Railway Tank Cars and Parts Could be Subject to AD/CVD Duties

A petition filed Sept. 30 could result in the imposition of antidumping and countervailing duties on imports of railway tank cars and parts from Mexico.

Scope

Railway tank cars are designed to transport liquids, gases, and other bulk commodities by rail. Covered tank cars include:

– finished and unfinished pressure and non-pressure railway tank cars, tank car subassemblies, and underframe assemblies;

complete tank cars regardless of capacity, dimensions, tare weight, shell thickness, insulation, thermal protection system, jacket configuration, underframe design, or tank compartment configuration; and

– tank assemblies, which are used to import bulk liquids, gases, and other lading and consist of (1) welded cylindrical shell sections and end closures, and (2) underframe assemblies consisting of structural components such as center sills, body bolsters, and draft structures to support the tank assembly.

The petition covers such goods whether entered assembled or unassembled, separately or together with other subassemblies, and whether finished or unfinished. Processing and assembly operations such as welding, shaping, coating, painting, machining, or installation of additional components do not remove products from the scope.

Subject merchandise is primarily classified under HTSUS subheading 8606.10.0000 and may also enter under HTSUS subheadings 7309.00.0030, 7309.00.0090, 7311.00.0030, 7311.00.0060, 7311.00.0090, 7326.90.8688, 8607.99.1000, and 8609.00.0000.

Excluded from the scope of the petition are (1) DOT-111 tank cars with tank shells and tank heads constructed primarily of stainless steel, (2) DOT-105 and DOT-112 tank cars with a specified pressure rating of 499 pounds per square inch gauge or greater, and (3) DOT-113 cryogenic tank cars.

AD/CVD Duty Rates
The petition alleges that subject goods are being sold in the U.S. market at less than normal value at margins of 12.70 to 32.58 percent.

However, importers are typically liable for the payment of AD/CVD duties at the alleged rates only when importing from foreign producers or exporters that fail to cooperate with AD/CVD investigations by the Department of Commerce and International Trade Commission. Lower rates are often assigned to imports from cooperative entities.
The petition also argues that subject goods are being subsidized by the government of Mexico but does not assert specific rates.

Next Steps
The DOC and the ITC will consider this petition and quickly launch investigations to determine dumping margins/net subsidy rates and potential injury to the U.S. domestic industry, respectively. Preliminary determinations are due around Nov. 16, 2026, for the ITC and Dec. 24, 2026 (CVD), and March 9, 2027 (AD), for the DOC, although these dates may be extended.

If these preliminary determinations are affirmative, U.S. importers will be required to post AD and/or CVD cash deposits for all entries of subject goods entered on or after the date the DOC determinations are published. However, in certain circumstances duties could be owed three months prior to these dates. In addition, preliminary cash deposit rates can change in the final DOC determinations.
Many important issues affecting coverage, duty rates, and other considerations are argued and decided in the early stages of AD/CVD proceedings before preliminary determinations are issued. Companies that strategically engage in these early stages are thus best positioned to protect their interests and mitigate any potential duty liability. For more information, please contact Sandler, Travis & Rosenberg.