What is a circumvention determination in U.S. trade law?

A circumvention determination means the U.S. Department of Commerce has found that a foreign producer modified a product to evade existing antidumping or countervailing duty orders. Commerce can extend those orders to cover the newly identified merchandise, often retroactively.

China Engine Imports Hit with Circumvention Ruling

The U.S. Department of Commerce has preliminarily determined that two specific vertical shaft engine models manufactured by Chongqing Zongshen General Power Machine Co., Ltd. are circumventing existing antidumping (AD) and countervailing duty (CVD) orders on small engines imported from China — meaning importers of these products may face significant retroactive duty liability.

If your business imports small gasoline engines — the kind used in lawn mowers, pressure washers, go-karts, or generators — this ruling demands your immediate attention. Here's what changed, what it means, and what you need to do right now.

What Is a Circumvention Finding, and Why Does It Matter?

A circumvention determination occurs when the U.S. Department of Commerce (Commerce) finds that an exporter has modified a product — often slightly — to avoid existing antidumping duty (AD) orders (tariffs imposed to counteract goods sold below fair market value) and countervailing duty (CVD) orders (tariffs that offset foreign government subsidies). Rather than creating a genuinely new product, the exporter is considered to have engineered around an existing trade remedy.

Circumvention findings are significant because they extend the reach of existing AD/CVD orders to cover the newly identified merchandise — often with retroactive effect. That means importers who believed they were buying duty-free or lower-duty engines may suddenly owe back duties on past shipments, in addition to higher duties going forward.

Commerce has authority to investigate circumvention under 19 U.S.C. § 1677j, which covers "later-developed merchandise" — products that didn't exist when the original order was issued but are sufficiently similar to fall within its scope.

What Exactly Did Commerce Find?

On May 18, 2026, Commerce published an affirmative preliminary determination in the Federal Register [Docket No. 2026-09911], concluding that two specific engine models produced by Chongqing Zongshen General Power Machine Co., Ltd. (Zongshen), a major Chinese engine manufacturer, constitute later-developed merchandise that circumvents existing orders.

Which Products Are Affected?

The two models named in the ruling are:

Model 5C65M0
Model BC70M0

Both are vertical shaft engines — meaning the crankshaft runs perpendicular to the ground, a design common in walk-behind lawn mowers and similar outdoor power equipment. They fall within the 99cc to 225cc displacement range covered by the original AD/CVD orders on certain vertical shaft engines and parts thereof from China.

The key legal finding: Commerce determined these models are "later-developed merchandise" — products introduced after the original orders were issued — that are sufficiently similar to covered products to fall within the scope of those orders. In other words, Zongshen is alleged to have introduced new model designations that functionally replicate covered engines without technically matching the original product descriptions.

Who Is Zongshen?

Chongqing Zongshen General Power Machine Co., Ltd. is one of China's largest small engine and power equipment manufacturers, producing engines used widely in outdoor power equipment, construction tools, and recreational vehicles. Their products are distributed globally, including through U.S. importers and distributors supplying hardware chains, online marketplaces, and OEM equipment brands.

Why Should Small Business Importers Care?

The Retroactive Duty Risk Is Real

Under U.S. trade law, when Commerce issues an affirmative circumvention determination — even a preliminary one — U.S. Customs and Border Protection (CBP) (the federal agency responsible for collecting duties at the border) is directed to suspend liquidation of affected entries. Liquidation is the final calculation and collection of duties owed on an import shipment.

Suspended liquidation means:

Past entries of the affected models are placed on hold
Cash deposits (upfront duty payments) may be required at the AD/CVD rates for new shipments going forward
If the final determination is also affirmative, retroactive duties can be assessed on those held entries

The existing AD/CVD orders on Chinese small vertical shaft engines carry substantial combined duty rates — often well above 50% in AD/CVD combined assessments for non-individually reviewed companies, though exact rates vary by exporter and review period. Importers should verify their specific rate exposure with a licensed customs broker.

You May Be Affected Even If You Don't Know It

Many small business importers purchase engines or engine-powered equipment through intermediaries — distributors, trading companies, or domestic wholesalers — without direct knowledge of the manufacturer or model number. If your supplier sources from Zongshen, you could be in the duty chain without realizing it.

Which Importers Are Most at Risk?

Businesses most likely to be affected include:

Lawn and garden equipment importers (mowers, tillers, cultivators)
Pressure washer and water pump distributors
Generator importers sourcing Chinese OEM engines
Go-kart and recreational vehicle parts suppliers
Hardware and home improvement retailers that private-label Chinese power equipment
E-commerce sellers sourcing outdoor power tools from Chinese manufacturers

If your products use engines in the 99cc–225cc range and your supply chain touches Chinese manufacturing — particularly Zongshen — you should treat this ruling as directly relevant.

What Is the Timeline?

Stage	Status
Preliminary Determination Published	May 18, 2026 ✅
Suspension of Liquidation Directed to CBP	Typically follows preliminary ruling
Public Comment Period	Usually 30 days from Federal Register publication
Final Determination	Typically within 200–365 days of initiation

Important: This is a preliminary determination. Commerce will issue a final determination after additional review, comment periods, and verification. However, the preliminary ruling is enough to trigger cash deposit requirements and suspended liquidation — so the financial impact begins now, not at the final ruling.

Importers who wish to comment or contest the preliminary findings should consult with a licensed customs attorney or trade counsel immediately. Comments must typically be submitted within 30 days of the Federal Register publication date (i.e., on or before approximately June 17, 2026).

What Should Importers Do Right Now?

Don't wait for the final determination to act. Here is a concrete action checklist:

✅ 1. Audit Your Supply Chain Immediately

Pull your import records for the past 12–24 months. Identify any shipments that included:

Vertical shaft engines from China
Zongshen-manufactured engines (look for manufacturer declarations on CBP entry documents)
Model numbers 5C65M0 or BC70M0 specifically

✅ 2. Check Your HTS Classification

Harmonized Tariff Schedule (HTS) codes (the 10-digit product classification numbers used by CBP to assess duties) for small engines typically fall under HTS Chapter 84 (specifically headings 8407 and related subheadings). Verify that your entries were classified correctly and that you understand what AD/CVD case numbers apply.

✅ 3. Contact Your Customs Broker or Trade Attorney

A licensed customs broker (a federally licensed agent who files import entries and advises on duties) or trade attorney can:

Pull your entry records and flag any potentially affected shipments
Calculate your potential retroactive liability
Advise on whether to submit comments to Commerce
Help you ensure future shipments are classified and deposited correctly

This article does not constitute legal advice. Always consult a licensed customs broker or attorney before making compliance decisions.

✅ 4. Notify Your Supply Chain Partners

Alert your suppliers and logistics partners about the preliminary ruling. Ask your Chinese suppliers directly whether they source engines from Zongshen and whether the model numbers in question appear in your products.

✅ 5. Consider Alternative Sourcing

If your business depends on these specific Zongshen models, now is the time to evaluate alternative suppliers — including non-Chinese manufacturers or Chinese manufacturers with established individual AD/CVD rates — to reduce future exposure.

✅ 6. Check Your Exposure with TariffCenter.AI

TariffCenter.AI provides real-time tariff lookup tools, AD/CVD order tracking, and business impact assessments to help importers quickly understand their duty exposure. Use our platform to check whether your product classifications and supplier profiles intersect with this or other active circumvention proceedings — before CBP comes to you first.

The Bigger Picture: Circumvention Enforcement Is Accelerating

This ruling is part of a broader pattern. Commerce has significantly ramped up circumvention investigations across product categories — from solar panels to steel to aluminum — as enforcement agencies close loopholes that allow Chinese exporters to evade existing trade orders through minor product modifications or transshipment.

For small business importers, the takeaway is clear: AD/CVD compliance can no longer be treated as a one-time exercise. As exporters adapt their products to evade orders, Commerce responds with circumvention inquiries that pull those products back into scope. Staying compliant requires ongoing monitoring.

Tariff rates, duty deposit requirements, and the scope of AD/CVD orders change frequently. Always verify current rates and applicability with CBP or a licensed customs professional before making sourcing or compliance decisions.

---FAQ--- Q: Which Zongshen engine models are covered by the May 2026 circumvention ruling? A: The preliminary ruling covers two models: 5C65M0 and BC70M0, both vertical shaft engines in the 99cc–225cc range produced by Chongqing Zongshen General Power Machine Co., Ltd. in China. ---END FAQ---

---FAQ--- Q: Does a preliminary circumvention determination require importers to pay duties immediately? A: Yes — a preliminary affirmative determination typically triggers suspended liquidation of affected entries and requires cash deposits at applicable AD/CVD rates on new shipments. Retroactive duties may be assessed if the final determination is also affirmative. ---END FAQ---

---FAQ--- Q: How do I know if my imported products are affected by this ruling? A: Review your import records for engines sourced from Zongshen, particularly models 5C65M0 and BC70M0. Check your HTS classifications under Chapter 84 and consult a licensed customs broker to assess your exposure. ---END FAQ---

---FAQ--- Q: Can I submit comments to Commerce about this preliminary determination? A: Yes. There is typically a 30-day public comment period following Federal Register publication. For this ruling (published May 18, 2026), comments would generally be due around June 17, 2026. Consult a trade attorney to submit comments. ---END FAQ---