New Trade Case on Imports of Freight Rail Coupler Systems and Components Thereof From China

A new U.S. antidumping (“AD”) and countervailing (“CVD”) duty petition was filed on Sept. 29 by the Coalition of Freight Coupler Producers against imports of freight rail coupler systems and components thereof from the People’s Republic of China.

The merchandise covered by this petition covers freight rail couplers (“FRCs”) used to connect freight rail cars together. A rail coupler is a metal structure for connecting train cars. The coupler system resembles a curved human hand and holds the train cars together to eliminate the dangerous task for a railroad worker to stand between cars in order to join them together. Each train car typically has two couplers — one in the front and one in the back. The train coupler links the cars together and absorbs shocks during braking. The clasped-hand device joins, or couples, automatically when one or both knuckles are open and cars are pushed together. Upon impact, the knuckle wings into the closed position and a lock drops in place, securing the coupling. For a full description of the scope of the petition, please see the Scope section below.

The petition includes AD (less than fair value) and CVD (unfair subsidy) allegations against China. The Department of Commerce (“DOC”) and the International Trade Commission (“ITC”) will conduct the investigations.  Within the next 45 days, the ITC will determine if there is a reasonable indication that the imports are injuring the U.S. industry. If the ITC finds that standard is met, then the cases will move to the DOC which will calculate the preliminary AD and CVD duty margins.

The DOC’s preliminary determinations are currently scheduled for December 23, 2021 (CVD) and March 8, 2022 (AD), which are the dates when importers will be required to deposit the calculated duties upon the products’ entry in the U.S. market.

There are strict statutory deadlines associated with these proceedings and affected companies are advised to prepare as soon as possible. If this product is of interest to you, please let us know so that we can provide you with additional information as it becomes available.

The following are key facts about this trade case:

Petitioners: Coalition of Freight Coupler Producers (“CFCP”). CFCP is comprised of Amsted Rail Company, Inc. and McConway & Torley LLC.

Foreign Producers/Exporters and U.S. Importers: Please contact us for a listing of individual companies named in the petition.

AD/CVD margins: Petitioners have alleged the following AD/CVD margins:

• China: calculated dumping margins ranging from 142.98 % to 147.11 %, ad valorem, and a CVD margin above de minimis.

Merchandise covered by the scope of the case:

The scope of this investigation covers certain freight rail car coupler systems and components thereof. Subject freight rail car coupler systems are composed of knuckles, coupler bodies, coupler yokes, and follower blocks. Subject coupler systems and components are included within the scope whether finished or unfinished, whether assembled fully or partially 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. Only the subject coupler system and components are subject to duties if imported with or mounted with other non-subject merchandise. Subject freight rail coupler components imported individually independent from a coupler system are also included within the scope of the investigation.

A coupler system (also known as a “coupling”) is the mechanism used to connect freight rail cars together. The knuckles function as interlocking parts of the couplers that close automatically due to the force of the freight rail cars coming together. The coupler yoke functions as the pocket for the draft gear that connects couplers to the freight car. The follower block is a rectangularly shaped block of steel that is interposed between the back end of the coupler and the front working-end of the draft gear.

The products covered by the scope of this investigation, when imported into the United States, meet, intend to meet, or exceed the Association of American Railroads (“AAR”) specifications of M211, “Foundry and Product Approval Requirements for the Manufacture of Couplers, Coupler Yokes, Knuckles, Follower Blocks, and Coupler Parts” and/or AAR M215 “Coupling Systems,” or other equivalent domestic or international standards (including any revisions to the standard(s)). Subject merchandise include: (1) E and E/F couplers; (2) F couplers; (3) E yokes; (4) F yokes; (5) E and F knuckles; and (6) E and F type follower blocks. The inclusion, attachment, joining, or assembly of non-subject components with subject components or systems does not remove the subject components or systems from the scope.

The country of origin for subject coupler systems and components, whether fully assembled, unfinished, semi-finished, or finished, or attached to a rail car, is the country where the subject coupler components were cast and/or forged. Subject merchandise includes coupler components as defined above that have been further processed or further assembled, creating a more complex assembly in a third country, including those coupler components attached to a rail car in third countries. Only the value of the subject merchandise if entered attached to other non-subject products including the rail car will be subject to duties.

The couplers that are the subject of this investigation are currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) statistical reporting numbers 8607.30.1000. 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. These HTSUS provisions are given for reference and customs purposes only, and the description of the merchandise is dispositive for determining the scope of the product included in this petition.

If you have any questions regarding the content of this alert, please contact Mark Ludwikowski (mludwikowski@clarkhill.com; 202-640-6680), Kevin Williams (kwilliams@clarkhill.com; 312-985-5907); William Sjoberg (wsjoberg@clarkhill.com; 202-772-0924), Courtney Gayle Taylor (cgtaylor@clarkhill.com; 202-552-2350); Aristeo Lopez (alopez@clarkhill.com 202-552-2366); or another member of Clark Hill’s International Trade Business Unit.