Aluminum Extrusion Importer Lambastes Commerce's 'Absurd' Interpretation of AD/CVD Exemptions

The Commerce Department's recent interpretation of the finished merchandise exemption to antidumping and countervailing duty orders on aluminum extrusions from China led to the "same absurd results" the agency originally wanted to avoid in its previous "subassemblies test" interpretation, importer WKW North America argued in a June 21 brief in support of its motion for judgment at the Court of International Trade. WKW contests a scope ruling from Commerce that found that the importer's automotive waist finishers, belt moldings and outer waist belts are within the scope of the AD/CVD orders because subassemblies can't qualify for the exemption (WKW North America, LLC v. United States, CIT #21-00072).

The finished merchandise exemption covers "finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry," from the orders. The importer says its automotive window trim fit that bill as they are "fully fabricated and finished" and are merely sold to and installed by original equipment manufacturers.

Commerce's ruling that subassemblies are not eligible for the exemption improperly rewrites the scope language, WKW said. The original scope language recognizes that a product can be both a subassembly and excluded from the scope by the finished merchandise exemption, WKW argued. "Contrary to Commerce’s artificial distinction, there is no express language in the scope that categorically excludes all merchandise -- subassemblies or assemblies -- from the finished merchandise exemption simply because they are incorporated into a downstream product," the brief said.

The ruling runs contrary to Commerce's own previously held interpretation that subassembles could be excluded as finished merchandise. In 2012, Commerce issued the first in a line of scope rulings that found as much, ruling that "an interpretation of ‘finished goods kit’ which requires all parts to assemble the ultimate downstream product may lead to absurd results, particularly where the ultimate downstream product is, for example, a fire truck." The same reasoning that applies to a fire truck applies to an automobile, WKW argued.