CIT Tells Commerce to Reconsider Whether AD Respondent Paid Section 232 Duties on All Entries

The Commerce Department must reconsider whether antidumping duty respondent Power Steel paid Section 232 duties on all of its U.S. sales, the Court of International Trade said in a Dec. 23 opinion. Commerce, in an antidumping duty review, deducted Section 232 duties from all of Power Steel's U.S. sales when calculating export price. In her remand, Judge Jane Restani said sales invoices submitted by Power Steel may show it didn't pay Section 232 duties for some of its U.S. sales, so Commerce must take those into effect.

The case concerns Commerce's final results in the 2017-2018 administrative review of the antidumping duty order on steel concrete reinforcing bar from Taiwan. Power Steel contested Commerce's deduction of Section 232 duties from the U.S. export price and the agency's finding that Power Steel paid Section 232 duties on all of its U.S. sales.

The trade court upheld Commerce's ability to deduct Section 232 duties from the export price. Power Steel argued, as have others in the past, that Commerce should not deduct the steel and aluminum duties since they were "special duties" and not "normal U.S. Customs Duties." Commerce, however, said Section 232 duties are more like normal customs duties than antidumping or countervailing duties or Section 201 duties, which are not deducted from the export price. The court upheld this decision, basing its ruling on past CIT opinions, while noting that Power Steel did not provide a good reason as to why the court should reject past rulings.

Power Steel, however, did raise a "unique argument" when it argued that the president imposes Section 232 duties through "'specific and limited' congressional authorization for national security purposes while only Congress can enact 'normal customs duties' through Article 1 of the U.S. Constitution," the court said. But, Restani found this argument to be in error, giving Commerce deference over the definition of "United States import duty."

In the review, Commerce deducted Section 232 duties from the export price of all of Power Steel's entries. To counter this presumption, the respondent submitted evidence in an attempt to show that these duties were not paid on every entry by Power Steel and that, instead, the duties were paid by the U.S. customers. Such evidence included a revised sales agreement, email correspondence and accounting records. The court, though, found that Power Steel didn't argue before Commerce specifically that the sales invoices showed that it didn't pay the Section 232 duties.

However, Power Steel submitted sales invoices in response to a court order that show that the company didn't pay the Section 232 duties for certain transactions and those were thus not part of the sales price used to establish base export price, the court said. "As the administrative record contained one such sales invoice, the court remands to Commerce to consider whether the sales invoice of record and other record evidence sufficiently demonstrate Power Steel’s non-payment of Section 232 duties for this entry," Restani said. "If, on remand, Commerce declines to remove the adjustment to the U.S. price for the relevant sale, it must explain its analysis of the record evidence as a whole, including the sales invoice."

(Power Steel v. U.S., Slip Op. 21-173, CIT #20-03771, dated 12/23/21, Judge Jane Restani. Attorneys: Adams Lee of Harris Bricken for plaintiff Power Steel; Ann Motto for defendant U.S. government; Maureen Thorson of Wiley Rein for defendant-intervenor Rebar Trade Action Coalition)