Chinese Ball Bearings Exporter Says Commerce Double-Counted Its Products' Value

A Chinese ball bearings exporter asked for another remand of an antidumping duty review on its products after the Commerce Department exchanged its adverse facts available AD rate for one based on neutral facts, saying the department double-counted when constructing its products’ values and wrongly capped its revenue related to Section 301 duties (Shanghai Tainai Bearing Co. v. U.S., CIT # 22-00038).

Commerce had admitted on remand of its partial AFA finding for exporter Shanghai Tainai Bearing that it wasn’t able to determine whether the exporter exercised enough control over its suppliers “to induce their cooperation” with the department's administrative review (see 2401120060). It reduced the company’s AD rate from 538.79% to 76.58% by instead applying partial neutral facts available.

In comments on the remand, Tainai supported some of Commerce’s findings, but it still called the remand determination “fatally flawed.” It said that the neutral facts the department used resulted in too high a rate and that the department “should not have capped the additional revenue received as Section 301 duties by the amount of 301 duties paid” where those duty amounts were reported separately on its invoices to customers.

The neutral facts that Commerce relied upon remand were “facts which were still adverse to Tainai and which were not neutral facts,” Tainai said. It said the department applied financial ratios to constructed input values, then again to the final products. This, it said, was “masked” when Commerce first applied to Tainai an AFA rate.

Tainai also said that the department, in calculating export revenue it received related to Section 301 duties, “continued to cap the additional revenue by Tainai’s reported Section 301 duty expense[s] in those cases where the additional charge is reported separately on the subject merchandise[‘s] invoice[s].” Those separate charges were not service charges, but rather were “directly discussed” in customers’ invoices as “part of the price paid or payable,” it said. Commerce said in the remand that the extra costs Tainai included on those invoices represented U.S. import duties, including Section 301 tariffs, and not the actual prices Tainai was asking of its customers. Therefore, it said, those extra costs were not considered part of the exporter's U.S. costs in the same way service costs, such as freight, wouldn't have been.

“Critically … the tariff charge was shown to be directly tied to the quantity and part number on a ‘unit price’ basis,” it said. “Contrary to the view of the Department, such amounts were part of the unit price similar to that of a material surcharge, and were not similar to ‘freight’ or ‘insurance’ expenses which are set based on matters other than the goods and the price for such goods.”