The following communication, dated and received on 6 May 2025, is being circulated at the request of the delegation of the United States.

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The United States thanks China for its questions regarding the notification by the United States, and provides the following responses:

Question 1

The newly added 19 CFR Sec. 351.108 (a) stipulates that "(a)ll merchandise from the nonmarket economy exported to the United States and subject to an antidumping proceeding by entities in the nonmarket economy determined by the Secretary on the basis of record information to be part of the government-controlled entity may be assigned the antidumping cash deposit or assessment rate applied to the government-controlled entity." However, the panel in US – ANTI‑DUMPING METHODOLOGIES (CHINA) (DS471) found that the Single Rate Presumption is a norm of general and prospective application inconsistent "as such" with Arts. 6.10 and 9.2, and that the application of the Single Rate Presumption in the 38 challenged determinations was inconsistent "as applied". The United States didn't appeal on such findings. Please elaborate the United States' considerations for formally incorporating the Single Rate Presumption norm which has be found inconsistent with the WTO Rules by an effective DSB report into its Federal Regulations.

Reply:

China's statement that 19 CFR § 351.108(a) "incorporate[es] the Single Rate Presumption" is incorrect. Section 351.108(a) indicates, "When the Secretary determines that a country is a nonmarket economy country in an antidumping proceeding pursuant to section 771(18) of the Act, the Secretary may determine that all entities located in that nonmarket economy country are subject to government control and thus part of a single, government-controlled entity" (underline added).

Question 2

The newly added 19 CFR Sec. 351.109(f)(2)(ii) stipulates that "(i)f the Secretary determines that weight-averaging calculated dumping margins or countervailable subsidy rates established for individually investigated exporters or producers could result in the inadvertent release of proprietary information among the individually investigated exporters or producers", the Secretary will compare the simple-average and weighted‑average dumping margins or countervailable subsidy rates for the individually investigated exporters or producers using public data, and apply the one that is numerically the closest to the weighted average rate calculated using the business proprietary data. Please confirm:

(1) if it's possible that an all-others rate calculated using the above methodology higher than the weighted average rate of the selected (or individually investigated) exporters or producers and,

(2) if yes, how such methodology could be consistent with Art. 9.4 (i) of the Anti‑dumping Agreement.

Reply:

China's question is based on a hypothetical situation. The United States respectfully declines to respond to speculative matters not in existence. U.S. laws are fully consistent with all WTO obligations, including obligations set out in the AD Agreement.

Question 3

The newly added 19 CFR Sec. 351.109(f)(2)(iii) stipulates that "(i)f the estimated weighted average dumping margins or countervailable subsidy rates established for all individually investigated exporters and producers are zero, de minimis, or determined entirely under section 776 of the Act, the Secretary may use any reasonable method to establish an all-others rate for exporters and producers not individually examined, including averaging the estimated weighted average dumping margins or countervailable subsidy rates determined for the individually investigated exporters and producers."

(1)_      Will this methodology violate Art. 9.4 of the Anti-dumping Agreement, as the zero, de minimis and facts-available-based dumping margins or countervailable subsidy rates, which are determined for the individually investigated exporters and producers, are not "disregarded" as required?

(2)_      How will the U.S. investigating authority average "the estimated weighted average" dumping margins or subsidy rates?

(3)_      Has the U.S. investigating authority envisaged any other "reasonable method" to establish the all others rates?

Reply:

U.S. laws are fully consistent with all WTO obligations, including obligations set out in Article 9.4 of the AD Agreement. Under 19 CFR 351.109(f)(2)(iii), if the countervailable subsidy rates or estimated weighted average dumping margins established for all exporters and producers individually investigated are zero or de minimis rates, or are determined entirely under section 776, the administering authority may use any reasonable method to establish an all-others rate for exporters and producers not individually investigated, including averaging the weighted average countervailable subsidy rates or estimated weighted average dumping margins determined for the exporters and producers individually investigated. As explained in the Proposed Rule, the Statement of Administrative Action Accompanying the Uruguay Round Agreements Act (SAA) "provides that 'the expected method is for Commerce to weight-average such rates to determine the non-selected respondents' rate.' However, the SAA also states that if the expected method 'is not feasible, or if it results in an average that would not be reasonably reflective of potential dumping margins for non_‑investigated exporters or producers, Commerce may use other reasonable methods.'" 89 Fed. Reg. 57299. Any determination to use any other reasonable method will be fact specific.

Question 4

The newly added 19 CFR Sec. 351.109 (d) stipulates that "(t)he Secretary may waive individual examination of an exporter or producer selected to be an examined respondent if both the selected respondent and the petitioner file waiver requests for that selected respondent no later than five days after the Secretary has selected respondents." Please explain the purpose of this paragraph, and elaborate why such an artificial selection of sampled respondents could be consistent with Art. 6.10 of the Anti-dumping Agreement.

Reply:

Under 19 CFR 351.109(d), Commerce may waive individual examination of an exporter or producer if both the selected respondent and petitioner file waiver requests for that exporter or producer no later than five days after Commerce has selected respondents. When Commerce limits its examination to a reasonable number of exporters or producers, Commerce determines the exporters or producers to be examined based on either a sample of exporters or producers that is statistically valid based on record information or the number of respondents that can be reasonably examined based on the largest volume of exports of subject merchandise from the exporting country. Use of the waiver provision under 19 CFR 351.109(d) is not limited to when Commerce selects respondents based on sampling; that is, as indicated in the Proposed Rule:, "[i]f Commerce determines to provide such a waiver and had selected the waived respondent based on an analysis of the largest exporters or producers, proposed § 351.109(d) provides that Commerce could select the next largest exporter or producer to replace the waived respondent." 89 Fed. Reg. at 57297.

Question 5

The revised 19 CFR Sec. 351.301 (c)(3)(i)(B) stipulates that "(a)ll submissions of factual information to measure the adequacy of remuneration under Sec. 351.511(a)(2) in a countervailing duty investigation are due no later than 45 days before the scheduled date of the preliminary determination." Please clarify that, if a new allegation on subsidy programs related with the adequacy of remuneration after this deadline, will the interested parties be granted any extension for providing related factual information?

Reply:

In the Final Rule, Commerce explained that if a new subsidy "less than adequate remuneration" (LTAR) allegation is filed on or near the due date specified in 19 C.F.R. § 351.301(c)(2)(iv)(A), and the deadlines for benchmark information submissions have passed or are imminent, Commerce will determine that such deadlines do not apply to those allegations and would likely establish a separate schedule for the interested parties to provide them with sufficient time to submit benchmark information. See 89 Fed. Reg. at 101711.

Question 6

The revised 19 CFR Sec. 351.525 (b)(6)(v) stipulates that "(i)f there is cross-ownership between a corporation providing electricity, natural gas or other similar utility product and a producer of subject merchandise, the Secretary will attribute subsidies received by that provider to the combined sales of that provider and the sales of products sold by the producer of subject merchandise if at least one of the following two conditions are met: (A) a substantial percentage, normally defined as 25% or more, of the production of the cross-owned utility provider is provided to the producer of subject merchandise, or (B) the producer of subject merchandise purchases a substantial percentage, normally defined as 25% or more, of its electricity, natural gas, or other similar utility product from the cross-owned provider." Please explain the reason why the U.S. chooses thresholds of 25%?

Reply:

As Commerce explained in the Final Rule, the purpose of this regulation "is to provide both clarity to the public with respect to the agency's treatment of cross-owned utility providers and to provide more consistency in Commerce's treatment of cross-owned utility providers." 89 Fed. Reg. at 101743. The 25 percent threshold also "provides useful regulatory guidance that will assist Commerce in determining which cross-owned companies need to provide full questionnaire responses." Id. Commerce further noted that, in its view, "a utility company providing 25 percent of its output to one company indicates a significant level of dependency and dedication to one customer, and a company that purchases 25 percent of its energy needs from one supplier has also become engaged in a significant supplier relationship." Id.

Question 7

The revised 19 CFR Sec. 351.525 (d) stipulates that "(f)or countries experiencing an inflation rate greater than 25% per annum during the relevant period, the Secretary will normally adjust the benefit amount (numerator) and the sales data (denominator) to account for the rate of inflation during the relevant period of investigation or review in calculating the ad valorem subsidy rate." Please explain how will the investigating authority do the adjustment, and why the threshold of 25% per annum is chosen.

Reply:

How Commerce will normally adjust the benefit amount (numerator) and the sales data (denominator) for countries experiencing an inflation rate greater than 25 percent per annum during the relevant period is explained in great detail in the Final Rule, 89 Fed. Reg. at 101749-101751. Please refer to those pages of the Final Rule for a response to this question. As further explained in the Final Rule, Commerce's past administrative experience led it to determine that an inflation rate of 25 percent constitutes "high inflation." 89 Fed. Reg. at 101750.

Question 8

The revised 19 CFR Sec. 351.526 (d) stipulates that the deadline to rebut the presumption that non-recurring subsidies continue to benefit a recipient in full over an allocation period notwithstanding an intervening change in ownership shall be the same as the respondent's or government's initial questionnaire response. Please clarify, with respect to programs initiated upon new allegations or found in the investigation, if the respondent or government will have any extension for submitting relevant information.

Reply:

The United States understands China's question to be asking about 19 C.F.R. 351.526(b)(4), which addresses deadlines. As explained in the Final Rule, Commerce generally agrees it would be appropriate to permit additional time to provide rebuttal information with respect to a new subsidy allegation raised concerning a change in ownership, and will consider what alternative deadlines would be appropriate on a case-by-case basis such that all interested parties have an opportunity to present relevant evidence and fully defend their interests. See 89 Fed. Reg. at 101753.

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