CIT Judge Calls for Future Litigation on Scope of Commerce's Subassemblies Provision

Stanceu said the AD and CVD statutes could be read to preclude the imposition of duties on products that aren't sold or offered for sale in the U.S. but "instead are upstream components in the merchandise that actually is imported and sold," as is currently the case with the subassemblies provision. However, the judge said that since this argument wasn't made by the parties before him, such a claim shall be made for future cases.

The decisions arose in cases on a scope decision in which the Commerce Department initially held that door thresholds, which had an aluminum extrusion as a component part, imported by Worldwide Door Components and Columbia Aluminum Products were subject to the AD/CVD on aluminum extrusions from China. Following rounds of litigation before CIT and the U.S. Court of Appeals for the Federal Circuit, the appellate court told the trade court to reinstate Commerce's decision made in its first remand before CIT that included the door thresholds' aluminum extrusion component in the scope of the orders (see 2410080046).

At odds in the cases was the orders' provision on subassemblies and the "finished merchandise" exclusion. The subassemblies provision includes the "aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies" in the orders, while the finished merchandise excludes "finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry."

Stanceu said "absurd results" could flow from the overlap between these two provisions, especially since one of the exemplars for goods that qualify for the finished goods exclusion also falls under Commerce's broad definition of the term "subassemblies." Acknowledging this overlap but ultimately ignoring it, the Federal Circuit categorically ruled that "subassemblies and finished merchandise are mutually exclusive categories for the purpose of the Orders.”

Since Commerce found that the importers' door thresholds are subassemblies and subject to the orders, there was no need to see if they qualified for the finished merchandise exclusion.

Effectuating the appellate court's decision, Stanceu said the issue isn't entirely settled and paved the way for future litigation. The judge said "the problem persists that the Department’s current interpretation of the subassemblies provision can lead to 'unreasonable' and 'absurd' results," since a "seemingly infinite variety of imported, assembled products may contain an 'aluminum extrusion' component yet be designed to be incorporated into a larger downstream product after importation."

It's not "reasonable to expect that" every such component "would have been sold separately to the importer, who even may be unaware of the presence of the component." Not only can this lead to absurd results, it can "generate circumstances incapable of administration from a customs standpoint," the judge said.

Stanceu suggested a path forward through the existing AD/CVD laws. In particular, the judge cited Sections 731 and 701(a) of the Tariff Act itself. Section 731 imposes AD on a "class or kind of foreign merchandise" that's being, or is likely to be, "sold in the United States at less than its fair value." Section 701(a), meanwhile, imposes CVD on "a class or kind of merchandise imported, or sold (or likely to be sold) for importation, into the United States."

The judge said these laws are "directed to 'merchandise' that is considered to be unfairly traded, as a result of dumping or a countervailable subsidy, upon being sold, or offered for sale, for importation into the United States." AD/CVD are "remedial" in that they are an attempt to remedy "the unfair prices at which the imported merchandise is sold," yet Commerce's current read of the orders can results in AD/CVD on "products that are not sold or offered for sale in the United States but instead are upstream components in the merchandise that actually is imported and sold."

The court said it's "unaware of Tariff Act provisions that expressly authorize Commerce to structure or apply an antidumping or countervailing duty order in this way."

Here, Commerce's interpretation of the subassemblies provision will lead to AD/CVD on an "upstream, incorporated component," the aluminum extrusion component, of the merchandise that was imported and sold, the completed door threshold, "which is not an 'aluminum extrusion' as defined in the Orders," Stanceu said. But since neither importer raised this argument, Stanceu said he can't simply make it law, yet clarity on this point is needed.

(Worldwide Door Components v. U.S., Slip Op. 25-80, CIT # 19-00012, dated 06/25/25; Judge: Timothy Stanceu; Attorneys: John Foote of Kelley Drye for plaintiff Worldwide Door Components; Aimee Lee for defendant U.S. government; Robert DeFrancesco of Wiley Rein for defendant-intervenors Aluminum Extrusions Fair Trade Committee and Endura Products)

(Columbia Aluminum Products v. U.S., Slip Op. 25-81, CIT # 19-00013, dated 06/25/25; Judge: Timothy Stanceu; Attorneys: Peter Koenig of Squire Patton for plaintiff Columbia Aluminum Products; Aimee Lee for defendant U.S. government; Robert DeFrancesco of Wiley Rein for defendant-intervenors Aluminum Extrusions Fair Trade Committee and Endura Products)