Domestic Producer Raises Several Issues With Thai Boltless Steel Shelves AD Investigation
In a Dec. 3 motion for judgment before the Court of International Trade, domestic producer Edsal Manufacturing again (see 2407120060) said that the Commerce Department should have used the more comparable surrogate it suggested in an antidumping duty investigation on boltless steel shelves from Thailand (Edsal Manufacturing Co. v. U.S., CIT # 24-00108).
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Edsal argued Commerce shouldn’t have rejected its preferred surrogate, Sahamitr Pressure Container, just because the manufacturer’s financial statements indicated it benefited from countervailable subsidies.
“Contrary to the Department's determination, evidence of countervailable subsidies does not automatically render financial statements unusable,” it said.
Rather, it said, the relevant law lets Commerce calculate constructed value profit using any “reasonable method.” And it would have been reasonable in this situation to use Sahamitr’s information because “the subsidies had minimal, if any, impact on Sahamitr's profit data,” it said.
It noted that Commerce had done so in a prior AD investigation on steel nails from Oman. CIT remanded that case for further explanation of Commerce’s surrogate selection, and the department said in its remand determination that “a surrogate company’s receipt of countervailable subsidies ‘does not preclude the use of that company’s financial statements for the calculation of CV profit,’” Edsal said, and its conclusion was sustained by the trade court.
Acknowledging that the U.S. Court of Appeals for the Federal Circuit had vacated this portion of Commerce’s remand redetermination, Edsal still pointed out that “CAFC did not hold that the presence of countervailable subsidies necessarily renders a source unsuitable for the Department's CV profit calculations.” Instead, CAFC found it “relevant but not dispositive” of a surrogate’s suitability, the producer said.
Eventually, CAFC sustained Commerce’s use of a different surrogate that also received countervailable subsidies, it said.
Edsal also said that the department wrongly claimed in its final determination that Sahamitr didn’t produce merchandise comparable to that being reviewed -- in doing so, Commerce ignored the fact Sahamitr’s products are in fact similar to the subject merchandise, instead choosing a surrogate that produces products which are “entirely different,” it said.
Sahamitr produces steel cylinders, which, though not identical to the subject merchandise, are comparable, the producer claimed. It said that Commerce has found steel cylinders to be sufficiently comparable to utility scale wind towers.
“If the Department could find steel pipe to be sufficiently similar to utility scale wind towers, then Sahamitr's steel cylinders should be deemed sufficiently comparable to steel shelving for the purpose of this case,” it said.
Both products are created using the same “major input,” steel coils, and they “include the same manufacturing steps,” it said. In comparison, it said, PNS’ products “reflect a wide variety of non-comparable merchandise,” including “wooden furniture” and “general equipment.”
In the alternative, Commerce should have averaged the financial data it received from Sahamitr and the selected surrogate, PNS, Edsal argued. This would actually have been consistent with the department’s “preference and practice of relying on multiple financial statements” from surrogates during AD investigations. And it would have resulted in a more accurate constructed value calculation, the producer said.
Edsal also claimed that Commerce used the wrong dates of sale for SMT U.S., a mandatory respondent. The department uses the dates at which the material terms of a sale between an exporter and its U.S. customers are finalized. But this occurred when SMT and its customers signed sales contracts, it said, not when, as Commerce had determined, the customers were invoiced.
Commerce based its decision on the fact that the sales contracts don’t include “the final destination of the order,” but “final destination” isn’t a material term of the sale, it said.
And, finally, it said the department calculated the wrong total manufacturing cost for both mandatory respondents, claiming both had reported “understated” figures to Commerce. The department should have adjusted those figures “to align with actual costs recorded in SMT's normal books and records and audited financial statements,” it said.