US Rail Industry Rocked by Allegations of Tariff Circumvention

WASHINGTON, DC – March 10, 2026 – The American freight rail industry is facing a new front in its ongoing trade battles, as petitions were filed today with the U.S. Department of Commerce alleging that a major domestic railcar manufacturer is circumventing trade duties imposed on components from China and Mexico. The filings, submitted by the law firm Buchanan Ingersoll & Rooney on behalf of historic manufacturer McConway & Torley LLC, claim that The Greenbrier Companies, Inc. is sidestepping antidumping (AD) and countervailing duty (CVD) orders on freight rail couplers (FRCs).

This move escalates a long-simmering conflict over fair trade in the rail supply sector and initiates a formal process that could lead to a year-long federal investigation. The allegations suggest that despite duties being in place to protect U.S. manufacturers, foreign-made components are still entering the domestic market unfairly, threatening the integrity of U.S. trade remedy laws. The Commerce Department now has 30 to 45 days to decide whether to launch a full-scale inquiry into the matter, with a final decision not expected until the first half of 2027.

The Heart of the Allegation

The dispute centers on freight rail couplers, the critical steel structures that connect rail cars. In 2023, following petitions from the Coalition of Freight Coupler Producers, which includes McConway & Torley, the U.S. government took decisive action to shield the domestic market. Antidumping and countervailing duty orders were finalized on FRCs from China in July 2023, followed by an antidumping order on FRCs from Mexico in November 2023. These orders were designed to offset unfair pricing and foreign government subsidies that were found to be materially injuring the U.S. industry.

Today’s petitions allege these protective measures are being systematically bypassed. Circumvention, as defined under U.S. trade law, occurs when importers alter their practices to evade duties. A common method, and one suggested by the circumstances, involves shipping components from a country subject to duties (like China) to a third country (like Mexico) for minor assembly or alteration before they are imported into the United States. This effectively masks the product's true origin and allows it to enter the U.S. duty-free.

While the petition's specific evidence remains confidential, the implication points toward a shift in trade patterns following the 2023 orders. The Greenbrier Companies, a leading global manufacturer of railcars with significant operations in Mexico, including three major manufacturing facilities, is named in the filing. This extensive presence in Mexico, a country now subject to FRC duties itself, places the company at the epicenter of the circumvention claims.

A Battle of Industry Titans

The conflict pits two very different players in the American rail industry against each other. On one side is the petitioner, McConway & Torley LLC. With roots stretching back to 1869 in Pittsburgh, Pennsylvania, the company represents the heart of American heavy manufacturing. As a key developer of the automatic coupler standard in the 19th century and a member of the modern FerroWorks manufacturing group, McConway & Torley has long advocated for the protection of domestic production and has been a primary mover in the trade cases against unfairly traded imports.

On the other side is The Greenbrier Companies, a publicly traded, multi-billion-dollar transportation manufacturing giant. With a global footprint that includes facilities across North America and Europe, Greenbrier is a dominant force in the production of new railcars. Its business model relies on a complex international supply chain to build everything from tank cars to auto racks. For a high-volume manufacturer like Greenbrier, the cost of components like freight rail couplers is a significant factor in its overall competitiveness.

The allegations create a direct conflict between a company focused on domestic component manufacturing and a larger firm that assembles finished products using a global sourcing strategy. The outcome of the Commerce Department's inquiry could have profound effects on the supply chain strategies and competitive balance between these and other companies in the sector.

Protecting the 'Level Playing Field'

The core purpose of AD/CVD laws is to ensure that American manufacturers are not harmed by foreign competitors who sell goods at less than fair value or benefit from government subsidies. These trade remedies are one of the few tools available to re-establish what proponents call a “level playing field.”

"Circumvention of existing AD and CVD orders undermines the effectiveness of U.S. trade laws," said Daniel Pickard, lead counsel for the petitioners from Buchanan Ingersoll & Rooney. "The domestic industry is requesting a full and fair investigation into these allegations to uphold the integrity of our trade laws and ensure that duties are properly enforced so that the American industry is able to compete on a level playing field."

The economic stakes are substantial. In 2021, prior to the imposition of duties, imports from China and Mexico accounted for approximately 75% of all freight rail couplers brought into the United States, representing a combined value of over $55 million. If these duties are being successfully evaded, the intended relief for domestic producers like McConway & Torley is nullified, leaving them to compete against the very same unfairly priced products the orders were meant to stop. This can lead to continued price suppression, lost sales, and ultimately, a threat to American jobs and manufacturing capacity.

The Road Ahead: A Federal Probe

With the petitions now filed, the Commerce Department's Enforcement and Compliance unit will begin its review. Under Section 781 of the Tariff Act of 1930, the department has a well-defined, if lengthy, process for handling such inquiries. The first milestone will be the decision to initiate an investigation, expected by mid-April.

If an inquiry is initiated, the department will gather information from interested parties, potentially issuing detailed questionnaires and conducting on-site verifications. A preliminary determination is expected within 150 days of initiation. Should the preliminary finding be affirmative, Commerce could order the suspension of customs processing for incoming goods and require cash deposits for estimated duties, which could even be applied retroactively.

This process is not without precedent. The department has recently conducted high-profile circumvention inquiries, including a notable case involving solar cells from China that were being finished in Southeast Asian countries to avoid U.S. tariffs. In that case, Commerce found that circumvention was indeed occurring. The final determination in the freight rail coupler case is statutorily due within 300 days of initiation, though complex cases can be extended to a full year. All parties are now watching closely as the Department of Commerce prepares to make its first move in a case that could reshape the competitive landscape of the U.S. rail supply industry.