Commerce Maintains Heat-Treatment Scope Finding on Aluminum Sheet From China
The Commerce Department continued to find that importer Valeo North America's T-series aluminum sheet falls under the scope of the antidumping and countervailing duty orders on aluminum sheet from China, in remand results submitted June 20 at the Court of International Trade. After Judge Mark Barnett sent back the decision for exceeding the limits of a (k)(1) analysis and so the agency could address evidence that Valeo's aluminum sheet undergoes heat treatment, Commerce said that Valeo's T-series sheet does not undergo solution heat-treatment and is subject to duties (Valeo North America v. United States, CIT # 21-00581).
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During the scope proceeding, Commerce said that Valeo's sheet was covered by the orders as "flat aluminum products" with a thickness of "6.3 mm or less, but greater than .02 mm," and "is a multi-alloy, clad aluminum sheet produced from an aluminum core that has a primary alloying element of manganese, i.e., a 3XXX-series core." Valeo argued that its goods should be excluded from the scope since they are heat-treated and not a clad product. The importer also said that its sheet is made from a proprietary alloy core that is not a 3XXX-series core. Barnett upheld the agency's finding that Valeo's sheet is a clad product, though he remanded the issue over the issue of heat-treatability of 3XXX-series alloys.
On remand, the agency first set a definition of "heat-treatment," noting that it could be a synonym for solution heat-treatment or could be used as a broad shop term that includes solution heat-treatment but also various other types of thermal treatment including annealing. Ultimately, Commerce went with the first narrower definition, then relied on it to find that the temper designation of Valeo's T-series sheet shows that it does not undergo solution heat-treatment. While the sheet does undergo annealing, a form of heat-treatment, this type of treatment does not fall under the agency's definition for scope purposes, Commerce said.
"[T]he plain language of the scope unambiguously states that annealing is not a process that removes merchandise from the scope of the Orders," the remand results said. "Therefore, Commerce must make a finding based on this unambiguous plain language and may not find, based on (k)(l) sources that, as Valeo claims that the scope of the Orders does not cover annealed CAAS merely because the CAAS is annealed or able to be annealed."
From there, Commerce discussed the (k)(1) factors, finding them to be insufficient, then launched into a lengthy discussion of the (k)(2) factors. These factors included the physical characteristics of the merchandise, expectations of the ultimate purchaser, ultimate use of the product, channel of trade and manner in which the product is advertised and displayed, along with the interplay between the factors. The agency said four of the factors -- physical characteristics, buyer's expectations, use of the product and manner in which it's advertised -- support the finding that the T-series sheet is unambiguously covered by the scope. Commerce added that evidence in the channel of trade factor is insufficient to make a finding.