The U.S. Court of International Trade (“CIT”) has again rejected the U.S. Department of Commerce’s (“Commerce”) determination that chassis manufactured in Vietnam with Chinese-origin parts are covered by the antidumping (“AD”) and countervailing duty (“CVD”) orders on chassis from China. In Pitts Enterprises, Inc. dba Dorsey Intermodal v. United States, Slip Op. 26-121 (October 7, 2026), Judge Claire R. Kelly remanded Commerce’s redetermination for a second time. The court held that Commerce’s reading of the orders to cover “unfinished subassemblies” is contrary to their plain meaning, and that, in any event, the phrase “any other processing” in the orders does not include welding or fabrication.
The decision matters to any company that imported chassis made outside China, in Vietnam or elsewhere, with Chinese parts welded or fabricated into subassemblies, and paid China AD/CVD deposits on them. Those deposits are substantial: chassis from China are subject to a China-wide AD cash deposit rate of 177.05% and a CVD rate of 44.32%, for a combined rate of roughly 221%. No Chinese producer has a lower company-specific rate. Under Commerce’s original scope ruling, those duties applied to the full value of the finished chassis.
A Former Petitioner Challenges the Scope of Its Own Case
Pitts Enterprises, Inc. dba Dorsey Intermodal (“Pitts”), one of the U.S. producers that petitioned for the China orders, imported chassis made by THACO in Vietnam. In October 2022, acting on an allegation by the U.S. affiliate of the principal Chinese producer subject to the orders, U.S. Customs and Border Protection (“CBP”) initiated an Enforce and Protect Act (“EAPA”) investigation into whether Pitts was evading the orders. CBP issued an affirmative evasion determination in 2023, which Pitts has separately challenged at the CIT.
THACO manufactures finished chassis in Vietnam, welding and fabricating Chinese-origin axle and landing gear components into running gear and landing gear subassemblies and attaching them to chassis frames it produces from steel. Pitts imported the finished chassis. Pitts requested a scope ruling, and in January 2024, Commerce found the chassis in scope.
Commerce Adopts a New Theory After the First Remand
In October 2025, the CIT remanded that ruling. Commerce had reasoned that the Chinese components became subject merchandise when they were shipped to Vietnam for assembly into chassis. The court disagreed, holding that the orders’ coverage of components “entered” for assembly with a chassis refers to entry into the United States.
On remand, Commerce conceded that the Chinese components were not subject merchandise when shipped to Vietnam, because they had not entered the United States. It nonetheless found that THACO had imported “unfinished” running gear and landing gear subassemblies from China, and that welding them in Vietnam was the kind of third-country “processing” that, under the orders, does not remove merchandise from scope. On that basis, Commerce treated the subassemblies in the finished chassis as subject merchandise and limited duties to their value.
Court Rejects an “Unfinished Subassembly” Category
The court held that Commerce’s theory runs counter to the plain language of the orders. It identified eight places where the scope uses the word “unfinished” and found that, in each one, the adjective modifies “chassis,” not “subassembly.” The orders cover subassemblies “whether assembled or unassembled,” and provide that importing any listed subassembly “constitutes an unfinished chassis.” The court acknowledged that a chassis may be unfinished in numerous ways, and that an unassembled subassembly is itself an unfinished chassis. But the orders contain no separate category of “unfinished subassemblies,” and Commerce could not create one to reach Chinese parts incorporated into a non-subject chassis.
Court Finds Welding and Fabrication Are Not “Processing”
The court further held that, even if the orders covered unfinished subassemblies, the welding and fabrication performed in Vietnam would remove the merchandise from scope. The orders provide that processing “such as trimming, cutting, grinding, notching, punching, drilling, painting, coating, staining, finishing, assembly, or any other processing” in China or a third country does not remove a product from scope. The court reasoned that the listed operations are all non-transformative, and that operations going beyond processing logically remove otherwise subject merchandise from scope. Neither welding nor fabrication is on the list, and neither falls within “any other processing.” The court found support in the original investigation record. The petition, testimony at the U.S. International Trade Commission (“ITC”) hearing, and the ITC’s final determination all treated welding and fabricating subassemblies as the core of chassis production, distinct from bolting finished subassemblies together.
Decision Reaches Beyond Vietnamese Chassis
Although the case involved chassis from Vietnam, the court’s reasoning is not limited to Vietnam. It should apply equally to chassis produced in Mexico, Thailand, or any other country where Chinese components are welded or fabricated into subassemblies. Importers of those chassis, however, are not covered by the Pitts scope ruling itself and may need to take their own steps to obtain relief.
The new AD orders on chassis from Mexico, Thailand, and Vietnam and CVD orders on chassis from Mexico and Thailand, which Commerce issued in 2026, raise similar questions, because their scope language largely tracks the China orders, including the same third-country “processing” provision. Although Pitts does not control how those orders will be interpreted, the court’s reasoning may apply to them as well.
How This Decision May Affect Your Company
The companies most directly affected are U.S. importers of chassis made outside China that incorporate Chinese axle, running gear, or landing gear parts welded or fabricated into subassemblies there. Importers that paid AD or CVD duties under the new orders on chassis from Mexico, Thailand, or Vietnam may be in a similar position if those chassis were actually produced in another country, using components from those countries that were welded or fabricated there.
If the decision is upheld and becomes final, these importers may be entitled to recover the duties they paid. The decision, however, is not final. Commerce’s redetermination is due by January 5, 2027, and the government may appeal to the U.S. Court of Appeals for the Federal Circuit after final judgment.
Companies that imported chassis built in one country with components from China, Mexico, Thailand, or Vietnam that were welded or fabricated there should monitor this case closely. They should also review their entries, including liquidation dates, and consider options to preserve their ability to recover the duties they paid, such as timely protests of liquidated entries.