Commerce Can't Make PMS Adjustments to Exporter’s Costs of Production, US Says

The U.S. defended the results, on voluntary remand, of its antidumping duty investigation on forged steel fluid end blocks from Germany, saying the Commerce Department wasn't allowed to adjust its calculations of an exporter’s costs of production in response to a particular market situation (Ellwood City Forge Co. v. U.S., CIT Consol. # 21-00077).

In the underlying remand results that it previously filed with the Court of International Trade, the Commerce Department lowered the antidumping duty rate of one of the investigation’s respondents from 4.79% to 3.08%, saying it had made calculation errors. However, it rejected the “alternative pathways” that domestic petitioners, led by Ellwood City Forge Co., had proposed would allow the department to make adjustments to its costs of production calculations for two of the goods’ inputs (see 2311220001).

Although Commerce had found a PMS existed for the two inputs, PMS adjustments for production costs have been struck down by the U.S. Court of Appeals for the Federal Circuit, DOJ reiterated. It said Elwood’s “alternative pathways” were, despite Ellwood’s arguments, still PMS adjustments. Some of those alternatives also lacked evidence, it added.

Ellwood had already agreed that two of its proposed pathways were foreclosed by recent Federal Circuit decisions in Hyundai Steel v. U.S. and Saha Thai Steel Pipe v. U.S., DOJ said. It said the only matter still under consideration was the third and final path Ellwood proposed, by which Commerce would use its discretion “to reject a respondent’s reported costs in performing the sales-below-cost test wherever those costs do not ‘reasonably reflect’ the costs of production.”

Ellwood argued that the respondents’ records were not “reasonably reflective” of their costs of production because Commerce had found a PMS to exist for two inputs. However, a cost-based PMS finding “does not warrant disregarding a respondent’s books and records,” DOJ said. Commerce may only do that in specific circumstances, and those circumstances were not present in this case, it said.

“A particular market situation finding is a finding not based on a respondent’s books and records, but on market conditions,” it said.

Commerce had properly determined its calculations properly represented the respondents’ costs of production, the department said. And, over the course of both remands, “Ellwood City still has not pointed to an actual problem in [defenant-intervenor BGH Edelstahl Siegen GmbH]’s books and records,” it said.