Mexican Pipe Makers Challenge Inclusion of Downstream Goods in AD Review
Exporters Maquilacero and Tecnicas de Fluidos on Aug. 13 opened a five-count case against the 2022-23 administrative review of the antidumping duty order on light-walled rectangular pipe and tube from Mexico. The companies challenged the Commerce Department's findings that products made by Tecnicas from light-walled rectangular tubing are within the scope of the order and the agency's decision to collapse Maquilacero and Tecnicas (Maquilacero S.A. de C.V. v. United States, CIT # 25-00176).
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In addition, the exporters challenged Commerce's decisions to use "period-wide weight-averaged costs to determine" the companies' costs during the review period, apply a "smoothing adjustment in averaging costs" for the companies' products identified by control numbers and use the Cohen's d test to identify "masked" dumping.
The companies' case rested in part on Maquilacero's challenge to the 2020-21 review of the same order in which the Court of International Trade rejected Commerce's scope ruling that included Tecnicas' goods under the AD order. In the present review, Maquilacero and Tecnicas argued that Tecnicas' downstream automotive products "undergo further manufacturing through several additional operations, including saw-cutting, laser cutting-to-length, drilling, perforation, and/or bending."
These additional steps create a "new product with distinct physical characteristics compared to the subject merchandise." The companies said Tecnicas' products "are substantially transformed and lose their character as LWR tubing, such that they are not covered by the scope of the Order."
Regarding the agency's decision to collapse Maquilacero and Tecnicas, the companies argued that Commerce's regulations don't let the agency collapse affiliated parties, "unless they share 'production facilities for similar or identical products.'" The two companies don't share such facilities, and the companies showed the agency that the record "lacks evidence that Maquilacero sets TEFLU’s prices or is involved in the production of TEFLU’s products." There was "no risk of manipulation of price and production, which would justify a collapsing determination," the brief said.
Regarding the use of the Cohen's d test, Maquilacero and Tecnicas said that the U.S. Court of Appeals for the Federal Circuit, in Marmen v. U.S., categorically barred the use of the test in detecting masked dumping.