Commerce Adds Respondent to Wood Flooring CVD Review on Remand at CIT
The Commerce Department on Aug. 8 calculated an individual countervailing duty rate for exporter Jiangsu Senmao Bamboo and Wood Industry Co. on remand in a case on the administrative review of the CVD order on multilayered wood flooring from China for the 2017 review period. Commerce gave Jiangsu Senmao a 2.4% CVD rate in response to an instruction from the Court of International Trade to individually review the respondent (Jiangsu Senmao Bamboo and Wood Industry Co. v. United States, CIT # 20-03885).
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Accordingly, the agency recalculated the non-individually examined respondents' rate to 10.02%.
Elsewhere in the remand, Commerce agreed to drop data under Harmonized System code 4412.99 from its benchmark calculation for the provision of subsidized plywood program. However, the agency stuck with its benchmark calculation for the provision of subsidized veneers program.
In April, the trade court sent back the review after finding Commerce erred in picking just one mandatory respondent (see 2504010073). On remand, the agency calculated an individual rate for Jiangsu Senmao, given that it's one of the two exporters "accounting for the largest volume of subject merchandise into the U.S. during the" review period.
CIT also sent back the use of HS 4412.99 data in the benchmark calculation for the subsidized plywood program. Exporter Baroque Timber challenged the use of the data on the grounds that it wholly consists of products the company didn't purchase. HS category 4412 covers plywood, veneered panels and similar laminated wood.
Commerce initially said Baroque failed to offer enough evidence showing that imports under 4412.99 are categorized as laminated wood of the type not used in wood flooring and said all plywood is a laminate structure. The court rejected these conclusions, finding the agency's reasoning to be "conclusory" and missing a discussion of all the record evidence.
On remand, Commerce said it found it "appropriate to remove HS code 4412.99 from the plywood" benchmark. The agency said it made this decision on the basis that Baroque provided evidence "that explicitly demonstrates HS 4412.99 covers products not comparable to the input product used by Baroque Timber in the production of subject merchandise during the [period of review (POR)]." Noting the court's finding that the record shows that plywood and laminated wood are distinct products, the agency said it finds HS category 4412.99 to not be reflective of products comparable to the plywood input used by Baroque.
The result dropped the CVD rate for this program to 9.35%, bringing Baroque's total CVD rate to 13.18%.
Lastly, the court sent back Commerce's benchmark calculation for the provision of subsidized veneers program, which was applied to respondent Jiangsu Guyu. In its initial decision, the agency said plywood and veneers are two distinct types of wood inputs, and that veneers are "thin slices of wood" while plywood is "assembled veneers." Commerce said the veneers for less than adequate remuneration program isn't limited to a specific species of wood or type of veneer and that the petitioner isn't required to provide every type of potential veneer species in its benchmark submission.
The court said the agency didn't explain the reasons the "other species" of wood included in its benchmark data satisfied the agency's obligation to "measure the adequacy of remuneration 'in relation to prevailing market conditions for the good or service being provided.'"
On remand, Commerce stuck with its benchmark calculation. The agency said it used HS subheadings "4408.10, 4408.39, and 4408.90 to calculate the benchmark for Jiangsu Guyu’s poplar core sheet purchases," noting that all of these subheadings describe "Sheets for veneering ... for plywood ... sawn lengthwise, sliced or peeled ... of a thickness not exceeding 6mm." Jiangsu Guyu's reported end-use and physical characteristics of its poplar core sheet "make plain that such merchandise would be covered under these HS subheadings," the agency said.
Commerce said while Jiangsu Guyu and other parties have challenged the benchmark, none of the challengers have offered "specific arguments based on the descriptions of the HS subheadings used to calculate the veneer benchmark." While the agency said it doesn't disagree that poplar core sheet and face-grade veneers have different physical characteristics, subheadings 4408.10, 4408.39, and 4408.90 are "descriptive of both."