CIT Rejects Chinese Exporters' Arguments Over Countervailed Glass Inputs in CVD Case

The Court of International Trade rejected on Feb. 18 a group of Chinese exporter's arguments that a glass input for aluminum extrusions is not countervailable since it ties in to non-subject merchandise. Since the plaintiffs' arguments are "largely conclusory statements" and not backed by evidence on the record, Judge Leo Gordon said that the Commerce Department properly found that the glass inputs were countervailable.

The case concerns the 2013 administrative review of the countervailing duty order on aluminum extrusions from China and was initially brought by Taizhou United Imp. & Exp. Co. The court issued one prior opinion in the case, sustaining Commerce's position on nearly all the contested issues. Gordon did, however, remand the agency's decision to countervail subsidized purchases of glass and aluminum extrusions. On remand, Commerce continued to find that the glass purchases are countervailable, even though they weren't used in the subject aluminum extrusions.

In their opposition to this position, the plaintiffs tried to tap Commerce's "tying" principle, which says that a good may not be countervailable if it is "tied to non-subject merchandise." Gordon disagreed, finding that the plaintiffs' argument "consists largely of conclusory statements" and does not address Commerce's analysis. The agency clarified that the law permits it to countervail goods given to respondents at less than adequate remuneration regardless of whether they are actually used in the production of subject merchandise.

The plaintiffs said that there was no "reasonable basis" in the record to find that the subsidized glass was not tied to non-subject merchandise and that this flips the burden of proof onto Commerce. Not so, the judge said. "It is Plaintiffs’ obligation to put information on the record that would provide a basis for Commerce to reach Plaintiffs’ desired conclusion, namely that the subsidized glass purchases were dedicated to use in the production of 'non-subject merchandise' leading Commerce to exclude those subsidies from its benefits analysis," the opinion said.

Taizhou didn't point to a single piece of non-subject merchandise to which the glass could have been tied, the judge said. Thus, the plaintiffs do not qualify for this exception to countervailing a given input. The judge also struck down another of the plaintiffs' arguments, which said that Commerce did not follow the court's orders by maintaining its position. Gordon found that the court only sent the issue back to Commerce to reconsider, not to follow a predetermined path.

(Taizhou United Imp. & Exp. Co. v. United States, Slip Op. 22-14, CIT Consol. #16-00009, dated 02/18/22, Judge Leo Gordon. Attorneys: Douglas Heffner of Drinker Biddle for plaintiff Taizhou; J. Kevin Horgan of deKieffer & Horgan for consolidated plaintiffs; Douglas Edelschick for defendant U.S. government; Alan Price of Wiley Rein for defendant-intervenors Aluminum Extrusions Fair Trade Committee)