Subsidy Provider's Intent, Competitive Advantage Immaterial to US CVD Law, Manufacturer Tells CIT

German exporter BGH Edestahl Siegen's claim that its higher costs preempt any countervailability findings don't comport with U.S. countervailing duty law, U.S. manufacturer Ellwood City Forge said in a March 22 brief at the Court of International Trade. Filing a motion for judgment, Ellwood said CVD statute and the Commerce Department's regulations don't dismiss subsidy programs that alleviate high costs that may be high due to government policies themselves (BGH Edestahl Siegen v. U.S., CIT #21-00080).

The case concerns the countervailing duty investigation on forged steel fluid end blocks from Germany in which BGH and Schmiedewerke Groditz served as the two mandatory respondents. Commerce countervailed multiple EU and German government subsidies, which BGH argued were due to these governing bodies seeking to comport with international climate agreements and not to raise government revenue. Plaintiff BGH argued that the programs can't be subsidies because the environmental measures raise the company's energy costs.

Ellwood, however, argues that these points are immaterial to the programs' countervailability. The law clearly says that a countervailable subsidy exists "whenever there is a direct or indirect financial contribution that is provided to specific groups of enterprises or industries, and which confers a benefit on the recipient," Ellwood said. As such, Commerce properly found these programs to be countervailable and rejected these arguments from BGH, Ellwood said.

"The intent of the subsidy provider is irrelevant," the brief said. "Whether or not the subsidy confers a competitive advantage on foreign producers vis-à-vis U.S. industry is also immaterial to Commerce’s subsidy determination under the statute."