Guizhou Tyre Co. v. United States, 389 F. Supp. 3d 1350

Background

Commerce completed the 7th administrative review (POR: Sept. 1, 2014–Aug. 31, 2015) of the antidumping order on off-the-road (OTR) tires from the PRC, issuing Final and Amended Final Results assigning individual and PRC‑wide rates.
Xuzhou Xugong (Xugong) and Guizhou Tyre Co./Guizhou Tyre Import & Export (GTC) were mandatory respondents; Commerce assigned Xugong a 33.14% separate‑rate margin and GTC the PRC‑wide rate (105.31%).
Commerce denied separate‑rate status to Aeolus and GTC based on findings of de facto government control; several other firms received the Xugong‑rate as “separate rate” respondents.
Commerce reduced Xugong’s EP/CEP starting prices for an 8% ‘‘irrecoverable’’ Chinese VAT on inputs, increasing Xugong’s dumping margin.
Plaintiffs (including Xugong, GTC, Aeolus, and four other separate‑rate respondents) challenged Commerce’s separate‑rate findings and the VAT deduction; the cases were consolidated in the Court of International Trade.
The court remanded: (1) Commerce must reconsider whether Aeolus and GTC rebutted de facto government control; (2) Commerce must recalculate Xugong’s EP/CEP without deducting Chinese VAT; and (3) rates for other separate‑rate plaintiffs must be adjusted accordingly.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Aeolus rebutted Commerce’s presumption of PRC government de facto control	Aeolus: record (Rectification Report) shows past control issues were rectified and SOE shareholders lack practical control	U.S./Commerce: Aeolus’ SOE ownership and record indicia show continued government control	Remanded — Commerce failed to address the Rectification Report; must reconsider Aeolus’ separate‑rate claim in light of all record evidence
Whether GTC rebutted presumption of PRC government control	GTC: challenges Commerce’s factual findings about board elections and shareholder meeting access	U.S.: seeks voluntary remand so Commerce can reexamine key factual findings (not conceding error)	Remanded — court grants voluntary remand and directs Commerce to reconsider GTC’s separate‑rate status in full
Whether Commerce permissibly deducted irrecoverable PRC VAT from EP/CEP under 19 U.S.C. § 1677a(c)(2)(B) (export‑tax adjustment)	Xugong: VAT is a domestic/home‑market tax, not an ‘‘export tax’’; statute doesn’t authorize deducting input VAT from EP/CEP	U.S.: defends Commerce’s methodological change treating irrecoverable input VAT as an export‑related charge warranting deduction	Held for Xugong — Court rejects Commerce’s construction; export‑tax adjustment applies only to taxes on exportation, not domestic VAT on inputs; Commerce must remove VAT deductions and recalculate margins
Whether other separate‑rate plaintiffs qualify for rate adjustments following any change to Xugong or GTC rates	Plaintiffs: if Xugong/GTC rates change, all other separate‑rate plaintiffs should receive adjusted "all‑others" rate	U.S.: does not oppose adjusting rates if underlying individual rate is revised	Held for plaintiffs — Commerce must recalculate and apply revised rates to other separate‑rate plaintiffs as appropriate

Key Cases Cited

SKF USA, Inc. v. United States, 537 F.3d 1373 (Fed. Cir.) (standard for substantial evidence review)
AMS Assocs. v. United States, 719 F.3d 1376 (Fed. Cir.) (separate‑rate de jure/de facto control framework)
Federal‑Mogul Corp. v. United States, 63 F.3d 1572 (Fed. Cir.) (treatment of home‑market VAT under pre‑URAA law)
SKF USA, Inc. v. United States, 254 F.3d 1022 (Fed. Cir.) (remand considerations for substantial and legitimate agency concerns)
CS Wind Vietnam Co. v. United States, 832 F.3d 1367 (Fed. Cir.) (agency must account for evidence that detracts from its finding)
Qingdao Qihang Tyre Co. v. United States, 308 F. Supp. 3d 1329 (CIT) (held Commerce’s application of export‑tax adjustment to input VAT was unreasonable)