CIT Sustains Commerce's PMS Adjustment Drop to Sales-Below-Cost Test in 2 AD Reviews

The Court of International Trade sustained the remand results in two similar antidumping duty cases after the Commerce Department dropped a particular market situation adjustment to the cost of production in the sales-below-cost test. The court issued two opinions on Sept. 17, both in cases brought by steel exporter Saha Thai Steel Pipe Public Company Ltd. which challenged the 2016-17 and 2017-18 administrative reviews of the antidumping duty order on circular welded carbon steel pipes and tubes from Thailand. Judge Jennifer Choe-Groves had issued a total of three prior remands between the two cases, finding that the PMS adjustment was contrary to law, prompting Commerce to finally drop the adjustment under respectful protest.

After the remand results were issued in both cases, Saha and the Justice Department signed off on the redeterminations (see 2106010026). In the first opinion, Choe-Groves said the court repeatedly found that the statue does not permit a PMS adjustment to the cost of production when Commerce applies the sales-below-cost test to find which home market sales to exclude from the calculation of normal value.

DOJ unsuccessfully argued at CIT that Section 504 of the Trade Preferences Extension Act of 2015 gave the agency the authority to adjust the cost of production for the sales-below-cost test. Choe-Groves instead found that while the statute allows Commerce to disregard certain sales when basing normal value on home market sales, or to use an alternative calculation method based on a cost-based PMS determination when basing normal value on constructed value, it doesn't allow Commerce to adjust the cost of production for the sales-below-cost test.