Mexican Manufacturers Claim Calculation Errors in Mexican Pipe AD Results

The Commerce Department made a host of errors in its antidumping duty calculations in an administrative review on light-walled rectangular pipe and tube from Mexico, including the improper collapsing of pipemaker Maquilacero and auto-parts manufacturer Tecnicas de Fluidos (TEFLU), the two companies argued in a Sept. 28 motion for judgment at the Court of International Trade (Maquilacero v. U.S., CIT Consol. # 23-00091).

In addition, Maquilacero and TEFLU argued that Commerce erred by including TEFLU's downstream products as in-scope merchandise and when it treated TEFLU's virtual exporter sales under the Industria Manufacturera, Maquiladora y de Servicio de Exportación (IMMEX) program as domestic sales despite knowing they were destined for export. The motion is also the latest in a series of filings challenging Commerce's use of the Cohen's d test in differential pricing analysis.

Commerce’s decision to collapse Maquilacero and TEFLU was improper because the department relied on a prior 2018-2019 collapsing determination without conducting an analysis of the statutory collapsing factors, the companies said. Though Maquilacero and TEFLU meet two of the statutory criteria, overlap in ownership and management, Commerce failed to address arguments during th proceeding that challenged the basis for even conducting a collapsing review. The department's reliance on a previous review, without explanation, makes the decision to collapse unlawful, the brief said.

Commerce unlawfully expanded the scope of the AD order to include finished downstream products sold to automotive equipment manufacturers, the two exporters argued. TEFLU's parts that are further manufactured may "share basic chemical and physical characteristics" but are clearly not the same product as the light-walled rectangular pipe and tube included in the scope of the AD order, they said. The International Trade Commission's injury finding considered the auto parts a downstream application, not subject merchandise, the exporters argued. They also noted that the CIT had previously cautioned Commerce that downstream finished products made from subject merchandise aren't themselves subject merchandise.

Even if the department correctly found that TEFLU's downstream products were in-scope, it failed to use control numbers suited for "such a broad interpretation of the scope language," the exporters argued. The department ignored additional processing in its model matching methodology, which skewed any comparison between export price and normal value and produced "distorted" margins, the exporters said.

Mexico's IMMEX program is a tax regime that allows a foreign company to purchase inputs from Mexico free from domestic value-added tax when those inputs are used at Mexican facilities to produce end products for export. The nature of the program ensured that items sold through it were bound for export, but Commerce still treated such sales as home market sales, which further skewed the dumping margin, they argued.

Commerce also failed to provide any explanation that showed how the statistical assumptions underlying the Cohen’s d test were reliable, the exporters said. Such a showing has been required since an opinion by the U.S. Court of Appeals for the Federal Circuit in Stupp Corp. v. U.S. Commerce likewise failed to provide any reasonable explanation for using a simple average instead of a weighted average, when calculating the denominator of the Cohen’s d coefficient in accordance with Mid Continent Steel & Wire, Inc. v. U.S. (see 2310040025).

As in its initial May complaint, the exporters asked the court to remand the case to Commerce for review (see 2305040054).