Authors: Anne-Marie Oatway
On June 10, 2021, the Canada Border Services Agency (the “CBSA”) initiated an investigation under the Special Import Measures Act (“SIMA”) respecting the alleged injurious dumping and subsidizing of certain container chassis from China (the “subject goods”). This investigation arises from a complaint that was filed by Max‑Atlas Equipment International Inc. in April 2021.
A positive outcome for the complainant would result in anti-dumping and countervailing duties being applied to Chinese imports of container chassis for at least five years.
The initiation of this case is a significant development for all companies that produce container chassis in Canada. This is not only because of the impact that this case may have on the market, but also the detailed information that producers will be required to provide to the Canadian International Trade Tribunal (the “CITT”) if a final injury inquiry is initiated.
Chassis are typically rectangular framed trailers with a suspension and axle system, wheels and tires, brakes, a lighting and electrical system, a coupling for towing behind a truck tractor, and a locking system or systems to secure the shipping container or containers to the chassis using twistlocks, slide pins or similar attachment devices to engage the corner fittings on the container or other payload. The case covers chassis that are imported into Canada in a fully assembled form, or imported as an unassembled chassis (e.g., a chassis frame accompanied by the relevant subassemblies) with most or all of the integral items required to assemble a chassis into a finished form. Note that dry van trailers, refrigerated van trailers, and flatbed or platform trailers are not part of the case. See Appendix 1 for the exact goods covered by and excluded from the case.
These chassis are typically used in the transportation of intermodal cargo containers and are skeletal rectangular framed trailers. The chassis are designed to carry containers of various sizes, usually ranging from 20’ to 60’ in Canada. Containers that are carried by the Chinese chassis include: marine containers (also known as “ISO containers”); containers designed to be carried exclusively over land and not via ocean transport; tank containers for the carriage of liquids or sand; flat racks (containers without sides); generators for emergency systems and temporary power delivery; and waste containers.
The Chinese container chassis are usually classified under the following tariff classification number: 8718.104.22.168.
The CITT is expected to initiate its Preliminary Injury Inquiry on June 11, 2021. The CBSA and the CITT conduct separate proceedings in parallel, with the CBSA investigating whether the goods have been dumped and/or subsidized and the CITT inquiring into whether Canadian producers of container chassis have been injured. The likely timeline for this case is as follows:
The U.S. Case
A similar case recently took place in the United States (the “U.S.”) on chassis and subassemblies from China. On April 13, 2021, the U.S. International Trade Commission found (“ITC”) that the U.S. industry has been materially injured by subsidized Chinese imports of chassis and subassemblies, which means that countervailing duties now apply for the next 5 years. The U.S. Department of Commerce (“DOC”) made a positive final dumping determination in May 2021 and the ITC will make its final injury determination regarding the dumped goods on June 16, 2021; in the event of a positive finding, anti-dumping duties would also apply for the next 5 years. The amount of subsidy is 44.32% and the margin of dumping is 188.05%.
The specific products covered by the U.S. case are chassis and subassemblies (whether finished/unfinished, assembled/unassembled, coated /uncoated), regardless of the number of axles, for carriage of containers, or other payloads (including self-supporting payloads) for road, marine roll-on/roll-off (RORO) and/or rail transport. Like the Canadian case, the U.S. case does not include dry van trailers, refrigerated van trailers, and flatbed trailers.
The U.S. case followed a petition filed by the industry in July 2020. The DOC applied provisional countervailing duties in December 2020 and provisional anti-dumping duties in February 2021. Import data shows that U.S. imports of chassis and subassemblies from China decreased by 11% from 2019 to 2020.
SIMA Protection for Canadian Producers
A positive final injury determination by the CITT would result in anti-dumping and countervailing duties being in place on Chinese imports of container chassis for at least the next five years. This typically results in subject goods withdrawing from the Canadian market while a finding is in place, as they are unable to compete at undumped prices. After five years, the CITT will initiate a review to determine whether the finding should be renewed for another five years.
SIMA duties protect the domestic industry and help restore Canadian market prices to fairly traded levels. Canadian producers often see improved financial performance, higher pricing, and market share gains once dumped and subsidized goods exit the market.
As part of its final injury inquiry, the CITT will require all Canadian producers, importers and purchasers of container chassis to complete detailed questionnaires. The data that is collected through this process will form the basis for the CITT’s decision. All Canadian producers of container chassis should familiarize themselves with the timeline for the case and the type of information that they will be required to provide.
If you have any questions or would like to learn more about this case or other trade remedies, please contact the author of this article.
Container chassis and container chassis frames, whether finished or unfinished, assembled or unassembled, regardless of the number of axles, for the carriage of containers, or other payloads (including self‑supporting payloads) for road, marine roll‑on/roll‑off and/or rail transport, and certain subassemblies of container chassis originating in or exported from the People’s Republic of China.
The subject goods include the following complete or substantially complete major subassemblies, when imported, purchased or supplied with, or for assembly with, subject container chassis frames:
These trailers are not part of the case:
 Container Chassis, CC 2021 IN, Notice of Initiation of Investigations (June 10, 2021).
 In some instances, imports of the subject goods may also be classified under these tariff classification numbers: 8706.00.90.90, 8722.214.171.124, 8716.40.00.00, 87126.96.36.199, 8716.90.30.00, 87188.8.131.52, and 87184.108.40.206.
 ITC CVD case no: C-657; DOC CVD case no: C-570-136 (CVD order date is May 10, 2021).
 Certain Chassis and Subassemblies Thereof From the People’s Republic of China: Countervailing Duty Order and Amended Final Affirmative Countervailing Duty Determination, F. R. Vol. 86, No. 88 (May 10, 2021) at 24845; Certain Chassis and Subassemblies Thereof From the People’s Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value, F.R. Vol. 86, No. 93 (May 17, 2021) at 26694.
 Chassis are typically, but are not limited to, rectangular framed trailers with a suspension and axle system, wheels and tires, brakes, a lighting and electrical system, a coupling for towing behind a truck tractor, and a locking system or systems to secure the shipping container or containers to the chassis using twistlocks, slide pins or similar attachment devices to engage the corner fittings on the container or other payload. For a fulsome description of subassemblies that are included in the product definition, see Certain Chassis and Subassemblies Thereof From the People’s Republic of China: Countervailing Duty Order and Amended Final Affirmative Countervailing Duty Determination, F. R. Vol. 86, No. 88 (May 10, 2021) at 24845.
 U.S. census data for HTSUS 8716.39.00.90 and 87220.127.116.11, retrieved from the USITC DataWeb on June 10, 2021. Note that goods are possibly also imported under HTSUS 8718.104.22.168, but this is excluded from the percentages above.