Chinese Exporter Tells CIT Commerce Knowingly Double-Counted Dumping Margin

The Commerce Department improperly, and knowingly, double-counted Chinese exporter Hangzhou Ailong Metal Products Co.'s dumping margin in the 2019-2020 administrative review of the antidumping duty order on light-walled rectangular pipe and tube, Ailong argued in a May 11 complaint at the Court of International Trade. Commerce admitted as much, recognizing that Malaysian surrogate value data used for square tube, just one factor of production, included further processed square tube and the raw square tube used by Ailong, the exporter said (Hangzhou Ailong Metal Products Co., Ltd. v. United States, CIT #22-00116).

In the review, Ailong provided surrogate information of a Russian company so that Commerce could use proper SV data for steel plate -- a key FOP of the subject merchandise. Instead, Commerce used Malaysian surrogate data just for steel tube despite this data containing the full cost of production; selling, general and administrative expenses; financial expenses; and profit associated with the sale of the subject merchandise. This led to an inflation of Ailong's dumping margin -- which sits at 157.40%.

Ailong, bringing its case to CIT, argued that this move was illegal. "Commerce’s decision to use the Malaysian SV, and thereby knowingly engage in improper double counting in its margin calculation, was not in accordance with the law," the brief said. Ailong further contested Commerce's decision to use the raw square tube FOP data since the Malaysian surrogate data was for steel tube.

"Commerce cannot assess the 'reliability' of SV information without first determining the appropriate FOP," the complaint said. "The reliability of SV information depends on the FOP that it is intended to value. ... Raw square tube (i.e., unprocessed LWRPT) cannot be a FOP for the subject merchandise because it is within the scope of the LWRPT Order. The appropriate FOP for the direct material used in the manufacture of subject merchandise is steel plate. Commerce failed to make this finding before evaluating the reliability of SV information on the record."