Israeli Government Challenges ITC Injury Determination Regarding Brass Rods
The Israeli government moved for judgment May 9 in the Court of International Trade in its case challenging the International Trade Commission’s final injury determinations regarding brass rod antidumping and countervailing duty investigations. The commission failed to consider the impact of Israel’s conflict with the terrorist group Hamas on Israel’s sole brass rod manufacturer, it said (Government of Israel v. United States, CIT # 24-00197).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The conflict began a week after the end of the investigation period, Israel said. A third of producer Finkelstein Metals’ manufacturing employees were West Bank residents, it said, and weren’t allowed to go to work after Hamas’ attack.
But “[t]he majority opinion contained only a single passing reference to the Hamas war and did not address its effects on Israeli brass rod production,” it said.
The ITC was required to address the issue substantively both because it impacted Finkelstein’s ability to compete and because, more generally, it was a significant circumstance that arose prior to the commission’s vote. The commission is charged by statute to make “present material injury” determinations, not determinations based on a period of investigation, Israel said.
The foreign government also attacked the ITC’s volume analysis, saying the commission “improperly” found that only a “small volume of subject imports from Israel was significant” -- without cumulating the imports with those of any other country for the determination, as the U.S. and Israel have signed a free trade agreement. But the increase in Israeli brass rod imports during the investigation period was “minor” in both “absolute terms and relative to apparent U.S. consumption and domestic production,” it said. Finkelstein’s total U.S. sales were the equivalent of only a few days of sales by the domestic industry.
In doing so, the commission “read the word ‘significant’ out of the statute," it said. It added that the ITC has reached negative determinations under similar facts, including in another Israeli case regarding pipe fittings.
Israel also argued that the ITC wrongly adjusted the U.S. domestic industry’s prices. Two members of petitioner American Brass Rod Fair Trade Coalition sell brass rod to customers, then buy back “a significant majority” of the scrap created by the customer’s production of its downstream goods, it said. The petitioners buy that scrap back at above-market prices, “resulting in effectively a refund or discount to the price initially paid by U.S. customer for brass rod,” it said. This was a “critical aspect of purchasing decisions” made by end-use customers, it said, but wasn’t considered by the ITC.
If the buyback price “discounts” had been considered, most sales of Israeli brass rod were priced higher than domestic industry sales, it claimed.
And it argued that even if the opposite had occurred and Finkelstein had been underselling the domestic producers, that couldn’t have caused any U.S. price deflation or other economic harm. Prices went up during the period of investigation, and the record didn’t support an argument that they would have risen further if not for Finkelstein’s sale. Rather, it said, the ITC “relied on isolated data points” such as a “small” increase in the Israeli market share for brass rod during the investigation period.
And the domestic industry experienced other COVID-19-related production constraints during the period that were entirely unrelated to Israeli imports, but the ITC “disregarded” that evidence, it said.