CIT Upholds Commerce's Move to Drop PMS Adjustment From Sales-Below-Cost Test
The Commerce Department properly dropped its particular market situation adjustment to two antidumping duty respondents' costs of production in the sales-below-cost test, the Court of International Trade ruled in a Nov. 23 opinion. Judge Gary Katzmann said that the U.S. Court of Appeals for the Federal Circuit "in an analogous case, Hyundai Steel Co., made it illegal for Commerce to make a PMS adjustment to the sales-below-cost test when finding normal value based on home market sales, supporting the agency's removal of the adjustment in the present case.
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The case concerns an administrative review of the antidumping duty order on heavy walled rectangular welded carbon steel pipes and tubes from South Korea, in which HiSteel Co. and Kukje Steel Co. served as mandatory respondents. Following allegations from the AD petitioner, Commerce held that a PMS existed for hot-rolled steel coils, an input of heavy-walled pipe, based on four factors: unfairly traded steel from China, subsidization of hot-rolled steel by the South Korean government, government control over electricity prices in South Korea, and alliances between South Korean hot-roled steel coil suppliers and heavy-walled pipe producers. The agency then used these factors to make a PMS adjustment to the respondent's COP in the sales-below-cost test.
CIT previously found that this was illegal and ordered Commerce to fix it (see 2109230037). The decision was based on the Hyundai Steel decision (see 2112100039). Commerce then dropped the PMS adjustment on remand. "On December 10, 2021, in an analogous case, the Federal Circuit declared that it is 'impermissible' for Commerce to 'apply a PMS adjustment to the calculation of costs of production under the sales-below-cost test' for purposes of determining normal value based on home market sales," Katzmann said. "... Accordingly, in the case at bar, Commerce recalculated -- without making an upward PMS adjustment to the cost of [hot-rolled steel coils] -- weighted-average dumping margins for HiSteel and Kukje of 9.90 and 1.91 percent, respectively on December 15, 2021."
(HiSteel Co. v. United States, Slip Op. 22-129, CIT # 20-00146, dated 11/23/22, Judge Gary Katzmann. Attorneys: Jeffrey Winton of Winton & Chapman for plaintiffs HiSteel and Kukje Steel; Kara Westercamp for defendant U.S. government; Robert DeFrancesco of Wiley Rein for defendant-intervenor Nucor Tubular Products; Roger Schagrin of Schagrin Associates for defendant-intervenor Atlas Tube)