CIT Says Commerce Properly Rejected CEP Offsets for Pipe Exporters
The Commerce Department didn't fail to notify exporter Hyundai Steel Co. about deficiencies in its quantitative analysis in an antidumping review and also properly denied constructed export price adjustments to both Hyundai and exporter Husteel Co., the Court of International Trade held on Jan. 15.
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The trade court previously remanded the 2019-20 AD review on circular welded non-alloy steel pipe from South Korea on the grounds that Commerce failed to tell Hyundai there were issues with its submissions and that the agency improperly granted Hyundai and Husteel CEP offsets (see 2308030038). On remand, the agency said neither respondent adequately showed their home market sales were at a more advanced level of trade than the level of trade for the constructed export price (see 2311010024).
Judge Timothy Reif first assessed whether Hyundai was given adequate notice of the deficiencies in its submissions, finding that the exporter had adequate notice regarding Commerce's response to the original submissions and also from the agency's supplementary questionnaire. The judge said "Hyundai cannot claim that it was not made aware of the deficiencies in its original submissions," since the agency said neither respondent gave an adequate analysis showing how the expenses assigned to the sales made at different claimed levels of trade impacted price comparability.
Next, the agency's "supplemental questionnaire to Hyundai adequately reiterated these deficiencies and specifically identified the information Hyundai needed to submit to correct such deficiencies," the decision said. While Hyundai said Commerce was obligated under 19 U.S.C. Section 1677m(d) to tell Hyundai of flaws in its quantitative analysis submitted as part of its supplemental response, the court said Hyundai "misunderstands the requirements of § 1677m(d)."
On remand, Commerce didn't say Hyundai failed to comply with Commerce's request, but "merely that Hyundai's quantitative analysis did not allow Commerce to 'find home market sales at a different LOT and more advanced stage of distribution than the CEP LOT.'" What Hyundai wants is the chance to amend its analysis "in a manner more to Commerce's liking, with the benefit of having Commerce's reasoning in the Remand Results before it. Section 1677m(d) provides for no such opportunity."
Reif also upheld the decision to reject both CEP offsets. Regarding Hyundai, the agency said the company's analysis, "which calculated intensities of different selling functions based on the number of employees" didn't consider differences in size between the two markets. Husteel, meanwhile, had faults in its analysis, which looked at "the amount spent on each selling activity relative to the total domestic" indirect selling expense and U.S. indirect selling expense to find "intensities of the different selling functions."
The agency said both respondents' analyses were flawed, finding that it needed to extend the analyses to also include a per-unit analysis based on sales volume to get a "valid comparison." Commerce's per-unit analysis, meanwhile, said that the home market level of trade is not at a more advanced stage of distribution than the level of the CEP for either respondent.
"There is nothing in Commerce’s choice of methodology for analyzing differences in selling activities that conflicts with the statutory or regulatory requirements," the court said. "Given the minimal statutory and regulatory guidance, Commerce determined reasonably that a per-unit analysis was necessary to adjust for market size differences to compare more accurately differences in levels of trade between markets."
(Wheatland Tube v. United States, Slip Op. 25-5, CIT # 22-00160, dated 01/15/25; Judge: Timothy Reif; Attorneys: Nicholas Birch of Schagrin Associates for plaintiff Wheatland Tube; Robert Kiepura for defendant U.S. government; Jarrod Goldfeder of Trade Pacific for defendant-intervenor Hyundai Steel Co.; Kang Woo Lee of Arnold & Porter for defendant-intervenor Nexteel Co.; Eugene Degnan of Morris Manning for defendant-intervenor Husteel Co.)