AD Petitioner Contests Commerce's Use of Quarterly Costs Methodology in AD Review
Antidumping petitioner Nucor Corp. argued last week that the Commerce Department failed to support its "reliance on quarterly costs" in calculating the cost of production for respondent Officine Tecnosider in the 2020-21 administrative review of the antidumping duty order on steel plate from Italy. Nucor said Commerce failed to address concerns raised by the Court of International Trade on the use of the quarterly costs methodology (Officine Tecnosider v. United States, CIT # 23-00001).
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The trade court last year remanded the use of this methodology after finding "shortcomings" in the agency's analysis (see 2409170068). The court said Commerce failed to explain why focusing solely on Italian sales is a reliable indicator of linkage for U.S. sales. On remand, the agency stuck with the methodology, explaining that it made sense despite having access to only one quarter of Officine Tecnosider's U.S. sales data (see 2501160082).
In its brief on the remand, Nucor first outlined Commerce's normal practice. The petitioner explained that the agency will ordinarily calculate an annual weighted-average cost covering the 12-month review period. Commerce will "deviate" from this practice only if a respondent's data shows that a respondent experienced a "significant change in the cost of manufacturing" during the review period and if the record shows that sales made during the shorter cost-averaging periods can be "reasonably linked" with the costs during the same shorter cost-averaging periods.
The analysis for this second condition compares the "trends of a respondent's costs against the trends" of their home market and U.S. market sales prices on a quarterly basis, the petitioner explained.
In this case, however, the agency didn't conduct its normal analysis, where it takes five control numbers (CONNUMs) from the U.S. market and five from the home market to find whether sales prices were "reasonably linked" with the cost of manufacturing (COM). The agency said that since the respondent made all its U.S. sales in the same quarter, it instead looked at the 10 most frequently sold CONNUMs in the home market but none from the U.S. market.
Nucor said this "explanation and analysis fails to address the concerns the Court highlighted, and thus fails to demonstrate the propriety of using the quarterly cost methodology." There's no data showing a "linkage between cost and U.S. sales price," and Commerce has failed to explain how its analysis of only home market sales is enough to "overcome this lack of data," the brief said.
The need to analyze cost-price links for "both markets before relying on the quarterly cost methodology" is clear from both "Commerce's practice and the dumping calculation itself," the petitioner said. Just as ordinary AD rate calculations require a comparison of sales in the U.S. and home markets, "the determination of trends in U.S. market and home markets sales to the COM requires an analysis of both markets," the brief said.
The need to consider both U.S. and home markets also falls within the "overarching purpose" of AD laws, which is to "provide a fair comparison between U.S. sales prices and prices in the home or comparison market for Commerce to reach an accurate dumping margin," Nucor said. Finding a sufficient link between cost and sale prices to justify departing from a normal methodology "despite finding that there is no evidence of linkage between cost and U.S. sales prices" cuts against the framework underlying the AD laws, the brief said.