*** All import sources................................ *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** U.S. importers’ U.S. shipments of imports from: China: Quantity.................................................. *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▼*** ▲*** ▼*** ▲*** Ending inventory quantity....................... *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Nonsubject sources: Quantity.................................................. *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Ending inventory quantity....................... *** *** *** *** *** ▲*** ▲*** ▲*** ▼*** All import sources: Quantity.................................................. *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▼*** Ending inventory quantity....................... *** *** *** *** *** ▲*** ▲*** ▲*** ▼*** U.S. producers': Average capacity quantity......................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Production quantity.................................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Capacity utilization (fn1)............................ *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** U.S. shipments: Quantity.................................................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▲*** Export shipments: Quantity.................................................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▲*** ▼*** ▲*** ▼*** Ending inventory quantity.......................... *** *** *** *** *** ▲*** ▲*** ▲*** ▼*** Inventories/total shipments (fn1)............... *** *** *** *** *** ▲*** ▲*** ▲*** ▼*** Production workers.................................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Hours worked (1,000s).............................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Wages paid ($1,000)................................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Hourly wages (dollars per hour)................ *** *** *** *** *** ▲*** ▼*** ▲*** ▼*** Productivity (pounds per hour).................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit labor costs ........................................ *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Table continued. C-3 Quantity=1,000 pounds; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per 1,000 pounds; Period changes=percent--exceptions noted Reported data Period changes Calendar year Jan-Jun Comparison years Table C-1 continued FRC: Summary data concerning the U.S. market, 2018-20, January to June 2020, and January to June 2021 Jan-Jun 2018 2019 2020 2020 2021 2018-20 2018-19 2019-20 2020-21 Net sales: Quantity.................................................. *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Value...................................................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit value............................................... *** *** *** *** *** ▲*** ▲*** ▼*** ▲*** Cost of goods sold (COGS)...................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Gross profit or (loss) (fn2)......................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** SG&A expenses........................................ *** *** *** *** *** ▼*** ▼*** ▼*** ▲*** Operating income or (loss) (fn2)................ *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Net income or (loss) (fn2).......................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit COGS................................................ *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Unit SG&A expenses................................. *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Unit operating income or (loss) (fn2)......... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Unit net income or (loss) (fn2)................... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** COGS/sales (fn1)...................................... *** *** *** *** *** ▲*** ▲*** ▲*** ▲*** Operating income or (loss)/sales (fn1)...... *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Net income or (loss)/sales (fn1)................ *** *** *** *** *** ▼*** ▼*** ▼*** ▼*** Capital expenditures.................................. *** *** *** *** *** ▼*** ▲*** ▼*** ▼*** Research and development expenses...... *** *** *** *** *** ▼*** ▼*** ▲*** ▼*** Net assets................................................. *** *** *** *** *** ▼*** ▼*** ▼*** *** fn1.--Reported data are in percent and period changes are in percentage points. Source: Compiled from data submitted in response to Commission questionnaires. Note.--Shares and ratios shown as “0.0” percent represent non-zero values less than “0.05” percent (if positive) and greater than “(0.05)” percent (if negative). Zeroes, null values, and undefined calculations are suppressed and shown as “---“. Period changes preceded by a “▲” represent an increase, while period changes preceded by a “▼” represent a decrease. fn2.--Percent changes only calculated when both comparison values represent profits; The directional change in profitability provided when one or both comparison values represent a loss. C-4 Quantity=1,000 pounds; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per 1,000 pounds; Period changes=percent--exceptions noted Reported data Period changes Calendar year Jan-Jun Comparison years D-1 APPENDIX D FREIGHT RAILCAR DELIVERIES IN NORTH AMERICA D-2 Table D-1: Freight railcars: Deliveries in North America, by year ...................................................... D-3 D-3 Table D-1 Freight railcars: Deliveries in North America, by year Quantity in number of railcars delivered Year Quantity 1994 53,269 1995 60,618 1996 54,031 1997 49,902 1998 74,832 1999 74,223 2000 55,791 2001 34,258 2002 17,714 2003 32,180 2004 46,841 2005 68,612 2006 69,733 2007 63,149 2008 59,954 2009 21,150 2010 16,579 2011 46,125 2012 58,891 2013 53,043 2014 67,228 2015 82,296 2016 62,433 2017 44,963 2018 50,803 2019 58,026 2020 31,282 Source: ARCI (American Railway Car Institute), an RSI (Railway Supply Institute) committee, freight railcar deliveries, 1994-2020. https://www.railwayage.com/mechanical/freight-cars/do-we-need-another- north-american-railcar-builder/#. E‐1 APPENDIX E U.S. SHIPMENTS BY PRODUCT TYPE Table E‐1: FRC: U.S. producers' U.S. shipments ......................................................................... E‐3 Table E‐2: FRC: U.S. importers' U.S. shipments from China....................................................... E‐5 Table E‐3: FRC: U.S. importers' U.S. shipments from nonsubject sources ................................. E‐7 Table F‐4: FRC: U.S. importers' U.S. shipments from all import sources ................................... E‐9 E‐4 Table E-1 FRC: U.S. producers' U.S. shipments, by type and period Quantity 1 in 1,000 pounds; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 1 *** *** *** *** *** Components: Knuckles Quantity 1 *** *** *** *** *** Components: Other Quantity 1 *** *** *** *** *** Components: All types Quantity 1 *** *** *** *** *** All scope merchandise Quantity 1 *** *** *** *** *** Complete FRC Share of quantity 1 *** *** *** *** *** Components: Knuckles Share of quantity 1 *** *** *** *** *** Components: Other Share of quantity 1 *** *** *** *** *** Components: All types Share of quantity 1 *** *** *** *** *** All scope merchandise Share of quantity 1 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-1 Continued FRC: U.S. producers' U.S. shipments, by type and period Quantity 2 in units; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 2 *** *** *** *** *** Components: Knuckles Quantity 2 *** *** *** *** *** Components: Other Quantity 2 *** *** *** *** *** Components: All types Quantity 2 *** *** *** *** *** All scope merchandise Quantity 2 *** *** *** *** *** Complete FRC Share of quantity 2 *** *** *** *** *** Components: Knuckles Share of quantity 2 *** *** *** *** *** Components: Other Share of quantity 2 *** *** *** *** *** Components: All types Share of quantity 2 *** *** *** *** *** All scope merchandise Share of quantity 2 100.0 100.0 100.0 100.0 100.0 Table continued on next page. E‐5 Table E-1 Continued FRC: U.S. producers' U.S. shipments, by type and period Value in 1,000 dollars; share in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Value *** *** *** *** *** Components: Knuckles Value *** *** *** *** *** Components: Other Value *** *** *** *** *** Components: All types Value *** *** *** *** *** All scope merchandise Value *** *** *** *** *** Complete FRC Share of value *** *** *** *** *** Components: Knuckles Share of value *** *** *** *** *** Components: Other Share of value *** *** *** *** *** Components: All types Share of value *** *** *** *** *** All scope merchandise Share of value 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-1 Continued FRC: U.S. producers' U.S. shipments, by type and period Unit value 1 in dollars per 1,000 pounds; unit value 2 in dollars per unit; ratio in pounds per unit Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Unit value 1 *** *** *** *** *** Components: Knuckles Unit value 1 *** *** *** *** *** Components: Other Unit value 1 *** *** *** *** *** Components: All types Unit value 1 *** *** *** *** *** All scope merchandise Unit value 1 *** *** *** *** *** Complete FRC Unit value 2 *** *** *** *** *** Components: Knuckles Unit value 2 *** *** *** *** *** Components: Other Unit value 2 *** *** *** *** *** Components: All types Unit value 2 *** *** *** *** *** All scope merchandise Unit value 2 *** *** *** *** *** Complete FRC Ratio *** *** *** *** *** Components: Knuckles Ratio *** *** *** *** *** Components: Other Ratio *** *** *** *** *** Components: All types Ratio *** *** *** *** *** All scope merchandise Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. E‐6 Table E-2 FRC: U.S. importers' U.S. shipments of imports from China, by type and period Quantity 1 in 1,000 pounds; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 1 *** *** *** *** *** Components: Knuckles Quantity 1 *** *** *** *** *** Components: Other Quantity 1 *** *** *** *** *** Components: All types Quantity 1 *** *** *** *** *** All scope merchandise Quantity 1 *** *** *** *** *** Complete FRC Share of quantity 1 *** *** *** *** *** Components: Knuckles Share of quantity 1 *** *** *** *** *** Components: Other Share of quantity 1 *** *** *** *** *** Components: All types Share of quantity 1 *** *** *** *** *** All scope merchandise Share of quantity 1 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-2 Continued FRC: U.S. importers' U.S. shipments of imports from China, by type and period Quantity 2 in units; share in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 2 *** *** *** *** *** Components: Knuckles Quantity 2 *** *** *** *** *** Components: Other Quantity 2 *** *** *** *** *** Components: All types Quantity 2 *** *** *** *** *** All scope merchandise Quantity 2 *** *** *** *** *** Complete FRC Share of quantity 2 *** *** *** *** *** Components: Knuckles Share of quantity 2 *** *** *** *** *** Components: Other Share of quantity 2 *** *** *** *** *** Components: All types Share of quantity 2 *** *** *** *** *** All scope merchandise Share of quantity 2 100.0 100.0 100.0 100.0 100.0 Table continued on next page. E‐7 Table E-2 Continued FRC: U.S. importers' U.S. shipments of imports from China, by type and period Value in 1,000 dollars; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Value *** *** *** *** *** Components: Knuckles Value *** *** *** *** *** Components: Other Value *** *** *** *** *** Components: All types Value *** *** *** *** *** All scope merchandise Value *** *** *** *** *** Complete FRC Share of value *** *** *** *** *** Components: Knuckles Share of value *** *** *** *** *** Components: Other Share of value *** *** *** *** *** Components: All types Share of value *** *** *** *** *** All scope merchandise Share of value 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-2 Continued FRC: U.S. importers' U.S. shipments of imports from China, by type and period Unit value 1 in dollars per 1,000 pounds; unit value 2 in dollars per unit, ratios in pounds per unit Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Unit value 1 *** *** *** *** *** Components: Knuckles Unit value 1 *** *** *** *** *** Components: Other Unit value 1 *** *** *** *** *** Components: All types Unit value 1 *** *** *** *** *** All scope merchandise Unit value 1 *** *** *** *** *** Complete FRC Unit value 2 *** *** *** *** *** Components: Knuckles Unit value 2 *** *** *** *** *** Components: Other Unit value 2 *** *** *** *** *** Components: All types Unit value 2 *** *** *** *** *** All scope merchandise Unit value 2 *** *** *** *** *** Complete FRC Ratio *** *** *** *** *** Components: Knuckles Ratio *** *** *** *** *** Components: Other Ratio *** *** *** *** *** Components: All types Ratio *** *** *** *** *** All scope merchandise Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. E‐8 Table E-3 FRC: U.S. importers' U.S. shipments of imports from nonsubject sources, by type and period Quantity 1 in 1,000 pounds; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 1 *** *** *** *** *** Components: Knuckles Quantity 1 *** *** *** *** *** Components: Other Quantity 1 *** *** *** *** *** Components: All types Quantity 1 *** *** *** *** *** All scope merchandise Quantity 1 *** *** *** *** *** Complete FRC Share of quantity 1 *** *** *** *** *** Components: Knuckles Share of quantity 1 *** *** *** *** *** Components: Other Share of quantity 1 *** *** *** *** *** Components: All types Share of quantity 1 *** *** *** *** *** All scope merchandise Share of quantity 1 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-3 Continued FRC: U.S. importers' U.S. shipments of imports from nonsubject sources, by type and period Quantity 2 in units; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 2 *** *** *** *** *** Components: Knuckles Quantity 2 *** *** *** *** *** Components: Other Quantity 2 *** *** *** *** *** Components: All types Quantity 2 *** *** *** *** *** All scope merchandise Quantity 2 *** *** *** *** *** Complete FRC Share of quantity 2 *** *** *** *** *** Components: Knuckles Share of quantity 2 *** *** *** *** *** Components: Other Share of quantity 2 *** *** *** *** *** Components: All types Share of quantity 2 *** *** *** *** *** All scope merchandise Share of quantity 2 100.0 100.0 100.0 100.0 100.0 Table continued on next page. E‐9 Table E-3 Continued FRC: U.S. importers' U.S. shipments of imports from nonsubject sources, by type and period Value in 1,000 dollars; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Value *** *** *** *** *** Components: Knuckles Value *** *** *** *** *** Components: Other Value *** *** *** *** *** Components: All types Value *** *** *** *** *** All scope merchandise Value *** *** *** *** *** Complete FRC Share of value *** *** *** *** *** Components: Knuckles Share of value *** *** *** *** *** Components: Other Share of value *** *** *** *** *** Components: All types Share of value *** *** *** *** *** All scope merchandise Share of value 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-3 Continued FRC: U.S. importers' U.S. shipments of imports from nonsubject sources, by type and period Unit value 1 in dollars per 1,000 pounds; unit value 2 in dollars per unit; ratios in pounds per unit Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Unit value 1 *** *** *** *** *** Components: Knuckles Unit value 1 *** *** *** *** *** Components: Other Unit value 1 *** *** *** *** *** Components: All types Unit value 1 *** *** *** *** *** All scope merchandise Unit value 1 *** *** *** *** *** Complete FRC Unit value 2 *** *** *** *** *** Components: Knuckles Unit value 2 *** *** *** *** *** Components: Other Unit value 2 *** *** *** *** *** Components: All types Unit value 2 *** *** *** *** *** All scope merchandise Unit value 2 *** *** *** *** *** Complete FRC Ratio *** *** *** *** *** Components: Knuckles Ratio *** *** *** *** *** Components: Other Ratio *** *** *** *** *** Components: All types Ratio *** *** *** *** *** All scope merchandise Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. E‐10 Table E-4 FRC: U.S. importers' U.S. shipments of imports from all import sources, by type and period Quantity 1 in 1,000 pounds; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 1 *** *** *** *** *** Components: Knuckles Quantity 1 *** *** *** *** *** Components: Other Quantity 1 *** *** *** *** *** Components: All types Quantity 1 *** *** *** *** *** All scope merchandise Quantity 1 *** *** *** *** *** Complete FRC Share of quantity 1 *** *** *** *** *** Components: Knuckles Share of quantity 1 *** *** *** *** *** Components: Other Share of quantity 1 *** *** *** *** *** Components: All types Share of quantity 1 *** *** *** *** *** All scope merchandise Share of quantity 1 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-4 Continued FRC: U.S. importers' U.S. shipments of imports from all import sources, by type and period Quantity 2 in units; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Quantity 2 *** *** *** *** *** Components: Knuckles Quantity 2 *** *** *** *** *** Components: Other Quantity 2 *** *** *** *** *** Components: All types Quantity 2 *** *** *** *** *** All scope merchandise Quantity 2 *** *** *** *** *** Complete FRC Share of quantity 2 *** *** *** *** *** Components: Knuckles Share of quantity 2 *** *** *** *** *** Components: Other Share of quantity 2 *** *** *** *** *** Components: All types Share of quantity 2 *** *** *** *** *** All scope merchandise Share of quantity 2 100.0 100.0 100.0 100.0 100.0 Table continued on next page. E‐11 Table E-4 Continued FRC: U.S. importers' U.S. shipments of imports from all import sources, by type and period Value in 1,000 dollars; shares in percent Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Value *** *** *** *** *** Components: Knuckles Value *** *** *** *** *** Components: Other Value *** *** *** *** *** Components: All types Value *** *** *** *** *** All scope merchandise Value *** *** *** *** *** Complete FRC Share of value *** *** *** *** *** Components: Knuckles Share of value *** *** *** *** *** Components: Other Share of value *** *** *** *** *** Components: All types Share of value *** *** *** *** *** All scope merchandise Share of value 100.0 100.0 100.0 100.0 100.0 Table continued. Table E-4 Continued FRC: U.S. importers' U.S. shipments of imports from all import sources, by type and period Unit value 1 in dollars per 1,000 pounds; unit value 2 in dollars per unit; ratios in pounds per unit Item Measure 2018 2019 2020 Jan-Jun 2020 Jan-Jun 2021 Complete FRC Unit value 1 *** *** *** *** *** Components: Knuckles Unit value 1 *** *** *** *** *** Components: Other Unit value 1 *** *** *** *** *** Components: All types Unit value 1 *** *** *** *** *** All scope merchandise Unit value 1 *** *** *** *** *** Complete FRC Unit value 2 *** *** *** *** *** Components: Knuckles Unit value 2 *** *** *** *** *** Components: Other Unit value 2 *** *** *** *** *** Components: All types Unit value 2 *** *** *** *** *** All scope merchandise Unit value 2 *** *** *** *** *** Complete FRC Ratio *** *** *** *** *** Components: Knuckles Ratio *** *** *** *** *** Components: Other Ratio *** *** *** *** *** Components: All types Ratio *** *** *** *** *** All scope merchandise Ratio *** *** *** *** *** Source: Compiled from data submitted in response to Commission questionnaires. Note: Shares and ratios shown as "0.0" represent values greater than zero, but less than "0.05" percent. Zeroes, null values, and undefined calculations are suppressed and shown as “---“. F-1 APPENDIX F STEEL SCRAP PRICES BY SOURCE F-2 Table F-1: Steel scrap: Prices, by month and by source of scrap ................................................ F-3 F-3 Table F-1 Steel scrap: Prices, by month and by source of scrap Prices in dollars per gross ton Year Month No1 busheling No1 heavy melt shredded auto scrap 2018 January *** *** *** 2018 February *** *** *** 2018 March *** *** *** 2018 April *** *** *** 2018 May *** *** *** 2018 June *** *** *** 2018 July *** *** *** 2018 August *** *** *** 2018 September *** *** *** 2018 October *** *** *** 2018 November *** *** *** 2018 December *** *** *** 2019 January *** *** *** 2019 February *** *** *** 2019 March *** *** *** 2019 April *** *** *** 2019 May *** *** *** 2019 June *** *** *** 2019 July *** *** *** 2019 August *** *** *** 2019 September *** *** *** 2019 October *** *** *** 2019 November *** *** *** 2019 December *** *** *** Table continued on next page. F-4 Table F-1 Continued Steel scrap: Prices, by month and by source of scrap Prices in dollars per gross ton Year Month No1 busheling No1 heavy melt Shredded auto scrap 2020 January *** *** *** 2020 February *** *** *** 2020 March *** *** *** 2020 April *** *** *** 2020 May *** *** *** 2020 June *** *** *** 2020 July *** *** *** 2020 August *** *** *** 2020 September *** *** *** 2020 October *** *** *** 2020 November *** *** *** 2020 December *** *** *** 2021 January *** *** *** 2021 February *** *** *** 2021 March *** *** *** 2021 April *** *** *** 2021 May *** *** *** 2021 June *** *** *** 2021 July *** *** *** 2021 August *** *** *** 2021 September *** *** *** Source: American Metal Market LLC. Accessed October 13, 2021.
Investigation 701-TA-3569 is a U.S. International Trade Commission antidumping (AD) proceeding on Freight Rail Coupler Systems and Components from China; Inv. No. 701-TA-670 and 731-TA-1570 (Preliminary) from China. The ITC determines whether U.S. industry is materially injured (or threatened) by imports under investigation; Commerce determines whether dumping or subsidization is occurring. Both findings are required for an AD/CVD order to be issued.
701-TA-3569 is in the preliminary phase, with status completed. Preliminary phase — the ITC's initial 45-day determination on whether there's a reasonable indication of injury. A negative preliminary terminates the investigation; an affirmative one moves it forward.
Not yet. 701-TA-3569 has not produced an AD/CVD order in Tandom's catalog. If both Commerce and the ITC issue affirmative final determinations, an order would issue and link to this investigation. Until then, no cash deposits apply.
Tandom guides relevant to AD/CVD investigations
Cash deposit cascade, separate rates, all-others, and PRC-wide rates. Worked example on case A-570-910 (galvanized welded steel pipe from China) with three exporter-specific rates.
Open resource
Scope text is authoritative; the HTS list is illustrative. Read scope, find past rulings, and file a 19 CFR 351.225 inquiry. Worked example on case A-570-106 (wooden cabinets from China).
Open resource
The USITC publishes investigation determinations and milestones on its Investigations Data Service (IDS) at ids.usitc.gov. Tandom's catalog re-syncs from IDS daily; new phases, votes, and determinations appear here within 24 hours of USITC publication.
A practical workflow for checking antidumping and countervailing duty exposure on a US entry. For brokers and ops teams who need the answer before filing.
Open resource