Wind Tower Exporter's Production Costs Weren't Impacted by Subsequent Shutdown, US Says

The exporter’s first case disputes the Commerce Department’s refusal to grant CS Wind an entered value adjustment and its decision to use Singaporean electricity costs, not Turkish, as surrogate cost information in a countervailing duty review (see 2405030050). Its second case alleges Commerce should have adjusted its manufacturing costs to account for a production stoppage that lasted most of the review period and attacks two other surrogates in an antidumping duty review (see 2502100041).

Responding to the exporter’s motion for judgment in its AD case, the U.S. said Commerce was right to refuse the requested adjustment because the exporter’s plant shutdown didn’t impact the cost of merchandise produced pre-shutdown.

CS Wind, it said, “concedes that the costs at issue are actual production costs.” All Commerce did was refuse to reduce these actual costs of producing wind towers, recorded in CS Wind’s own books, to adjust for later costs the exporter incurred after stopping production, it said.

The exporter argued that a law allowing a cost adjustment for start-up production costs indicates the possibility of a similar adjustment for its own shutdown costs, but the law it cited didn’t mention shutdown costs, the U.S. said. If Congress had meant to provide for a shutdown costs adjustment, it would have, it said.

The government also defended Commerce’s selection of Malaysian steel pipe producers Alpine Pipe and Mycron as surrogates for CS Wind’s constructed value profit ratio. Commerce, in choosing a surrogate, made its choice after considering the financial information of the two companies, the two non-Malaysian companies Arabian Pipe and Vallourec, CS Wind itself and a few others.

CS Wind’s financial records weren’t usable because the exporter sold solely to a non-Malaysian affiliate, meaning its sales weren’t at arms length and didn’t represent its home market, it said. Meanwhile, Arabian Pipe and Vallourec weren’t Malaysian, and Vallourec hadn’t been profitable in 2022.

Commerce had determined earlier in the proceeding that Alpine Pipe produced comparable merchandise. Even if 21% of its sales were made to related parties, that was still better than CS Wind itself, the U.S. said. And Commerce found that holding company Mycron’s statements reflected the activities undertaken by three of Mycron’s subsidiaries that produced comparable merchandise, “not the parent company’s investment activities.”

In CS Wind’s CVD case, the Wind Tower Trade Coalition said the exporter wasn’t granted an entered value adjustment due to “incurable deficiencies” that meant it failed one of six required factors. The petitioner also said that not all of its products had been sold at a markup from its affiliate.

CS Wind failed the statutory test because it couldn’t show that its U.S. sales’ commercial invoices established its products’ value upon entry, the Wind Tower Trade Coalition said. In particular, “there were uncurable discrepancies between the documentation,” it said. It also claimed the exporter didn’t provide Form 7501s or alternatives upon request for two of its four sales.

The exporter also couldn’t demonstrate that “the price on which the subsidy is based differs from the U.S. invoiced price (and is marked up),” it said.

The petitioner also supported Commerce's selection of Singaporean electricity rates as a cost benchmark. The rates were being used as a Tier 3 benchmark, not a Tier 1 or 2, meaning Commerce wasn’t required to conduct a comparability analysis for Singapore and Malaysia, it said.

This particular issue also involves a utility benchmark, necessitating that Commerce consider “whether the country in question and country or region for which the surrogate prices are derived are ‘interconnected,’” meaning the surrogate country and country under investigation must both be in same market. This isn’t true of Malaysia and CS Wind’s preferred surrogate, Turkey, it said, but is true of Malaysia and Singapore.