Commerce Remand Still Not Explaining Inconsistent Use of Inter-Quarter Comparisons, Exporters Say

The Commerce Department failed to explain its use of an inter-quarter comparison in a differential pricing analysis but not in a margin calculation, despite being told to do so by the Court of International Trade in a remand order, exporters argued Oct. 18 (Universal Tube and Plastic Industries v. U.S., CIT # 23-00113).

Exporters led by Universal Tube and Plastic Industries said that Commerce usually doesn’t take such inconsistent approaches to analyses under different parts of the Tariff Act of 1930.

“Once Commerce has determined that two parties are affiliated pursuant to 19 U.S.C. § 1677(33), for example, Commerce thereafter does not treat the affiliated parties differently under 19 U.S.C. § 1677a(b) (determining constructed export prices) or 19 U.S.C. § 1677b(f)(2) (transactions disregarded) even though such transactions among affiliated parties are conducted in different contexts,” it said.

But the department did so here by finding that its review of mandatory respondent Universal Tube warranted an inter-quarter comparison to decide whether to apply a Cohen’s d test analysis, but a same-quarter comparison in calculation of its costs.

The Court of International Trade should hold the differential pricing analysis unlawful, the mandatory respondent argued.

Commerce explained “that Universal’s costs and prices changed so significantly from quarter to quarter that Commerce had to deviate from calculating the cost of production using an annual weighted-average cost because of possible distortions,” the mandatory respondent said, citing the court.

It also said that Commerce still hasn’t provided any evidence that its inter-quarter differential pricing analysis wasn’t distortive. Rather, it said, the department “simply opines” that “the reasons why a firm’s prices differ significantly are simply not relevant” to differential pricing analyses, while they are to cost calculations.

“But this is not logical reasoning: B does not follow from A,” it said. “Just because Commerce does not consider the reasons for price differences among purchasers, regions, or time periods does not mean that any price differences found are free from distortion.”