Trade Court Upholds Commerce's Move to Drop PMS Adjustment From Sales-Below-Cost Test

The Commerce Department properly dropped its particular market situation adjustment to the sales-below-cost test, the Court of International Trade held in a June 16 opinion. Judge Jennifer Choe-Groves said that since the question of whether Commerce can make such an adjustment was settled in the key Hyundai Steel v. U.S. case at the U.S. Court of Appeals for the Federal Circuit, "the court need not waste its or the Parties' resources any further."

The case stems from the 2017-18 administrative review of the antidumping duty order on circular welded non-alloy steel pipe from South Korea. In the review, Commerce found that a particular market situation existed for hot-rolled steel coil, a key input of circular welded pipe, based on four factors alleged by the antidumping duty petitioner. Commerce then made an adjustment for this PMS to the mandatory respondents' cost of production when conducting a sales-below-cost test for calculating normal value. But, the law does not permit this, the court said in its ruling, striking down the PMS adjustment (see 2109270042).

On remand, Commerce dropped the PMS adjustment, as it has in many other AD cases at the trade court (see 2111010025). Further, in a precedential opinion in Hyundai Steel, the Federal Circuit said no such adjustment was permitted under the law. Since the plaintiffs, led by exporter Nexteel Co., support the PMS adjustment drop and the Federal Circuit definitely said the adjustment was illegal, Choe-Groves sustained the remand results.

"That point is moot in light of the U.S. Court of Appeals for the Federal Circuit’s opinion in Hyundai Steel Co. v. United States," the judge said.

(Nexteel Co. v. United States, Slip Op. 22-69, CIT Consl. #20-03868, dated 06/16/22, Judge Jennifer Choe-Groves. Attorneys: J. David Park of Arnold & Porter for plaintiff Nexteel; Jarrod Goldfeder of Trade Pacific for consolidated plaintiff Hyundai Steel Co.; Jeffrey Winton of Winton & Chapman for consolidated plaintiff SeAH Steel Corp.; Robert Kiepura for defendant U.S. government; Roger Schagrin of Schagrin Assocaites for defendant-intervenor Wheatland Tube Co.; Alan Price of Wiley Rein for defendant-intervenor Nucor Tubular Products Inc.)