Key CAFC Opinion Dropping PMS Adjustment to Sales-Below-Cost Test Appears in 1st CIT Cases

Recently, the U.S. Court of Appeals for the Federal Circuit made a splash when it said that the Commerce Department can no longer make a particular market situation adjustment to an antidumping review respondent's cost of production in a sales-below-cost test when calculating normal value (see 2112100039). This opinion surfaced in two Court of International Trade cases also contesting Commerce's PMS adjustment to the sales-below-cost test via a pair of supplemental authority notices (NEXTEEL Co., Ltd., et al. v. United States, CIT Consl. #20-03868) (Hyundai Steel Company v. United States, CIT Consol. #18-00154).

The cases are brought by NEXTEEL Co. and Hyundai Steel Co., with the latter being the plaintiff in the Federal Circuit case as well. In both of these cases, CIT has already made the same decision that the Federal Circuit did, prompting Commerce to drop the PMS adjustment (see 2109270042) and 2107190029). Both courts have held that the statute does not permit such an adjustment and that a cost-based PMS adjustment is only permitted when calculating constructed value.