CIT's Dictum on Subassemblies Provision Irrelevant for Scope Cases, US Says
The Court of International Trade's recent "dictum" on whether the Tariff Act of 1930 lets the Commerce Department impose antidumping duties and countervailing duties on an upstream product that's incorporated into a downstream product imported into the U.S. isn't relevant for adjudication of a pair of separate AD/CVD scope cases, the U.S. said (Wabtec Corporation v. U.S., CIT #s 23-00160, -00161).
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.
Responding to importer Wabtec's insistence that the court's recent ruling helps its case, the government said the dictum in Worldwide Door Components v. U.S. isn't relevant, since the argument wasn't raised by the parties in the Worldwide case nor decided by the U.S. Court of Appeals for the Federal Circuit. The issue was instead raised by the court "sua sponte after the Federal Circuit affirmed Commerce’s determination that a part of a subassembly containing subject and nonsubject components upon importation falls within the orders’ scope," the U.S. said.
In Worldwide, CIT Judge Timothy Stanceu suggested Commerce's "subassemblies provision" may violate the Tariff Act, since it allows for duties to be imposed against upstream products that aren't sold or imported in the U.S., which is a specific requirement of the Trade Act (see 2506260017). In Wabtec's cases, the company is contesting Commerce's scope decision on freight rail couplers, arguing that the agency can't impose duties on couplers, "the upstream component," that are "incorporated into downstream products that are in turn imported into the United States."
Wabtec said Stanceu's decision is highly relevant for its case (see 2506300012).
In response, the U.S. said Stanceu's ruling is "unsupported by Federal Circuit precedent addressing Commerce’s discretion in fashioning the scope of an order." The government cited Canadian Solar v. U.S., which upheld Commerce's scope determination on modules, laminates or panels made of solar cells "whether or not partially or fully assembled into other products, including building integrated materials."
"Accordingly, Commerce’s final determination in this case to include couplers within the scope of the order is lawful and supported by substantial evidence in the record of the investigation," the U.S. said.