Commerce Again Drops PMS Adjustment in Sales-Below-Cost Test Following CIT Opinion

The Commerce Department dropped its particular market situation adjustment to two antidumping respondent's cost of production in the sales-below-cost test in Dec. 15 remand results submitted to the Court of International Trade. If sustained, the result would cause the dumping rates for the respondents -- HiSteel Co. and Kukje Steel Co. -- to drop to 9.90% and 1.91%, respectively. The move by Commerce is one many in response to prior CIT opinions finding it illegal to make a PMS adjustment to the COP in a sales-below-cost test. Most recently, the U.S. Court of Appeals for the Federal Circuit upheld this principle in a precedential opinion (see 2112100039) (HiSteel Co., Ltd., et al. v. United States, CIT #20-00146).

Commerce's switch, though, came in a case over an administrative review of the antidumping duty order on heavy walled rectangular welded carbon steel pipes and tubes (HWR) from South Korea, in which HiSteel and Kukje were mandatory respondents. Following allegations from the AD petitioner, Commerce held that a PMS existed for hot-rolled steel oils, an input of HWR, based on four factors: unfairly traded steel from China, subsidization of HRS by the South Korean government, government control over electricity prices in South Korea, and alliances between South Korean HRC suppliers and HWR producers. The agency then used these factors to make a PMS adjustment to the respondent's COP in the sales-below-cost test. CIT found this was illegal and remanded Commerce to fix it (see 2109230037).