US Says Exporter Conflates AD/CVD Investigation and Anti-Circumvention Statutory Schemes

The U.S. on Sept. 23 told the Court of International Trade an exporter "confuses statutory schemes" when it claims that past negative antidumping and countervailing duty determinations shield against anti-circumvention findings on the same goods from the same countries. Defending the Commerce Department's circumvention findings of the AD/CVD orders on circular welded carbon quality steel pipes and tubes from China, India and South Korea, the government said exporter SeAH Steel Vina Corp. conflated the criteria for AD/CVD investigations with those for circumvention inquiries (SeAH Steel Vina Corp. v. United States, CIT Consol # 23-00256).

SeAH claimed that Commerce's circumvention findings are barred by years-old negative AD/CVD determinations on the same goods from China, India and South Korea (see 2401050019). The U.S. said these investigations are "immaterial" to the later circumvention inquiries.

The U.S. said that if AD/CVD were only allowed on goods found to be dumped or subsidized, then circumvention inquiries would be entirely "superfluous" because the only path to protection from unfair trade would be through AD/CVD proceedings. The government noted that SeAH failed to cite the "statutory scheme" for circumvention findings in its argument, instead discussing only those governing AD/CVD proceedings. Also, "common sense" instructs that goods within the scope of a circumvention finding are likely goods that have not been found to be dumped or subsidized in an AD/CVD case, the brief said.

SeAH's view that only goods found to be dumped or subsidized and injurious can be subject to AD/CVD is "doubly wrong," the brief said. Aside from being against the statutory schemes at issue, the exporter's claim "is wrong as a practical matter." Siding with the company "would have far-reaching, negative implications for this law’s effectiveness," the brief said.

Even if past AD/CVD findings were relevant, they wouldn't be binding or bar future circumvention decisions, the U.S. added. SeAH grounds its claim on the premise that its goods were subject to negative dumping, subsidization and injury findings in the AD/CVD cases on pipe from Vietnam. The government said the exporter "has not established this premise."

The anti-circumvention inquiry didn't concern all the pipe and tube SeAH makes in Vietnam, but only those products completed in Vietnam from hot-rolled steel imported from China, India and Korea, the brief said. SeAH failed to allege, "let alone" establish, that its goods examined in the Vietnam AD/CVD cases were "made from hot-rolled steel imported from these sources," the brief said.

SeAH said that Commerce claimed its circumvention inquiry was allowed because the statute doesn't explicitly bar inquiries on goods that have been investigated and found not to be dumped or subsidized. In response, the government said that "far from" this being its claim, "Commerce found the statute to be explicit: it identifies all criteria for assessing circumvention." As a result, the agency didn't rely on "statutory silence" in making the circumvention decision.

The U.S. defended the substance of its circumvention determinations, which SeAH challenged for various reasons. One such claim was that hot-rolled steel and pipe lack the same "essential character." The U.S. told the trade court that the exporter's definitions of the words "assembly" and "completion" don't align with their "ordinary or natural meaning" since the company looks to "impose categorical limitations on these terms that are not required in ordinary usage."

The government added that, in Bell Supply Co. v. U.S., the U.S. Court of Appeals for the Federal Circuit said that even if a product assumes a new identity in a third country, it can be found to be circumventing the relevant AD or CVD order. The U.S. said SeAH looks to "sow confusion by conflating distinct Commerce analyses" -- that of a good's "essential character" for a substantial transformation test and the circumvention analysis.