Commission Implementing Regulation (EU) 2025/780 of 16 April 2025 imposing a provisional anti-dumping duty on imports of steel track shoes originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 23 August 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of steel track shoes originating in the People’s Republic of China (‘the country concerned’, ‘the PRC’ or ‘China’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 12 July 2024 by Duferco Travi e Profilati S.p.A. (‘the complainant’). The complaint was made by the Union industry of steel track shoes in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) The Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2024/2721 of 24 October 2024 (‘the registration Regulation’) (3).

(4) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the Government of the People’s Republic of China (‘GOC’), known importers, suppliers and users, and traders known to be concerned about the initiation of the investigation and invited them to participate.

(5) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(6) In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

Sampling of Union producers

(7) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. Only one Union producer came forward during the standing exercise and the Commission concluded that no sampling was necessary. The Union producer accounted for more than [52-58] % of the estimated total volume of production and approximately [6-11] % of the estimated total volume of sales of the like product in the Union. No comments were received from interested parties.

Sampling of unrelated importers

(8) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(9) No unrelated importers provided the requested information and therefore the Commission decided that sampling was not necessary. No comments were received from interested parties.

Sampling of exporting producers

(10) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the GOC to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(11) Fifteen exporting producers in the country concerned provided the requested information. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three exporting producers representing 62 % of the exports of the 15 Chinese exporting producers that provided the requested information.

(12) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the GOC.

(13) Furthermore, the complainant provided in the complaint sufficient evidence of raw material distortions in China regarding the product concerned. Therefore, as announced in the Notice of Initiation, the investigation covered those raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation with regard to China. For this reason, the Commission sent an additional questionnaire in this regard to the GOC.

(14) No reply was received from the GOC. Subsequently, on 11 October 2024, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC. No comments on the use of facts available were received.

(15) The Commission sent questionnaires to the Union producer, exporting producers, and the known importers and users. The same questionnaires were made available online (4) on the day of initiation.

(16) On 25 September 2024, the Commission informed the Chinese exporting producers of its sampling decision, granting the sampled exporting producers 30 days to submit their questionnaire replies. At this stage of the investigation, the sampled exporting producers did not notify the Commission that they would not submit a questionnaire reply.

(17) On 12 October 2024, two of the three sampled companies confirmed they would not submit a questionnaire reply due to the high workload involved.

(18) The deadline for the submission of the questionnaire reply expired on 25 October 2024. On 6 November 2024, the Commission asked the third sampled company to confirm whether it intended to submit a questionnaire reply. The third sampled exporting producer replied that it would also not submit a questionnaire reply either without providing a reason.

(19) Therefore, by 7 November 2024, almost two months and a half since the initiation of the investigation, it became clear that the three sampled Chinese exporting producers would not submit a questionnaire reply. While Article 17(4) of the basic Regulation allows for the selection of a new sample in case of sample failure, at such late stage of the investigation, it was no longer feasible for the Commission to change the full sample. Sampling other exporting producers would have significantly delayed the investigation.

(20) On 14 November 2024, the Commission issued a Note for the file (5) stating that, given that the sample of the exporting producers had failed, it intended to apply Article 18, in conjunction with Article 17(4), of the basic Regulation and to base its findings in respect of the Chinese exporting producers on best facts available. Neither of the non-sampled exporting producers came forward informing the Commission that they would like to be sampled.

(21) Considering that it was clear only at a late stage of the investigation that neither of the sampled exporting producers would cooperate and in view of the persisting material degree of non-cooperation of the exporting producers, the Commission decided to continue the investigation without selecting a new sample.

(23) The investigation of dumping and injury covered the period from 1 July 2023 to 30 June 2024 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2021 to the end of the investigation period (‘the period considered’).

(24) One Chinese exporting producer, Komatsu Machinery Manufacturing (Shandong) (‘Komatsu’) requested individual examination under Article 17(3) of the basic Regulation. According to the questionnaire reply, Komatsu manufactured and exported track groups during the investigation period. However, in order to produce the track groups, it purchased the steel track shoes from an unrelated supplier in China and assembled these onto track chains. Therefore, since Komatsu did not manufacture the steel track shoes, the Commission considered that it was an exporter and not an exporting producer of the product concerned. Accordingly, the Commission provisionally concluded that the request for individual examination could not be granted.

(25) The product under investigation is certain types of steel shoes, with or without rubber pads attached thereto, whether or not assembled in a track chain, with a maximum length of 3 000 mm, used on machines currently falling under headings 8426 , 8429 or 8430 , or conveyor belts currently falling under heading 8428 (‘the product under investigation’).

(26) The main use of steel track shoes (‘STS’) is as a component of tracked equipment used in construction and mining, such as excavators, bulldozers, cranes and conveyor belts. The product can be sold either standalone or as part of larger assembled components, such as ‘track groups’ (i.e. undercarriage parts formed by bolting together STS and track chains), ‘full track groups’ (i.e. track groups with additional components such as sprockets, rollers and idlers), and even complete undercarriages (supporting structures of earthmoving machines consisting each of two full track groups, their frames, and additional mechanical components).

(27) The main inputs for the production of STS are specialised steel products, called ‘steel profiles’. Steel profiles can be produced either by the same producers which produce the STS, or by other producers operating upstream. STS are produced by cutting steel profiles to length and possibly performing additional operations, such as heat treatment, drilling of holes, and painting.

(28) The assembly of STS into larger components, such as track groups, full track groups and undercarriages, can be performed either by the producers of the shoes themselves, or by other producers operating downstream (called ‘assemblers’).

(29) The product concerned is the product under investigation originating in the PRC, currently falling under CN codes currently classified under CN codes ex 8431 49 20 , ex 8431 39 00 , and ex 8431 49 80 (TARIC codes 8431 49 20 10, 8431 39 00 20 and 8431 49 80 10) (‘the product concerned’).

(31) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(32) The complainant argued that STS sold as part of a track group or a full track group should fall within the product scope.

(33) The Commission confirmed that, along with STS sold as a standalone component, STS sold as part of track groups or full track groups fall within the product scope. However, STS sold as part of components larger than a full track group, such as undercarriages or complete tracked machines, fall outside the product scope because STS represent only a relatively small fraction of the overall value of these larger components.

(34) One importer of floor plates from steel casting requested that this specific type of STS is excluded from the product scope on the grounds of significant differences in physical and technical characteristics as well as different end-uses when compared to the products produced by the Union industry. The importer claimed that these floor plates from steel casting are tailor-made and can only be used in crawler cranes and mining excavators produced by it.

(35) The importer came forward only several months after the deadlines specified in the Notice of Initiation. A more detailed assessment of the information provided was therefore not feasible at provisional stage due to time constraints set by the timeframe in Article 7(1) of the basic Regulation. The Commission notes that the products are currently imported under CN code 8431 49 20 falling within the product scope and that they are also falling within the product description of the Notice of initiation. The submission did therefore not affect the provisional conclusions concerning the product scope. However, the Commission will further investigate this issue and provide a final assessment at definitive stage of this investigation.

(36) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to the PRC, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

(37) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in the PRC to provide information regarding the inputs used for producing STS. Eight exporting producers submitted the relevant information.

(38) In order to obtain the information that it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. No submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. As mentioned in recital (13), no reply to the questionnaire was received from the GOC.

(39) In point 3 of the Notice of Initiation, the Commission also specified that, in view of the evidence available, it had provisionally selected Türkiye as an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. The Commission further stated that it would examine other possibly appropriate representative countries in accordance with the criteria set out in 2(6a)(a) first indent of the basic Regulation.

(40) On 14 November 2024, the Commission informed by a Note for the file (6) all interested parties on the relevant sources it intended to use for the determination of the normal value. In the Note, the Commission stated that in view of the fact that none of the sampled exporting producers submitted a reply to the questionnaire and thus failed to cooperate in the investigation, the information provided by the complainant and other sources of available information deemed appropriate according to the criteria laid down in Article 2(6a) of the basic Regulation, including the database of the World Bank, Orbis Bureau van Dijk (‘Orbis’), Global Trade Atlas (‘GTA’) and International Labour Organisation (‘ILO’) statistics, were used to prepare the list of factors of production such as raw materials, labour and energy used in the production of STS. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified possible representative countries, namely Türkiye and Indonesia as possible appropriate representative countries. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A costs’) and profits based on the information publicly available of producers of STS in the representative country. The Commission received no comments on the Note.

(41) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

(42) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined … that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’.

(43) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

(44) In recent investigations concerning the steel sector in the PRC (7), the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

(45) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles (8). In particular, the Commission concluded that in the steel sector, which is the sector of the main raw material to produce the product under investigation, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation (9), but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (10). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (11). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC (12). In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (13), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC (14).