Trailer makers clash over proposed import duties

Hyundai Translead is one of the trailer manufacturers at the center of the fight. (TT File Photo)

A fight over trailer imports from Canada, China and Mexico may hinge on a fundamental question: Did unfairly priced foreign shipments hurt U.S. manufacturers, or are the Great Freight Recession and an inventory glut to blame for damaging the sector?

These overarching questions were scrutinized during an Aug. 27 hearing before the International Trade Commission, with manufacturers on both sides of the debate represented. The answers could determine whether exporters of dry and refrigerated van trailers and trailer subassemblies, including Hyundai Translead and Vanguard, face antidumping and countervailing duties to sell into the U.S. market.

The ITC is weighing whether imports between Oct. 1, 2024, and Sept. 30, 2025, materially injured domestic manufacturers. If the agency rules in favor of U.S. producers, exporters from Canada, China and Mexico could face new trade penalties.

At the hearing, commissioners pressed both sides on the causes of the industry’s prolonged downturn. Commissioner David Foley queried the impact of the Great Freight Recession on trailer demand and manufacturers, while Chairman Brett Doyle questioned competing claims about oversupply, inventory levels and the role imports played in market imbalances.

The American Trailer Manufacturers Coalition argued imports flooded the market at unfairly low prices through subsidization, dumping and excess inventory. Attorneys and witnesses representing the coalition contended import volumes exceeded the entirety of U.S. production and distorted the market through predatory pricing.

“This is not competition. This is coercion by pricing,” Wabash CEO Brent Yeagy told the panel.

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Wabash CEO Brent Yeagy, pictured at an industry show, said at the hearing, “This is not competition. This is coercion by pricing.” (TT File Photo)

Yeagy and executives from fellow coalition member Stoughton Trailers said their order books strengthened after the ITC issued a preliminary determination earlier this year. Customers who had shifted their purchase dollars elsewhere began returning, they said, offering evidence that domestic manufacturers can compete when imports no longer benefit from alleged unfair trade practices.

“We’re already seeing what a fair market can look like. Customers who walked away are coming back,” Yeagy said, adding that some customers told Wabash they would cancel other orders if preliminary duties are lifted. The broader freight recovery also has boosted demand. During a July 29 earnings call, Yeagy told investors that improving freight conditions were fueling a rebound in trailer orders at a pace he had not seen in four decades.

Opponents of the duties argued the downturn reflected freight market conditions rather than an influx of unfairly priced imports.

“The idea that this historic slowdown was driven by customers stocking up on unneeded, low-priced imports is not only false, it’s offensive. Our customers operate sophisticated businesses making disciplined capital allocation decisions under difficult operating conditions. They purchase based on their needs and their customer needs, not on emotion,” Hyundai Translead CEO Sean Kenney told the commission.

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Hyundai Translead CEO Sean Kenney, pictured at an industry show, said at the hearing, "The idea that this historic slowdown was driven by customers stocking up on unneeded, low-priced imports is not only false, it’s offensive." (Karen Foote/American Trucking Associations)

ABF Freight Vice President of Fleet Services Don Davis agreed, telling commissioners that trailer purchases involve factors such as capital plans, equipment specifications and delivery timelines in addition to price.

“What makes sense for ABF’s business is not just a matter of who has the lowest price; it’s a matter of what we can support with our capital plan, who can meet our spec, and who can provide that spec in time, among other factors,” Davis said. “Anyone who tells you otherwise or who insists that it all comes down to only price is simply not providing an accurate picture of this market.”

Less-than-truckload carrier ABF is a unit of ArcBest, which ranks No. 14 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. ABF ranks No. 7 among LTL carriers and purchases between 1,000 and 2,000 trailers annually.

Utility Trailer Manufacturing, meanwhile, urged the ITC to reject the petition, arguing that combining dry vans and refrigerated trailers in a single trade case was illogical because the products serve distinct functions.

“Dry vans can never be used to transport goods requiring refrigerated temperature control, while insulated trailers with refrigeration units and evaporators would very rarely be an acceptable or economical solution for transporting ordinary merchandise,” said John Magnus of TradeWins, the law firm representing Utility. “No customer could confuse these products or mix up their usage.”

The Department of Commerce already has determined antidumping duties are warranted on trailer imports from Canada, China and Mexico. Commerce also found countervailing duties are appropriate for Chinese and Mexican exporters.

Commerce defines dumping as when a foreign producer sells a product in the U.S. at a price that is below that producer’s sales price in the country of origin or at a price that is lower than the cost of production. The difference between the price in the foreign market and the price in the U.S. market is called the dumping margin. The agency noted that unless the conduct falls within the legal definition of dumping as specified in U.S. law, a foreign producer selling imports at prices below those of American products is not necessarily dumping.

At the beginning of August, Canadian manufacturers including Di-Mond Sales were assigned preliminary dumping margins of 4.29%. Utility’s Mexican operations and Hyundai Translead’s Mexican unit were assigned margins of 3.21% and 10.19%, respectively. Commerce determines whether dumping or subsidization is occurring and calculates the applicable margins. The ITC separately determines whether the imports materially injured or threaten to materially injure the domestic industry. Final trade orders can take effect only if both agencies reach affirmative determinations.

A timeline for the ITC’s final decision has not been announced.

In May, the ITC ruled in favor of a petition led by Stoughton seeking antidumping and countervailing duties on Mexican intermodal chassis imports.

Per U.S. Customs and Border Protection, dumping occurs when a foreign producer or exporter sells a product in the U.S. at a price that is below so-called normal value. Normal value may be the price at which the foreign producer sells the merchandise in its own domestic market or a third-country market, or may be a constructed value based on its production costs plus an amount for profit.