Chinese Flooring Exporter Challenges Use of AFA, Benchmark Calculations in CVD Review

Countervailing duty respondent Riverside Plywood and its cross-owned affiliate Baroque Timber Industries (Zhongshan) Co. said the Commerce Department improperly used adverse facts available to find that all of its input suppliers were government authorities (Baroque Timber Industries (Zhongshan) Co. v. United States, CIT # 24-00106).

In the 2021 review of the CVD order on multilayered wood flooring from China, Commerce used AFA after finding that the Chinese government failed to give the agency enough information to find whether Riverside's input suppliers were government authorities. The respondent said in a July 15 complaint at the Court of International Trade that in so doing, the agency "ignored record evidence that certain of Plaintiffs’ suppliers that were wholly owned by individuals were not government authorities."

The result of the review was a 30.85% CVD rate for the respondent.

Riverside subsequently filed the four-count complaint at the trade court to contest the use of AFA and launch a trio of claims against Commerce's benchmark selections.

In the review, Commerce rejected Riverside's argument that the agency should only use International Tropical Timber Organization (ITTO) grade prices, as opposed to a mixture of ITTO and UNComtrade data when calculating the benchmark for plywood and veneers. In response, the agency rejected all of the "more specific" ITTO data listed in the Tropical Timber Market Report and just used the UNComtrade data, Riverside said.

The move cuts against "long-standing Department practice," which requires the agency to calculate benchmarks with the "most product-specific world price possible," the brief said. The complaint added that the exclusion of the ITTO report data from the benchmark averaging calculation in the final results of the review also cuts against the agency's "long-standing" practice from prior CVD reviews of including that TTMR data in its calculation.

Lastly, Riverside challenged the use of Descartes ocean freight data to value the "ocean freight component of the Tier 2 benchmarks" instead of the respondent's Freightos freight data.