ITA's Use of Adverse AD Rates Gets Scrutiny in China Heavy Forged Hand Tools Remands
Following earlier court remands that questioned the International Trade Administration’s application of an adverse, China-wide rate of 139.31% to bars and wedges produced and exported by Tianjin Machinery Import and Export Corp. and Shandong Huarong Machinery Co., Ltd., a rate based on the highest margin calculated for Tianjin in a review five years earlier, the ITA repeatedly defended the high rate as tied to the case facts and warranted by the respondents’ participation in a fraudulent invoicing scheme. The Court of International Trade has now sustained the 139.31% rate for Tianjin. However, for bars and wedges produced and exported by Shandong Huarong, the court ordered the ITA to find a lesser adverse rate tied either to a single calculated rate in the period of review or to what the firm would have received had it cooperated, plus “a built-in increase as a deterrent to non-compliance” in either case.
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With respect to the ITA’s assignment of a 98.77% adverse rate to Tianjin’s exports of picks/mattocks, the court also ordered to ITA to find a lower rate based on “commercial reality,” but again with a built-in increase as a deterrent to non-compliance. (Heavy hand tools from China include separate orders for axes/adzes; bars/wedges; hammers/sledges; and picks/mattocks.) (Slip-Op. 11-1, decided 01/04/11, public version posted subsequently.)