Xanthan Gum Exporter Can't Challenge Beneficial Error, CIT Rules
The Commerce Department’s error in its calculation of a mandatory respondent’s energy costs actually helped the respondent, so the exporter can’t keep suing solely in hopes of further deflating its normal value, Court of International Trade Judge Gary Katzmann held in a Jan. 30 opinion.
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In the opinion, Katzmann sustained in part and remanded in part the results of an antidumping duty review on xanthan gum from China. He sustained Commerce’s decision to value mandatory respondent Neimenggu Fufeng Biotechnologies’ selling, general and administrative costs directly, not indirectly. But he remanded its continued choice to value Fufeng’s coal input under Harmonized System subheading 2701.12, not 2701.19 (see 2505080047).
Commerce directly valued Fufeng’s energy costs. As a result, it removed an entire line item from surrogate Ajinomoto (Malaysia) Berhad’s financial records called “administrative and other expenses” to avoid double-counting.
It hadn’t directly valued Fufeng’s costs in previous reviews because, in the past, Ajinomoto had only included its energy costs in a line item labeled “other operating expenses.” But its records for the review in question further divided the “other operating expenses” into “selling and distribution expenses” and “administrative and other expenses.” Because it found that energy wouldn’t be included under “selling and distribution expenses,” Commerce determined that it must have been located in “administrative and other expenses,” which it could simply delete so that it could instead use Fufeng’s own energy costs.
Katzmann expressed confusion about the decision to strike the entire “administrative and other expenses” line item from the numerator of the surrogate ratio. Dividing selling and administrative expenses “might reveal some information about what ‘administrative and other expenses’ does not contain, but it reveals little about what it does contain,” he said.
But the decision ultimately benefited Fufeng, he said, even if Fufeng still might have preferred that its energy costs were valued indirectly. For that reason, the department’s error was "harmless."
“If Commerce removed additional non-energy costs from this numerator on account of its wholesale subtraction of all the undifferentiated components of ‘administrative and other expenses,’ so much the better for Fufeng,” Katzmann said. “Fufeng will not be heard to argue that Commerce should have taken greater pains to avoid giving it a windfall.”
The judge did again remand Commerce’s determination that Fufeng’s coal inputs should have been classified as bituminous coal under HS subheading 2701.12 (see 2412160069).
Katzmann first took judicial notice of the Harmonized System. He explained that Commerce had valued Fufeng’s coal using that system, but had refused to “consider the ‘exact text’” of a relevant note from it, Note 2 to Chapter 27, because Fufeng hadn’t put the system on the record.
Note 2 defined bituminous coal as having a calorific value limit of at least 5,833 kcal/kg. Fufeng argued that its coal wasn’t bituminous because the coal had a calorific limit below 5,800 kcal/kg.
In its remand results, Commerce focused too heavily on Fufeng’s “narrow acknowledgment” that its coal could be considered “‘bituminous’ for certain distinct purposes,” Katzmann said. The results misleadingly “lead a reader to think that Fufeng asserted that its coal is bituminous,” he said.
Instead, the department needed to offer substantial evidence for its choice to value Fufeng’s coal as bituminous coal, as defined in Note 2, Katzmann said.
(Neimenggu Fufeng Biotechnologies Co. v. United States, Slip Op. 26-8, CIT # 23-00068, dated 1/30/2026; Judge: Gary Katzmann; Attorneys: Dharmendra Choudhary of Grunfeld Desiderio for plaintiffs led by Neimenggu Fufeng Biotechnologies; David Craven of Craven Trade Law for consolidated plaintiffs Meihua Group International (Hong Kong) and Xinjiang Meihua Amino Acid Co.; and Daniel Bertoni for defendant U.S. government)