US Says Commerce Can't Ignore Data of Linkage Between Respondent's Costs, Sales Prices
The U.S. defended its use of its quarterly cost methodology in calculating exporter Officine Tecnosider's antidumping duty rate in the 2020-21 administrative review of the AD order on steel plate from Italy, arguing that petitioner Nucor Corp.'s claims to the contrary fail to show that it's the "one and only" reasonable outcome. Submitting a brief on March 19 in defense of its remand results, Commerce said it wasn't free to ignore evidence of a link between the respondent's costs and sales prices during the review period (Officine Tecnosider v. United States, CIT # 23-00001).
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The Court of International Trade last year remanded the use of this methodology, which saw Commerce rely on quarterly costs in calculating Officine Tecnosider's cost of production, 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).
Challenging the move on remand, petitioner Nucor outlined Commerce's normal practice, explaining that the agency will ordinarily calculate an annual weighted-average cost covering the 12-month review period (see 2502270050). 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. Nucor said that, here, 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 analysis fails to answer two questions raised by the court: why Commerce believes home market sales data alone lets it come to a conclusion on whether sales prices are "reasonably linked" to the cost of production and why whatever test the agency uses can be "trusted to produce reliable results."
In response, Commerce said it addressed the petitioner's concerns by explaining that the respondent's U.S. sales data couldn't indicate whether linkage existed between its costs and sales prices during the review period. There's only "one quarter of U.S. sales data," and Commerce wasn't "required to use or prioritize this inconclusive evidence over record evidence of linkage in the home market prices," the brief said.
The government said Nucor "disagrees with Commerce's reliance" on Officine Tecnosider's home market information, "which is the only information on the record that can reasonably demonstrate whether there is any linkage." Commerce agrees that under its normal analysis, it would have looked at the top five CONNUMs sold by the respondent in the U.S. for correlation between quarterly sales prices and quarterly costs, but the data didn't permit such review, the government said.
"This does not mean, however, that Commerce can or should ignore record evidence demonstrating linkage," the brief said. "On the contrary, Commerce must base its determination on the record as a whole."