Certain Steel Racks and Parts Thereof From the People's Republic of China: Amended Final Affirmative Antidumping Duty Determination and Antidumping Duty Order; and Countervailing Duty Order

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

Based on affirmative final determinations by the Department of Commerce (Commerce) and the International Trade Commission (ITC), Commerce is issuing the antidumping duty (AD) and countervailing duty (CVD) orders on certain steel racks and parts thereof (steel racks) from the People's Republic of China (China). In addition, Commerce is amending its final determination of sales at less than fair value (LTFV) to correct ministerial errors.

DATES:

Applicable September 16, 2019.

FOR FURTHER INFORMATION CONTACT:

Maliha Khan (AD) or Robert Galantucci (CVD), AD/CVD Operations, Office IV, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-0895 and (202) 482-2923, respectively.

SUPPLEMENTARY INFORMATION:

Background

In accordance with sections 735(d) and 705(d) of the Tariff Act of 1930, as amended (the Act), on July 24, 2019, Commerce published its affirmative final determination of sales at LTFV and its affirmative final determination that countervailable subsidies are being provided to producers and exporters of steel racks from China.

On September 9, 2019, the ITC notified Commerce of its final affirmative determination that an industry in the United States is materially injured by reason of LTFV imports and subsidized imports of steel racks from China, within the meaning of sections 735(b)(1)(A)(i) and 705(b)(1)(A)(i) of the Act.

Scope of the Orders

The products covered by these orders are steel racks from China. For a complete description of the scope of the orders, see the Appendix to this notice.

Amendment to the Final Determination of Sales at LTFV

Pursuant to sections 735(e) of the Act and 19 CFR 351.224(e) and (f), Commerce is amending the AD Final Determination to correct two ministerial errors. A ministerial error is defined as an error in addition, subtraction, or other arithmetic function, clerical error resulting from inaccurate copying, duplication, or the like, and any other similar type of unintentional error which the Secretary considers ministerial.

In the AD Final Determination, we made ministerial errors by including a surrogate value for brokerage and handling (B&H) expenses in our surrogate value spreadsheet and by stating that we added surrogate B&H expenses to movement expenses for material inputs when we did not do so. The record demonstrates that we intentionally did not add surrogate B&H expenses to movement expenses for material inputs. Therefore, we are amending the AD Final Determination to correct our misstatement regarding the addition of surrogate B&H expenses and to clarify our intention with respect to the inclusion of those expenses in the surrogate values for material inputs. First, we did not add surrogate B&H expenses to movement expenses for material inputs in the AD Final Determination. Our statement that we did add these expenses is incorrect. Second, our statements in the AD Final Determination mischaracterize our intention with respect to B&H expenses related to the movement of material inputs. Our statements indicate that we intended to add surrogate B&H expenses to movement expenses for material inputs when we did not. For further details, see the Ministerial Error Memorandum.

AD Order

On September 9, 2019, in accordance with section 735(d) of the Act, the ITC notified Commerce of its final determination that an industry in the United States is materially injured within the meaning of section 735(b)(1)(A)(i) of the Act by reason of imports of steel racks from China that are sold in the United States at LTFV. Therefore, in accordance with section 735(c)(2) of the Act, we are issuing this AD order. Because the ITC determined that imports of steel racks from China are materially injuring a U.S. industry, unliquidated entries of such merchandise from China entered, or withdrawn from warehouse, for consumption are subject to the assessment of antidumping duties.

As a result of the ITC's final determination, in accordance with section 736(a)(1) of the Act, Commerce will direct U.S. Customs and Border Protection (CBP) to assess, upon further instruction by Commerce, antidumping duties equal to the amount by which the normal value of the merchandise exceeds the export price or constructed export price of the subject merchandise, for all relevant entries of steel racks from China. Antidumping duties will be assessed on unliquidated entries of steel racks from China entered, or withdrawn from warehouse, for consumption on or after March 4, 2019, the date of publication of the AD Preliminary Determination, but antidumping duties will not be assessed on entries of subject merchandise after the expiration of the provisional measures period and before publication in the Federal Register of the ITC's final injury determination, as further described below.

Continuation of Suspension of Liquidation—AD

Except as noted in the “Provisional Measures—AD” section of this notice below, in accordance with section 735(c)(1)(B) of the Act, Commerce will instruct CBP to continue to suspend liquidation on all relevant entries of steel racks from China. These instructions suspending liquidation will remain in effect until further notice.

Commerce will also instruct CBP to require cash deposits equal to the estimated weighted-average dumping margins indicated in the table below. Given that the provisional measures period has expired, as explained below, effective on the date of publication in the Federal Register of the notice of the ITC's final affirmative injury determination, CBP will require, at the same time as importers would normally deposit estimated duties on subject merchandise, a cash deposit equal to the estimated weighted-average dumping margins listed in the table below. The China-wide entity rate applies to all exporter-producer combinations not specifically listed.

Provisional Measures—AD

Section 733(d) of the Act states that suspension of liquidation pursuant to an affirmative preliminary determination may not remain in effect for more than four months, except where exporters representing a significant proportion of exports of the subject merchandise request that Commerce extend the four-month period to no more than six months. At the request of exporters that account for a significant proportion of steel racks from China, Commerce extended the four-month period to six months in this proceeding. Commerce published the preliminary determination on March 4, 2019. Hence, the extended provisional measures period, beginning on the date of publication of the preliminary determination, ended on August 30, 2019.

Therefore, in accordance with section 733(d) of the Act and our practice, Commerce will instruct CBP to terminate the suspension of liquidation and to liquidate, without regard to antidumping duties, unliquidated entries of steel racks from China, entered, or withdrawn from warehouse, for consumption after August 30, 2019, the final day on which the provisional measures were in effect, until and through the day preceding the date of publication of the ITC's final affirmative injury determination in the Federal Register.Suspension of liquidation and the collection of cash deposits will resume on the date of publication of the ITC's final determination in the Federal Register.

Estimated Weighted-Average Dumping Margins

The estimated weighted-average dumping margin percentages are as follows:

CVD Order

On September 9, 2019, in accordance with sections 705(b)(1)(A)(i) and 705(d) of the Act, the ITC notified Commerce of its final determination that an industry in the United States is materially injured by reason of subsidized imports of steel racks from China. Therefore, in accordance with sections 705(c)(2) and 706 of the Act, we are issuing this CVD order.

As a result of the ITC's final affirmative determination, in accordance with section 706(a) of the Act, Commerce will direct CBP to assess, upon further instruction by Commerce, countervailing duties on unliquidated entries of steel racks from China entered, or withdrawn from warehouse, for consumption on or after December 3, 2018, the date of publication of the CVD Preliminary Determination, but will not include entries occurring after the expiration of the provisional measures period and before publication in the Federal Register of the ITC's final injury determination, as further described below.

Suspension of Liquidation—CVD

In accordance with section 706 of the Act, we will instruct CBP to reinstitute suspension of liquidation on all relevant entries of subject merchandise (i.e., steel racks from China), effective on the date of publication of the ITC's notice of final affirmative injury determination in the Federal Register, and to assess, upon further instruction by Commerce, pursuant to section 706(a)(1) of the Act, countervailing duties for each entry of the subject merchandise in an amount based on the net countervailable subsidy rate for the subject merchandise. We will also instruct CBP to require, at the same time as importers would normally deposit estimated duties on this merchandise, cash deposits for each entry of subject merchandise equal to the rates noted below.

These instructions suspending liquidation will remain in effect until further notice. The all-others rate applies to all producers or exporters not specifically listed. The estimated subsidy rates for the countervailing duty order are as follows:

Provisional Measures—CVD

Section 703(d) of the Act states that suspension of liquidation instructions issued pursuant to an affirmative preliminary determination may not remain in effect for more than four months. Commerce published its CVD Preliminary Determination on December 3, 2018. Therefore, the four-month period beginning on the date of the publication of the Preliminary Determination continued through April 1, 2019.

Therefore, in accordance with section 703(d) of the Act, Commerce instructed CBP to terminate the suspension of liquidation and to liquidate, without regard to countervailing duties, unliquidated entries of steel racks from China entered, or withdrawn from warehouse, for consumption on or after April 2, 2019, the date on which provisional measures expired, through the day preceding the date of publication of the ITC's final affirmative injury determinations in the Federal Register. Suspension of liquidation will resume on the date of publication of the ITC's final affirmative injury determinations in the Federal Register.

Notifications to Interested Parties

This notice constitutes the AD and CVD orders with respect to steel racks from China pursuant to sections 736(a) and 706(a) of the Act. Interested parties can find a list of orders currently in effect at http://enforcement.trade.gov/stats/iastats1.html.

These orders are published in accordance with sections 706(a) and 736(a) of the Act and 19 CFR 351.211(b).

Appendix

Scope of the Orders

The merchandise covered by these orders is steel racks and parts thereof, assembled, to any extent, or unassembled, including but not limited to, vertical components (e.g., uprights, posts, or columns), horizontal or diagonal components (e.g., arms or beams), braces, frames, locking devices (e.g., end plates and beam connectors), and accessories (including, but not limited to, rails, skid channels, skid rails, drum/coil beds, fork clearance bars, pallet supports, row spacers, and wall ties).

Subject steel racks and parts thereof are made of steel, including, but not limited to, cold and/or hot-formed steel, regardless of the type of steel used to produce the components and may, or may not, include locking tabs, slots, or bolted, clamped, or welded connections. Subject steel racks have the following physical characteristics:

(1) Each steel vertical and horizontal load bearing member (e.g., arms, beams, posts, and columns) is composed of steel that is at least 0.044 inches thick;

(2) Each steel vertical and horizontal load bearing member (e.g., arms, beams, posts, and columns) is composed of steel that has a yield strength equal to or greater than 36,000 pounds per square inch;

(3) The width of each steel vertical load bearing member (e.g., posts and columns) exceeds two inches; and

(4) The overall depth of each steel roll-formed horizontal load bearing member (e.g., beams) exceeds two inches.

In the case of steel horizontal load bearing members other than roll-formed (e.g., structural beams, Z-beams, or cantilever arms), only the criteria in subparagraphs (1) and (2) apply to these horizontal load bearing members. The depth limitation in subparagraph (4) does not apply to steel horizontal load bearing members that are not roll-formed.

Steel rack components can be assembled into structures of various dimensions and configurations by welding, bolting, clipping, or with the use of devices such as clips, end plates, and beam connectors, including, but not limited to the following configurations: (1) Racks with upright frames perpendicular to the aisles that are independently adjustable, with positive-locking beams parallel to the aisle spanning the upright frames with braces; and (2) cantilever racks with vertical components parallel to the aisle and cantilever beams or arms connected to the vertical components perpendicular to the aisle. Steel racks may be referred to as pallet racks, storage racks, stacker racks, retail racks, pick modules, selective racks, or cantilever racks and may incorporate moving components and be referred to as pallet-flow racks, carton-flow racks, push-back racks, movable-shelf racks, drive-in racks, and drive-through racks. While steel racks may be made to ANSI MH16.l or ANSI MH16.3 standards, all steel racks and parts thereof meeting the description set out herein are covered by the scope of these orders, whether or not produced according to a particular standard.

The scope includes all steel racks and parts thereof meeting the description above, regardless of

(1) other dimensions, weight, or load rating;

(2) vertical components or frame type (including structural, roll-form, or other);

(3) horizontal support or beam/brace type (including but not limited to structural, roll-form, slotted, unslotted, Z-beam, C-beam, L-beam, step beam, and cantilever beam);

(4) number of supports;

(5) number of levels;

(6) surface coating, if any (including but not limited to paint, epoxy, powder coating, zinc, or other metallic coatings);

(7) rack shape (including but not limited to rectangular, square, corner, and cantilever);

(8) the method by which the vertical and horizontal supports connect (including but not limited to locking tabs or slots, bolting, clamping, and welding); and

(9) whether or not the steel rack has moving components (including but not limited to rails, wheels, rollers, tracks, channels, carts, and conveyors).

Subject merchandise includes merchandise matching the above description that has been finished or packaged in a third country. Finishing includes, but is not limited to, coating, painting, or assembly, including attaching the merchandise to another product, or any other finishing or assembly operation that would not remove the merchandise from the scope of these orders if performed in the country of manufacture of the steel racks and parts thereof. Packaging includes packaging the merchandise with or without another product or any other packaging operation that would not remove the merchandise from the scope of these orders if performed in the country of manufacture of the steel racks and parts thereof.

Steel racks and parts thereof are included in the scope of these orders whether or not imported attached to, or included with, other parts or accessories such as wire decking, nuts, and bolts. If steel racks and parts thereof are imported attached to, or included with, such non-subject merchandise, only the steel racks and parts thereof are included in the scope.

The scope of these orders does not cover: (1) Decks, i.e., shelving that sits on or fits into the horizontal supports to provide the horizontal storage surface of the steel racks; (2) wire shelving units, i.e., units made from wire that incorporate both a wire deck and wire horizontal supports (taking the place of the horizontal beams and braces) into a single piece with tubular collars that slide over the posts and onto plastic sleeves snapped on the posts to create a finished unit; (3) pins, nuts, bolts, washers, and clips used as connecting devices; and (4) non-steel components.

Specifically excluded from the scope of these orders are any products covered by Commerce's existing antidumping and countervailing duty orders on boltless steel shelving units prepackaged for sale from the People's Republic of China. See Boltless Steel Shelving Units Prepackaged for Sale from the People's Republic of China: Antidumping Duty Order, 80 FR 63,741 (October 21, 2017); and Boltless Steel Shelving Units Prepackaged for Sale from the People's Republic of China: Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order, 80 FR 63,745 (October 21, 2017).

Also excluded from the scope of these orders are bulk-packed parts or components of boltless steel shelving units that were specifically excluded from the scope of the Boltless Steel Shelving Orders because such bulk-packed parts or components do not contain the steel vertical supports (i.e., uprights and posts) and steel horizontal supports (i.e., beams, braces) packaged together for assembly into a completed boltless steel shelving unit.

Such excluded components of boltless steel shelving are defined as:

(1) Boltless horizontal supports (beams, braces) that have each of the following characteristics: (a) A length of 95 inches or less, (b) made from steel that has a thickness of 0.068 inches or less, and (c) a weight capacity that does not exceed 2,500 lbs per pair of beams for beams that are 78″ or shorter, a weight capacity that does not exceed 2,200 lbs per pair of beams for beams that are over 78″ long but not longer than 90″, and/or a weight capacity that does not exceed 1,800 lbs per pair of beams for beams that are longer than 90″;

(2) shelf supports that mate with the aforementioned horizontal supports; and

(3) boltless vertical supports (upright welded frames and posts) that have each of the following characteristics: (a) A length of 95 inches or less, (b) with no face that exceeds 2.90 inches wide, and (c) made from steel that has a thickness of 0.065 inches or less.

Excluded from the scope of these orders are: (1) Wall-mounted shelving and racks, defined as shelving and racks that suspend all of the load from the wall, and do not stand on, or transfer load to, the floor; (2) ceiling-mounted shelving and racks, defined as shelving and racks that suspend all of the load from the ceiling and do not stand on, or transfer load to, the floor; and (3) wall/ceiling mounted shelving and racks, defined as shelving and racks that suspend the load from the ceiling and the wall and do not stand on, or transfer load to, the floor. The addition of a wall or ceiling bracket or other device to attach otherwise subject merchandise to a wall or ceiling does not meet the terms of this exclusion.

Also excluded from the scope of these orders is scaffolding that complies with ANSI/ASSE A10.8—2011—Scaffolding Safety Requirements, CAN/CSA S269.2-M87 (Reaffirmed 2003)—Access Scaffolding for Construction Purposes, and/or Occupational Safety and Health Administration regulations at 29 CFR part 1926 subpart L—Scaffolds.

Also excluded from the scope of these orders are tubular racks such as garment racks and drying racks, i.e., racks in which the load bearing vertical and horizontal steel members consist solely of: (1) Round tubes that are no more than two inches in diameter; (2) round rods that are no more than two inches in diameter; (3) other tubular shapes that have both an overall height of no more than two inches and an overall width of no more than two inches; and/or (4) wire.

Also excluded from the scope of these orders are portable tier racks. Portable tier racks must meet each of the following criteria to qualify for this exclusion:

(1) They are freestanding, portable assemblies with a fully welded base and four freely inserted and easily removable corner posts;

(2) They are assembled without the use of bolts, braces, anchors, brackets, clips, attachments, or connectors;

(3) One assembly may be stacked on top of another without applying any additional load to the product being stored on each assembly, but individual portable tier racks are not securely attached to one another to provide interaction or interdependence; and

(4) The assemblies have no mechanism (e.g., a welded foot plate with bolt holes) for anchoring the assembly to the ground.

Also excluded from the scope of these orders are accessories that are independently bolted to the floor and not attached to the rack system itself, i.e., column protectors, corner guards, bollards, and end row and end of aisle protectors.

Merchandise covered by these orders is currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under the following subheadings: 7326.90.8688, 9403.20.0081 and 9403.90.8041. Subject merchandise may also enter under subheadings 7308.90.3000, 7308.90.6000, 7308.90.9590, and 9403.20.0090. The HTSUS subheadings are provided for convenience and U.S. Customs purposes only. The written description of the scope is dispositive.