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[Federal Register Volume 89, Number 232 (Tuesday, December 3, 2024)]
[Notices]
[Pages 95744-95747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28238]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-570-175]

Certain Brake Drums From the People's Republic of China: 
Preliminary Affirmative Countervailing Duty Determination and Alignment 
of Final Determination With Final Antidumping Duty Determination

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

SUMMARY: The U.S. Department of Commerce (Commerce) preliminarily 
determines that countervailable subsidies are being provided to 
producers and exporters of certain brake drums (brake drums) from the 
People's Republic of China (China). The period of investigation is 
January 1, 2023, through December 31, 2023. Interested parties are 
invited to comment on this preliminary determination.

DATES: Applicable February 3, 2024.

FOR FURTHER INFORMATION CONTACT: Nathan James or Olivia Woolverton, 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) 482-5305 or (202) 
482-7452, respectively.

SUPPLEMENTARY INFORMATION:

Background

    This preliminary determination is made in accordance with section 
703(b) of the Tariff Act of 1930, as amended (the Act). Commerce 
published the notice of initiation of this countervailing duty (CVD) 
investigation on July 17, 2024.\1\ On July 22, 2024, Commerce tolled 
certain deadlines in this administrative proceeding by seven

[[Page 95745]]

days.\2\ On September 6, 2024, Commerce postponed the preliminary 
determination until November 25, 2024.\3\
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    \1\ See Certain Brake Drums from the People's Republic of China 
and the Republic of T[uuml]rkiye: Initiation of Countervailing Duty 
Investigations, 89 FR 58106 (July 17, 2024) (Initiation Notice).
    \2\ See Memorandum, ``Tolling of Deadlines for Antidumping and 
Countervailing Duty Proceedings,'' dated July 22, 2024.
    \3\ See Certain Brake Drums from the People's Republic of China 
and the Republic of T[uuml]rkiye: Postponement of Preliminary 
Determinations in the Countervailing Duty Investigations, 89 FR 
72827 (September 6, 2024).
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    For a complete description of events that followed the initiation 
of this investigation, see the Preliminary Decision Memorandum.\4\ A 
list of topics discussed in the Preliminary Decision Memorandum is 
included as Appendix II to this notice. The Preliminary Decision 
Memorandum is a public document and is on file 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 Preliminary Decision Memorandum can be accessed directly 
at https://access.trade.gov/public/FRNoticesListLayout.aspx.
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    \4\ See Memorandum, ``Decision Memorandum for the Preliminary 
Affirmative Determination of the Countervailing Duty Investigation 
of Certain Brake Drums from the People's Republic of China,'' dated 
concurrently with, and hereby adopted by, this notice (Preliminary 
Decision Memorandum).
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Scope of the Investigation

    The products covered by this investigation are brake drums from 
China. For a complete description of the scope of this investigation, 
see Appendix I.

Scope Comments

    In accordance with the Preamble to Commerce's regulations,\5\ the 
Initiation Notice set aside a period of time for parties to raise 
issues regarding product coverage (i.e., scope).\6\ Certain interested 
parties commented on the scope of the investigation as it appeared in 
the Initiation Notice. Commerce intends to issue its preliminary 
decision regarding comments concerning the scope of the antidumping 
(AD) and CVD investigations in the preliminary determination of the 
companion AD investigations. We will incorporate the scope decisions 
from the AD investigations into the scope of the final CVD 
determination for this investigation after considering any relevant 
comments submitted in scope case and rebuttal briefs.\7\
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    \5\ See Antidumping Duties; Countervailing Duties, Final Rule, 
62 FR 27296, 27323 (May 19, 1997) (Preamble).
    \6\ See Initiation Notice, 89 FR at 58109.
    \7\ The deadline for interested parties to submit scope case and 
rebuttal briefs will be established in the preliminary scope 
decision memorandum.
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Methodology

    Commerce is conducting this investigation in accordance with 
section 701 of the Act. For each of the subsidy programs found to be 
countervailable, Commerce preliminarily determines that there is a 
subsidy, i.e., a financial contribution by an ``authority'' that gives 
rise to a benefit to the recipient, and that the subsidy is 
specific.\8\ For a full description of the methodology underlying our 
preliminary determination, see the Preliminary Decision Memorandum.
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    \8\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    Commerce notes that, in making these findings, it relied, in part, 
on facts available, and, because it finds that certain companies that 
failed to timely respond to Commerce's quantity and value (Q&V) 
questionnaire, as well as the Government of China, did not act to the 
best of their abilities to respond to Commerce's requests for 
information, it drew an adverse inference where appropriate in 
selecting from among the facts otherwise available.\9\ For further 
information, see the ``Use of Facts Otherwise Available and Adverse 
Inferences'' section in the Preliminary Decision Memorandum.
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    \9\ See sections 776(a) and (b) of the Act.
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Alignment

    In accordance with section 705(a)(1) of the Act and 19 CFR 
351.210(b)(4), Commerce is aligning the final CVD determination in this 
investigation with the final determination in the concurrent AD 
investigation of brake drums from China, based on a request made by the 
petitioner.\10\ Consequently, the final CVD determination will be 
issued on the same date as the final AD determination, which is 
currently scheduled to be issued no later than April 8, 2025, unless 
postponed.\11\
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    \10\ See Petitioner's Letter, ``Request to Align Final 
Antidumping and Countervailing Duty Determination,'' dated November 
7, 2024.
    \11\ See Certain Brake Drums from the Republic of T[uuml]rkiye 
and the People's Republic of China: Postponement of Preliminary 
Determinations in the Less-Than-Fair-Value Investigations, 89 FR 
91675 (November 20, 2024).
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All-Others Rate

    Sections 703(d) and 705(c)(5)(A) of the Act provide that, in the 
preliminary determination, Commerce shall determine an estimated all-
others rate for companies not individually examined. This rate shall be 
an amount equal to the weighted average of the estimated subsidy rates 
established for those companies individually examined, excluding any 
rates that are zero, de minimis, or based entirely under section 776 of 
the Act.
    In this investigation, Commerce preliminarily calculated total net 
subsidy rates for CAIEC Trailer Master Co., Ltd. (CAIEC Trailer) and 
Shandong ConMet Mechanical, Ltd. (Shandong ConMet) that are not zero, 
de minimis, or based entirely on the facts otherwise available. Because 
Commerce calculated individual estimated countervailable subsidy rates 
for CAIEC Trailer and Shandong ConMet that are not zero, de minimis, or 
based entirely on the facts otherwise available, we have preliminarily 
calculated the all-others rate using a weighted-average of the 
individual estimated subsidy rates calculated for the examined 
respondents using each company's publicly-ranged sales values.\12\
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    \12\ See Memorandum, ``Calculation of Subsidy Rate for All 
Others,'' dated concurrently with this notice.
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Rate for Non-Responsive Companies

    Thirteen potential exporters and/or producers of brake drums from 
China did not timely respond to Commerce's Q&V questionnaire.\13\ We 
find that, by not timely responding to the Q&V questionnaire, these 
companies withheld requested information and significantly impeded this 
proceeding. Thus, in reaching our preliminary determination, pursuant 
to sections 776(a)(2)(A) and (C) of the Act, we are basing the subsidy 
rate for the non-responsive companies on facts otherwise available.
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    \13\ These companies are: (1) Guangzhou Joyhand Import & Export 
Co.; (2) Hebei Iruijin Auto Parts Co., Ltd.; (3) Henan Broad Top 
Metal Work, Llc.; (4) Henan Valiant Braking System Co.; (5) HTS 
(Tianjin) Supply Chain Co., Ltd.; (6) Panasia CVS (HK), Ltd.; (7) 
Raw King Brake Parts Co., Ltd.; (8) Tianjin Textile Group Import and 
Export Inc.; (9) Xiamen Tinmy Industrial Co., Ltd.; (10) Xingtai 
Xunchiyoute Auto Parts Co.; (11) Yancheng Terbon Auto Parts Co.; 
(12) Yantai Hongtian Autoparts Co., Ltd.; and (13) Zhejiang Firsd 
Group Co., Ltd.
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    We further preliminarily determine that an adverse inference is 
warranted, pursuant to section 776(b) of the Act. By failing to submit 
responses to Commerce's Q&V questionnaire, the non-responsive companies 
did not cooperate to the best of their abilities in this investigation. 
Accordingly, we preliminarily find that an adverse inference is 
warranted to ensure that the non-responsive companies will not obtain a 
more favorable result than had they fully complied with our request for 
information. For more information on

[[Page 95746]]

the application of adverse facts available to the non-responsive 
companies, see ``Use of Facts Otherwise Available and Adverse 
Inferences'' in the Preliminary Determination Memorandum.

Preliminary Determination

    Commerce preliminarily determines that the following estimated 
countervailable subsidy rates exist:
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    \14\ Commerce found CAIEC Trailer Master Co., Ltd. and Trailer 
Master CVS Inc to be cross-owned entities.
    \15\ Commerce found Shandong ConMet Mechanical, Ltd. and Weifang 
ConMet Mechanical Products Co., Ltd. to be cross-owned entities.

------------------------------------------------------------------------
                                                           Subsidy rate
                         Company                            (percent ad
                                                             valorem)
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CAIEC Trailer Master Co., Ltd./Trailer Master CVS Inc              41.51
 \14\...................................................
Shandong ConMet Mechanical, Ltd./Weifang ConMet                     6.76
 Mechanical Products Co., Ltd.\15\......................
Guangzhou Joyhand Import & Export Co....................        * 303.07
Hebei Iruijin Auto Parts Co., Ltd.......................        * 303.07
Henan Broad Top Metal Work, Llc.........................        * 303.07
Henan Valiant Braking System Co.........................        * 303.07
HTS (Tianjin) Supply Chain Co., Ltd.....................        * 303.07
Panasia CVS (HK), Ltd...................................        * 303.07
Raw King Brake Parts Co., Ltd...........................        * 303.07
Tianjin Textile Group Import and Export Inc.............        * 303.07
Xiamen Tinmy Industrial Co., Ltd........................        * 303.07
Xingtai Xunchiyoute Auto Parts Co.......................        * 303.07
Yancheng Terbon Auto Parts Co...........................        * 303.07
Yantai Hongtian Autoparts Co., Ltd......................        * 303.07
Zhejiang Firsd Group Co., Ltd...........................        * 303.07
All Others..............................................           16.17
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* Rate based on facts available with adverse inferences.

Disclosure

    Commerce intends to disclose to interested parties the calculations 
performed in connection with this preliminary determination within five 
days of its public announcement or, if there is no public announcement, 
within five days of the date of publication of this notice in 
accordance with 19 CFR 351.224(b).
    Consistent with 19 CFR 351.224(e), Commerce will analyze and, if 
appropriate, correct any timely allegations of significant ministerial 
errors by amending the preliminary determination. However, consistent 
with 19 CFR 351.224(d), Commerce will not consider incomplete 
allegations that do not address the significance standard under 19 CFR 
351.224(g) following the preliminary determination. Instead, Commerce 
will address such allegations in the final determination together with 
issues raised in the case briefs or other written comments.

Suspension of Liquidation

    In accordance with section 703(d)(1)(B) and (d)(2) of the Act, 
Commerce will direct U.S. Customs and Border Protection (CBP) to 
suspend liquidation of entries of subject merchandise as described in 
the scope of the investigation entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. Further, pursuant to 19 CFR 351.205(d), Commerce 
will instruct CBP to require a cash deposit equal to the rates 
indicated above.

Verification

    As provided in section 782(i)(1) of the Act, Commerce intends to 
verify the information relied upon in making its final determination.

Public Comment

    All interested parties will have the opportunity to submit scope 
case and rebuttal briefs on the preliminary decision regarding the 
scope of the AD and CVD investigations. The deadlines to submit scope 
case and rebuttal briefs will be provided in the preliminary scope 
decision memorandum. For all scope case and rebuttal briefs, parties 
must file identical documents simultaneously on the records of the 
ongoing AD and CVD brake drums investigations. No new factual 
information or business proprietary information may be included in 
either scope case or rebuttal briefs.
    Case briefs or other written comments on non-scope issues may be 
submitted to the Assistant Secretary for Enforcement and Compliance no 
later than seven days after the date on which the last verification 
report is issued in this investigation. Rebuttal briefs, limited to 
issues raised in the case briefs, may be filed not later than five days 
after the date for filing case briefs.\16\ Interested parties who 
submit case briefs or rebuttal briefs in this proceeding must submit: 
(1) a table of contents listing each issue; and (2) a table of 
authorities.\17\
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    \16\ See 19 CFR 351.309(d); see also Administrative Protective 
Order, Service, and Other Procedures in Antidumping and 
Countervailing Duty Proceedings, 88 FR 67069, 67077 (September 29, 
2023) (APO and Service Final Rule).
    \17\ See 19 CFR 351.309(c)(2) and (d)(2).
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    As provided under 19 CFR 351.309(c)(2) and (d)(2), in prior 
proceedings we have encouraged interested parties to provide an 
executive summary of their briefs that should be limited to five pages 
total, including footnotes. In this investigation, we instead request 
that interested parties provide at the beginning of their briefs a 
public, executive summary for each issue raised in their briefs.\18\ 
Further, we request that interested parties limit their executive 
summary of each issue to no more than 450 words, not including 
citations. We intend to use the executive summaries as the basis of the 
comment summaries included in the issues and decision memorandum that 
will accompany the final determination in this investigation. We 
request that interested parties include footnotes for relevant 
citations in the executive summary of each issue. Note that Commerce 
has amended certain of its requirements pertaining to the service of 
documents in 19 CFR 351.303(f).\19\
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    \18\ We use the term ``issue'' here to describe an argument that 
Commerce would normally address in a comment of the Issues and 
Decision Memorandum.
    \19\ See APO and Service Final Rule, 88 FR at 67069.
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    Pursuant to 19 CFR 351.310(c), interested parties who wish to 
request a hearing, limited to issues raised in the case and rebuttal 
briefs, must submit a written request to the Assistant Secretary for 
Enforcement and Compliance, U.S. Department of Commerce via ACCESS 
within 30 days after the date of publication of this notice. Requests 
should contain the party's name, address, and telephone number, the 
number of participants and whether any participant is a foreign 
national, and a list of the issues to be discussed. Oral presentations 
at the hearing will be limited to issues raised in the briefs. If a 
request for a hearing is made, parties will be notified of the time and 
date for the hearing.\20\ Parties should confirm by telephone the date, 
time, and location of the hearing two days before the scheduled date.
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    \20\ See 19 CFR 351.310(d).
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U.S. International Trade Commission Notification

    In accordance with section 703(f) of the Act, Commerce will notify 
the U.S. International Trade Commission (ITC) of its determination. If 
the final determination is affirmative, the ITC will determine before 
the later of 120 days after the date of this preliminary

[[Page 95747]]

determination or 45 days after the final determination whether imports 
of brake drums from China are materially injuring, or threaten material 
injury to, the U.S. industry.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 703(f) and 777(i)(1) of the Act, and 19 CFR 351.205(c).

    Dated: November 25, 2024.
Abdelali Elouaradia,
Deputy Assistant Secretary for Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The products covered by this investigation are certain brake 
drums made of gray cast iron, whether finished or unfinished, with 
an actual or nominal inside diameter of 14.75 inches or more but not 
over 16.6 inches, weighing more than 50 pounds. Unfinished brake 
drums are those which have undergone some turning or machining but 
are not ready for installation. Subject brake drums are included 
within the scope whether imported individually or with non-subject 
merchandise (for example, a hub), whether assembled or unassembled, 
or if joined with non-subject merchandise. When a subject drum is 
imported together with non-subject merchandise, such as, but not 
limited to, a drum-hub assembly, only the subject drum is covered by 
the scope.
    Subject merchandise also includes finished and unfinished brake 
drums that are further processed in a third country or in the United 
States, including, but not limited to, assembly or any other 
processing that would not otherwise remove the merchandise from the 
scope of the investigation if performed in the country of 
manufacture of the subject brake drums. The inclusion, attachment, 
joining, or assembly of non-subject merchandise with subject drums 
either in the country of manufacture of the subject drum or in a 
third country does not remove the subject drum from the scope. 
Specifically excluded is merchandise covered by the scope of the 
antidumping and countervailing duty orders on certain chassis and 
subassemblies thereof from the People's Republic of China. See 
Certain Chassis and Subassemblies Thereof from the People's Republic 
of China: Antidumping Duty Order, 86 FR 36093 (July 8, 2021) and 
Certain Chassis and Subassemblies Thereof from the People's Republic 
of China: Countervailing Duty Order and Amended Final Affirmative 
Countervailing Duty Determination, 86 FR 24844 (May 10, 2021).
    The scope also excludes composite brake drums that contain more 
than 40 percent steel by weight.
    The merchandise covered by this investigation is classifiable 
under Harmonized Tariff Schedule of the United States (HTSUS) 
subheading 8708.30.5020. The merchandise covered by the 
investigation may be classifiable under HTSUS subheading 
8708.30.5090 when entered as part of an assembly. Subject 
merchandise may also enter under HTSUS subheading 8716.90.5060. 
Although the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the merchandise covered 
by this investigation is dispositive.

Appendix II

List of Topics Discussed in the Preliminary Decision Memorandum

I. Summary
II. Background
III. Injury Test
IV. Analysis of China's Financial System
V. Diversification of China's Economy
VI. Use of Facts Available and Adverse Inferences
VII. Subsidies Valuation
VIII. Benchmarks and Interest Rates
IX. Analysis of Programs
X. Recommendation

[FR Doc. 2024-28238 Filed 12-2-24; 8:45 am]
BILLING CODE 3510-DS-P
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