CIT Upholds Commerce's Decision to Drop PMS Finding in Steel Pipes and Tubes AD Review Case
The Commerce Department properly dropped its finding that a particular market situation existed in India for hot-rolled coil steel, the Court of International Trade ruled in an Oct. 24 opinion. In its second remand results over the issue, Commerce conceded it was unable to further explain how the market phenomena affected hot-rolled coil costs or "how those phenomena were unique to India," dropping its PMS finding and subsequent PMS adjustment under respectful protest. Judge Claire Kelly said this was backed by substantial evidence.
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The case concerns the 2017-2018 administrative review of the antidumping duty order on welded carbon steel standard pipes and tubes from India in which Garg Tube Export served as a mandatory respondent. Garg brought the case to contest Commerce's PMS adjustment for hot-rolled coil, a key input for steel standard pipes and tubes, and application of adverse facts available over the non-cooperation of an unaffiliated supplier.
In the case's first opinion, Kelly remanded the PMS adjustment and use of partial AFA (see 2107210065). On remand, Commerce switched its use of partial AFA to neutral facts available given that Garg didn't have the market power to make the unaffiliated supplier cooperate -- a position uncontested by all parties. The agency also dropped its PMS adjustment to the sales-below-cost test. Kelly sustained these positions but ruled against Commerce's continued position that a PMS existed in India.
Commerce determined a PMS existed for hot-rolled coil in India due to global steel overcapacity, the Indian government's trade interventions and Garg's nonpayment of antidumping and safeguard duties on hot-rolled coil imports. In the case's second opinion, the judge said that in doing so, Commerce failed to show how these market phenomena gave rise to a unique set of facts distorting the cost of materials or other processing such that the respondent's cost of production isn't within the normal course of trade (see 2203230018). On remand, Commerce dropped its position that a PMS existed for hot-rolled coil in India (see 2206090067).
"We believe that the Judge’s decision correctly applies U.S. law to the facts in this case and we hope that in future cases involving similar important issues (i.e., application of adverse facts available (AFA) when unaffiliated vendors do not submit cost information and allegations of the existence of a particular market situation (PMS)), the DOC will follow this precedent," said Ned Marshak, counsel for Garg, in an email.
The only party to contest this move was AD petitioner Nucor Tubular Products. The petitioner said Commerce's prior finding was legal, urging the agency to further explain its finding. Commerce, though, "concedes it has no further explanation to offer," the judge said. Nucor also argued that Commerce's regression methodology "independently demonstrates the existence of a PMS," and that this methodology shows both that a PMS exists for individual producers and distorts the costs of production while also showing what the costs would be in any country without a PMS. "Commerce’s characterization of its chosen regression methodology addresses this argument succinctly, acknowledging that the regression model 'is not itself a ‘unique market phenomenon’ that would, on its own, support a PMS determination,'" the judge said.
(Garg Tube Export v. U.S., Slip Op. 22-120, CIT #20-00026, dated 10/24/22, Judge Claire Kelly. Attorneys: Ned Marshak of Grunfeld Desiderio for plaintiffs Garg Tube Export and Garg Tube Ltd.; Robert Kiepura for defendant U.S. government; Robert DeFrancesco of Wiley for defendant-intervenor Nucor)