Exporter Contests Commerce's Remand Picks for Surrogate Values of Ocean Freight, Fabricated Inputs
Exporter Zhejiang Dingli Machinery challenged the Commerce Department's decisions made on remand to use Maersk data to value ocean freight and value minor fabricated components using Harmonized Tariff Schedule subheading 8431.20.90 data. Filing a response to the agency's remand results in a case on the antidumping duty investigation on mobile access equipment from China, Dingli said the Maersk price quotes are unreliable and that the agency strayed from its normal practice in picking the data for subheading 8431.20.90 (Coalition of American Manufacturers of Mobile Access Equipment v. United States, CIT # 22-00152).
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.
In June, the trade court remanded Commerce's surrogate value picks for Dingli's ocean-shipping costs, which the agency initially based on data from Descartes, Freightos and Drewry (see 2406030039). Dingli submitted its routes as business proprietary information, which the judge remanded "for the agency to explain why such characterization was permissible" under Commerce's regulations. The court said Commerce couldn't accept Dingli's designation of its routes as BPI, then find the label was wrongly applied and entirely reject the data due to the agency's preference for using publicly available data.
The review’s petitioner, Coalition of American Manufacturers of Mobile Access Equipment, advocated for the department to use Maersk data, which was designated as business proprietary information “stemming from Dingli designating its ocean shipping routes as BPI" (see 2410310052). On remand, Commerce switched to using the Maersk data, finding it to be more specific.
In its comments, Dingli said the agency's "twin rationales" used to back the Maersk data pick, "route specificity and incidental ocean freight charges," are "unsupported by both record evidence and Department precedent." The exporter said "reliability of data is the paramount consideration," noting that the Maersk ocean freight quotes aren't based on actual shipments or payments, but rather are "electronically generated through online research by inputting various unknown shipment parameters."
The evidence actually supports the fact that the Freightos and Drewry data are based on "actual arm's length transactions," the brief said. Commerce "baselessly" claims that the trade court "restricted it to examine only the route specificity" and "precluded a comprehensive comparative analysis of all four data sources," the exporter said.
The trade court also remanded Commerce's surrogate values for Dingli's fabricated steel components after finding the agency's finding to be "internally inconsistent," since some of the HTS headings Commerce used were related to base steel plate rather than more processed fabricated steel. On remand, the agency switched to subheading 8431.20.90, which covers fabricated steel inputs.
Dingli argued that Commerce's choice "strictly follows the analysis used to classify goods for Customs purposes in deviation from Commerce’s normal practice that favors a HTS subheading yielding a more reliable, representative, and accurate value -- even though it may not be the most suitable for classification purposes."