Commerce Drops PMS Adjustment to Sales-Below-Cost Test in South Korean AD Case

The Commerce Department dropped a particular market situation adjustment from a sales-below-cost test in an antidumping duty investigation, in its remand results filed at the Court of International Trade, concurrent with a court decision instructing it to do so. The agency maintains that a PMS existed for South Korean steel inputs but concedes that the court's interpretation of the law does not permit an adjustment to the cost of production for the PMS in the sales-below-cost test. The remand rate dropped for mandatory respondent Hyundai Steel Co. from 30.85% to 12.92% and for non-examined respondent SeAH Steel Corp. from 19.28% to 9.99% (Hyundai Steel Co. v. United States, CIT Consol. #18-00154).

The case, brought by Hyundai and SeAH, flows from the final results of the 2015-16 administrative review of the antidumping duty order on circular welded non-alloy steel pipe from South Korea. In the review, Commerce found a PMS for hot-rolled steel coil in the South Korean market, originally basing this finding on four different factors. After CIT initially rejected this finding, Commerce added a fifth factor to argue that a confluence of factors favors finding a PMS. Judge Jennifer Choe-Groves then remanded this finding a second time. Commerce then continued to argue for a PMS adjustment. Choe-Groves again sent back this finding, prompting the third remand results filed Sept. 8.

In the second remand results, Commerce argued that a portion of the Trade Preferences Extension Act of 2015, Section 1677b(e), allows Commerce to make a PMS adjustment for both constructed and normal value. Choe-Groves disagreed, holding that Commerce cannot rely on this section when it bases normal value on home market sales. “No part of the statute allows Commerce to use any other methodology when market sales are used for normal value,” the judge said (see 2107190029). Commerce can only use sales conducted in the ordinary course of trade when calculating normal value, Choe-Groves said.

Commerce dropped the PMS adjustment for Hyundai but not the other mandatory respondent, Husteel Co., because it is not party to the litigation.