Commerce Went Beyond Remand Order By Doubling Rate on Mattresses, Exporters Say

The Commerce Department failed to provide a compelling reason for its doubling of its dumping margin calculation for Cambodian mattress makers on remand, Best Mattress International and Rose Iron Furniture said in their Aug. 30 remand comments. The firms said the decision was unsupported by substantial evidence, as were its decision to use a simple average in surrogate value cost calculations and its reliance on financial statements from Emirates Sleep (Best Mattresses International v. U.S., CIT # 21-00281).

The comments came in response to the July 17 remand redetermination, in which Commerce more than doubled the weighted-average dumping margin for Best Mattresses and Rose Lion to 103.79%, from 45.34% (see 2307190035).

Instead of providing an explanation for its original determination to include data from non-market and export-subsidizing countries as the court had asked, Commerce "simply reversed its original determination without providing compelling reasoning," Best Matress and Rose Iron said. That decision was an unlawful departure from its established market economy methodology, they said, adding that the court's "limited instruction" directed Commerce to provide affirmative reasoning, which the agency failed to do.

Commerce’s policy of removing data is only applicable to NME cases where the department uses surrogate value methodology, which was not the case here, the exporters said. Commerce’s removal of the data from NME and export-subsidizing countries is unlawful because the investigation concerns products from a market economy, they said, and Commerce never cited any evidence suggesting that transactions were not arms-length sales, or were otherwise unreliable.

Commerce's remand calculation also failed to meet the underlying burden of accuracy, the exporters said. They said the decision to use a simple average instead of a weighted average for per unit cost calculation of surrogate values "unreasonably distorted the bottom-line costs of the surrogate values for its major inputs and transactions" and failed to account for differences in import volumes across the five surrogate countries. The decision to use a simple average was contrary to past decisions upheld by the CIT where Commerce found that a weighted average methodology was more accurate when surrogate values were not equally representative, the exporters said.

They also said Commerce's continued reliance on financial statements from Emirates Sleep is unjustified. Although they supported Commerce’s determination that the statements were incomplete, and agreed with the determination to use the Grand Twins International financial statements as part of the financial ratios, they protested the "extraordinary measure" of reopening the record on remand.

That move unfairly benefited the petitioners and was "directly contrary to Commerce’s typically firm policy," the exporters said. The decision was made "even more egregious" because Commerce had Grand Twins International's financial statements available for use in its constructed value calculation. Although the exporters said that they do not challenge Commerce's authority to reopen the record, they said the department went beyond the CIT's remand order by doing so.