Trade Court Sustains Surrogate Mfg. Overhead Ratio, Hourly Labor Rate in AD Review

The Commerce Department properly calculated the manufacturing overhead ratio in an antidumping duty review because the agency complied with the Court of International Trade's remand order regarding the calculation, the trade court said in an Oct. 30 opinion. Judge Richard Eaton said Commerce legally used the amount for indirect production expenses in the ratio's numerator while stating its reasons for subtracting energy costs from this number and placing them in the denominator, as instructed.

Eaton also upheld Commerce's use of Romanian International Labor Organization data to calculate the surrogate hourly labor value since the data "reflects hours actually worked in the surrogate country." The agency went further and substantiated the source of its surrogate values for labor by putting the ILO data on the record and "demonstrating how it calculated each of the numbers" as part of the 2017-18 AD review of multilayered wood flooring from China, the opinion said.

The result was a 2.05% dumping rate for respondent Fusong Jinlong Wooden Group Co., up from 0%, and a sustained 0% rate for respondent Jiangsu Guyu International Trading Co. The rate for the non-individually examined companies rose with Fusong's to 2.05% (see 2308250032).

In the review, Commerce originally used Romanian firm Sigstrat's 2018 data to calculate the surrogate financial ratios, arriving at a 5.8% manufacturing overhead ratio. The trade court remanded this calculation, finding that Commerce should have found a way to include more items in the numerator since the agency normally includes many more items than it used (see 2305190041). On remand, Commerce used Sigstrat's indirect production expenses figure, without energy costs, as the numerator, while using the remaining costs of goods sold as the denominator.

Eaton said Commerce reasonably "used the amount for indirect production expenses in the numerator of the ratio and stated its reasons for subtracting energy costs from this amount and placing them in the denominator." Energy costs are normally put in the denominator, making the calculation reasonable, the judge ruled.

(American Manufacturers of Multilayered Wood Flooring v. United States, Slip Op. 23-156, CIT # 20-03948, dated 10/30/23; Judge: Richard Eaton; Attorneys: Stephanie Bell of Wiley Rein for plaintiff American Manufacturers of Multilayered Wood Flooring; Sonia Orfield for defendant U.S. government; Stephen Brophy of Husch Blackwell for defendant-intervenors led by Jinagsu Senmao Bamboo and Wood Industry Co.; Wenhui (Flora) Ji of Mowry & Grimson for defendant-intervenor Yihua Lifestyle Technology Co.; Mark Ludwikowski of Clark Hill for defendant-intervenor Jiangsu Guyu International Trading Co.; and Ronald Wisla of Fox Rothschild for defendant-intervenors led by Metropolitan Hardwood Floors)