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With CIT Ruling, Chinese Flooring Respondents' Separate Rate AD Jumps From Zero to Near 43%

The Court of International Trade on Feb. 8, in a case brought by domestic petitioners, sustained the Commerce Department’s finding that a Chinese wood flooring exporter that had refused to participate as a 2018-2019 antidumping duty review’s mandatory respondent was still eligible for separate rate status. But the court's decision to allow Commerce to use adverse facts available against the exporter meant the review’s non-individually investigated separate rate respondents saw their rates jump from zero percent to 42.57%.

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The department reached its finding under protest (see 2308090032). Judge M. Miller Baker ordered the change after he found Commerce treated the exporter, Fusong Jinglong Group, differently than other similarly situated companies. He also said the department had not addressed Jinlong’s separate rate certification on the merits.

“Commerce viewed it as inadequate ... solely because [the company] had the bad luck to be chosen as [a] mandatory respondent and regardless of whether the certification would have been adequate had the company not been so chosen,” Baker said of Jinlong’s application.

The judge described the entire case as a “proxy war” waged by domestic petitioners against the de minimis rate that non-individually investigated separate rate respondents had first received in that 2019-2019 AD review. Their initial rate was based on the zero percent dumping margin Commerce calculated for the sole mandatory respondent that remained after Jinlong backed out.

Those separate rate respondents will now see their rate raised to 42.57% under Commerce’s remand results, calculated using the expected method. Baker ruled against their arguments that Commerce should choose a different rate, agreeing with the government that those arguments simply critiqued the expected method itself.

“Despite raising several theoretical policy concerns, they fail to address Congress’s mandate (in the market-economy context) that Commerce apply the methodology used here where all mandatory respondents eligible for a separate rate receive duties that are zero, de minimis, or based entirely on facts otherwise available,” he said.

Maureen Thorson, an attorney for American Manufacturers of Multilayered Wood Flooring, said domestic petitioners welcomed the ruling.

"The domestic multilayered wood flooring industry is encouraged by today’s decision, which corrects a serious flaw in the margin that the Commerce Department originally assigned to companies accounting for a substantial percentage of Chinese exports in 2018-2019," she said. "Prior to the Court’s ruling, these Chinese wood flooring producers were perversely benefiting from another Chinese company’s decision to drop out of the Commerce proceeding. In our view, the Court properly corrected this error, allowing Commerce to calculate more accurate results."

(American Manufacturers of Multilayered Wood Flooring v. U.S., Slip Op. 24-13, CIT # 21-00595, dated 2/8/2024; Judge: M. Miller Baker; Attorneys: Timothy C. Brightbill of Wiley Rein LLP for plaintiff American Manufacturers of Multilayered Wood Flooring; Brian M. Boynton for defendant U.S. government; and Mark Ludwikowski of Clark Hill PLC for defendant-intervenors Jiangsu Guyu International Trading Co., et al.)