Commerce Erred in Duty Rate Calculations, Importer Argues at Trade Court

The Department of Commerce made multiple errors in calculating the duty margin in an administrative review of the antidumping duty order on antifriction bearings from China, Tainai said in a July 26 motion at the Court of International Trade (Shanghai Tainai Bearing Co., Ltd. and C&U Americans, LLC v United States, CIT #22-0038).

The case is an appeal of the 2020-2021 administrative review of the AD order, originally on "Tapered Roller Bearings" from China, published in 1987. When Commerce published its preliminary results of its 2020-2021 administrative review in July 2021, it calculated a rate of 36.75% for Taintai. In January 2022, Commerce published the final results and assigned Tainai a AD rate of 538.79% based on “partial” adverse facts.

Tainai argued that it is improper for Commerce to apply partial adverse facts to a fully cooperative entity like Tainai. The company said it provided all of the information in its possession and attempted to obtain information from third parties when requested. In order for an entity to be found not to be cooperative, it requires more than an error or a mistake, Tainai said. According to precedent, Tainai said, a party cannot be found to have failed its "best efforts" requirement for not producing information it does not have. Therefore, to the extent that necessary information is unavailable, the missing information should be selected from neutral, rather than adverse, facts.

In addition, Commerce had all of the information necessary to calculate margins, Tainai said. Where there were information gaps due to the non-cooperation of third parties, that information was not needed to correctly calculate margins. Therefore, Commerce improperly applied adverse inferences to a fully cooperative entity even though there were no gaps in information, Tainai said.

Commerce does not have unlimited discretion is calculating margins and, in this case Tainai said, the final margins "defy commercial and economic reality" as evidenced by the selected rate being five times that of the total adverse rate. Tainai cites an earlier court opinion that "453.79% as a remedial measure is difficult to comprehend from a commercial or economic standpoint," arguing that 538.79% should be "even more difficult to comprehend." Tainai said that it and its U.S. subsidiary are making a significant operating profit, which would be impossible if Tainai and CUA were dumping at the level calculated in Commerce's final results.

Finally, Tainai argued that Commerce incorrectly deducted Section 301 duties from the U.S. price, as 301 duties are not “U.S. import duties” and are special duties akin to antidumping duties, due to their temporary nature and connection to the conduct of the targeted party in contrast to ordinary customs duties that are those which are not contingent on external events. As a matter of policy, Tainai said, Commerce does not deduct either countervailing or antidumping duties from the U.S. price calculation, which would "result in the imposition of ... duties based solely on the imposition of such duties." By deducting these duties, Tainai said, Commerce is "imposing remedial duties based on remedial duties," Tainai argued.

Tainai has asked the court to remand the case to Commerce with instructions to modify the final results and correct Tainai's alleged errors in the final determination.