Commerce Defends Reliance on Actual Costs of Prime and Non-Prime Goods in AD Review to CIT

The Commerce Department's decision to reverse the adjustment to an antidumping duty review respondent's reported costs, relying instead on the actual costs of prime and non-prime products as reported by the respondent, complies with the standard set in the Dillinger France v. U.S decision, Commerce said. Replying to the antidumping respondent, Maverick Tube Corporation, in a Nov. 3 reply brief, Commerce said that its position did not require further consideration, but in fact a reversal, to comply with orders from the Court of International Trade (Husteel v. U.S., CIT #19-00112).

The case stems from the 2016-17 antidumping administrative review of welded line pipe from South Korea, in which Nexteel Co. and Husteel Co. served as respondents. In the review, Commerce calculated the costs of non-prime welded line pipe goods based on their resale value and then reallocated the difference between resale value and actual costs of production for non-prime products to the costs of prime products.

Judge Claire Kelly said this practice was “problematic” and violated the standards set in Dillinger (see 2106150083). Under Dillinger, Commerce must calculate constructed value based on the actual costs of production for prime and non-prime products. Taking the ruling into consideration, Commerce then made the switch to rely on Nexteel's actual costs of prime and non-prime goods (see 2109030024).

Maverick took issue with this position, arguing that there's a key distinction between this case and Dillinger, and that is that in Dillinger, Commerce relied on the respondent's normal books, which the Federal Circuit said didn't accurately reflect production costs. In this instance, the agency originally deviated from the reported costs from Nexteel's books. "However, the allocation in the respondent’s normal books and records in Dillinger, which the Federal Circuit rejected, was substantially similar to Commerce’s original adjustment in this case, which Commerce reversed on remand," the brief said. "If Commerce were to agree with Maverick in this case, which it does not, Commerce would have had an additional burden to justify a departure from NEXTEEL’s normal books and records."