Commerce Must Use ‘Identical,’ Not ‘Comparable,’ Goods as Surrogates, Petitioner Says

The Commerce Department wrongly used data of producers of “similar,” not “identical,” products when constructing a respondent’s value in an antidumping duty review on forged steel fluid end blocks from Italy, a petitioner said June 28 (Ellwood City Forge Co. v. U.S., CIT # 23-00191).

Petitioner Ellwood City Forge defended its motion for judgment against opposition by the government (see 2405240070), which argued that the Commerce Department was within its rights to construct a respondent’s home market sales by averaging the financial data of four companies, not just the two proposed by Ellwood.

But the other two companies hadn’t sold products identical to respondent Lucchini’s during the review period, the petitioner said. Lucchini and Ellwood’s proposed surrogates, OMR and Metalcam, sell forged steel fluid end blocks, it said, while Ciscato and Cogne, the two other companies Commerce used, sold only other forged blocks during the review period.

Ellwood Cityn Forge said the government relied on the “eyebrow-raising theory” that both the governing statute and standard practice, which “establish a preference for producers of ‘identical merchandise,’” indicate only a preference for producers of “similar” merchandise.

“Dictionaries confirm that ‘identical’ is distinct from merely ‘similar,’” the petitioner said.

And Commerce has explicitly refused to use the financial data of “comparable” products on prior occasions when those products aren’t covered by the scope of the order under review, it said.

The language of the antidumping duty order also clearly states that forged blocks aren't the same as forged steel fluid end blocks, it said. That language, it said, “specif[ies] chemistry requirements for iron, nickel, copper, chromium, and molybdenum,” as well as height, width and weight ranges and steel grade standards.

Commerce even agreed to this during this administrative review, Ellwood said. The agency said in a confidential cost memo that it selected OMR, Metalcam, Ciscato and Cogne because they were “involved in the production and/or sale of the merchandise under consideration,” it said. Commerce also said in its decision memorandum that it “has a practice of selecting the financial statements of companies involved in the production and sale of identical merchandise” over comparable merchandise, and that it had therefore “reevaluated the proposed surrogate financial statements” to make that distinction, it said.

And DOJ hasn’t shown that Commerce ever made the opposite claim that forged steel fluid end blocks are identical to “generic” forged blocks, it said.

“The court should not entertain defense counsel’s repeated attempts to cure Commerce’s deficient determination with flawed, post-hoc rationales,” it said. “That counsel resorted to such an approach underscores Plaintiff’s position that Commerce never weighed the evidence relevant to Plaintiff’s contentions in the first instance.”

Ellwood also denied the government’s claim that it initially advocated using Cogne as a surrogate, saying it had actually only pushed for that in the case that “for some reason, OMR’s and Metalcam’s data are both deemed unusable.”