Steel Pipe Exporters Challenge Commerce's Levels of Trade Determination in AD Case

Steel exporters Universal Tube and Plastic Industries, along with THL Tube and Pipe Industries and KHK Scaffolding and Framework, say that the Commerce Department incorrectly determined that there was only a single level of trade in the home market, in an antidumping case on circular welded carbon-quality steel pipe from the United Arab Emirates. In a May 10 motion for summary judgment in the Court of International Trade, Universal argued that Commerce ignored substantial record evidence to the contrary, leading to an improper antidumping duty margin (Universal Tube and Plastic Industries v. U.S., CIT # 20-03944).

The plaintiffs challenged the final results of the antidumping administrative review on circular welded carbon-quality steel pipe from the UAE. In ADD cases, Commerce is required to make a comparison between U.S. sales to home market sales at the same level of trade, and in this case, determined there was only one level in the UAE. Universal disputed this, declaring that it sold pipe to affiliated distributors who then resold the merchandise to unrelated customers. Record evidence then established that the selling activities performed by the affiliated resellers were more "numerous and intense" than the selling activities performed by the producers at a less advantaged marketing stage. Universal dubbed the sales made by the plaintiffs directly to unrelated customers in the UAE as "Channel 1" sales and the sales by the plaintiffs to the affiliated resellers as "Channel 2" sales. This difference in the level of trade had an effect on the price, Universal argued.

Commerce in its final results contested this and said that the sales made by the plaintiffs and the downstream affiliated resellers were all part of the same marketing stage in the chain of distribution. The agency did not properly assess whether there were two different levels of trade based on five overlooked factors, the exporters argued: "(1) the 'doubling-up' of selling activities for Channel 2 sales, (2) the types of selling activities performed for each sales channel, (3) the relative intensity and frequency of the selling activities, (4) the quantitative differences in the selling activities and (5) the impact such differences had on price comparability at the different marketing stages."