CIT Upholds Remand in CVD Review After Commerce Picks 2nd Respondent
The Court of International Trade on Sept. 11 sustained the Commerce Department's 2017 review of the countervailing duty order on multilayered wood flooring from China, after the agency added a second respondent on remand and reconsidered certain benchmark calculations. Judge Timothy Reif said that no party objected to Commerce's remand results (Jiangsu Senmao Bamboo and Wood Industry Co. v. United States, CIT Consol. # 20-03885).
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In March, Reif sent back the review after finding the agency erred in picking just one mandatory respondent (see 2504010073). On remand, the agency calculated an individual rate for Jiangsu Senmao Bamboo and Wood Industry Co., 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.
The trade court had also remanded the use of Harmonized Schedule [words used in the earlier decision by Reif] subheading 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 HS subheading 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 subheading 4412.99 from the plywood benchmark (see 2508110013). 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.
The change dropped the CVD rate for this program to 9.35%, bringing Baroque's total CVD rate to 13.18%.
Finally, Reif remanded Commerce's benchmark calculation for the provision of subsidized veneers program, which was applied to respondent Jiangsu Guyu. Initially, 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, noting that HS subheadings 4408.10, 4408.39 and 4408.90 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.
The only comments CIT received on the remand were from plaintiff-intervenors Fine Furniture (Shanghai) and Double F, which urged Reif to sustain the remand results.