Tool Maker's Cupwheels Excluded From AD Order on Diamond Sawblades, CIT Rules

Lyke Industrial Tool's cupwheels are not within the scope of the antidumping duty order on diamond sawblades from China, the Court of International Trade held in an Oct. 7 order. After conducting an analysis of the "(k)(2)" factors following an initial remand from CIT, which included comparing the physical characteristics, end uses, consumer expectations and methods of advertising for cupwheels and diamond sawblades, the Commerce Department held that the cupwheels could not be held in the scope of the AD order.

After the order was issued, Lyke asked Commerce if its diamond sawblades and cupwheels were within the scope of the order. The agency found that the sawblades were within the scope of the order but that the cupwheels were not. The Diamond Sawblades Manufactuers' Coalition (DSMC) then brought its case to CIT challenging this finding.

In the first decision in the case, Judge Richard Goldberg remanded the scope decision to Commerce, finding that the text of the scope of the order didn't resolve the dispute in and of itself because the term "sawblade" was not clearly defined. Goldberg also said that the sources Commerce used in its "(k)(1) analysis" didn't definitely answer the scope question, instructing the agency to conduct a (k)(2) analysis.

Such analysis weighs five factors to determine if a given product is within the scope of an AD order: physical characteristics, expectations of the ultimate purchasers, ultimate use of the product, channels of trade in which the product is sold and the manner in which the product is advertised and displayed. Commerce looked to each five of the factors and found that the cupwheels are not within the scope of the order. Four of the five -- physical characteristics, purchaser expectations, use of the product and advertising method -- were found to support exclusion.

On the physical characteristics of the cupwheels, Commerce said the wheels are "physically distinguishable" from the diamond sawblades. Seeing as a product that does not have an "attacking edge that penetrates the material" is not subject merchandise, cupwheels are not subject merchandise as they don't have this edge. As it pertains to the way the goods are advertised, diamond sawblades are marketed as cutting through hard material while cupwheels are advertised as tools designed to grind, level or smooth surfaces of hard material. This difference supports the conclusion that the cupwheels should be excluded from the order, the judge said.

For the channels of trade consideration, Commerce said that both items are sold to distributors, namely retail outlets, and end-users directly. This indicates a dispositive factor relating to exclusion, "However, Commerce permissibly found that the other four factors weighed in favor of finding that Lyke’s cupwheels are not covered by the scope of the Order," the judge said.

(Diamond Sawblades Manufactuers' Coalition v. United States, Slip Op. 21-137, CIT #18-00134, dated 10/07/21, Judge Richard Goldberg. Attorneys: Daniel Pickard of Wiley Rein for plaintiff DSMC; John Tudor for defendant U.S. government)