Commerce Drops PMS Adjustment From Normal Value Calculation on Remand at CIT
The Commerce Department in Nov. 29 remand results at the Court of International Trade dropped its particular market situation adjustment from the sales-below-cost test when calculating normal value following a voluntary remand request in an antidumping duty case. The result dropped respondent Saha Thai Steel Pipe Public Company Ltd.'s AD margin from 36.97% to 14.74%. The agency also reduced the margin for non-selected respondent Thai Premium Pipe Co. since it is part of the litigation (Saha Thai Steel Pipe Public Company v. United States, CIT #21-00627).
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Commerce said that after the U.S. Court of Appeals for the Federal Circuit's ruling in Hyundai Steel v. U.S., it can no longer make such an adjustment. In this key Federal Circuit decision, the appellate court found that "the statute only permits the adjustment of cost of production for a PMS when making comparisons based on constructed value."
The case concerns the 2019-2020 administrative review of the AD order on welded carbon steel pipes and tubes from Thailand in which Saha Thai served as a mandatory respondent. "In this review, all U.S. sales reported by Saha Thai matched to sales of identical or similar control numbers of its home market sales," the remand results said. "As a result, it was not necessary to match to constructed value under section 773(b) of the Act. Accordingly, we have not made a PMS adjustment to the cost of production for these final results of redetermination and have recalculated Saha Thai’s weighted-average dumping margin accordingly."
AD petitioner Wheatland Tube was the only party to contest the remand, arguing that the appellate court went out of its way to identify at least one path on which Commerce can adjust costs to address a PMS. "The CAFC noted that Commerce may depart from using home market sales if it finds that a '[PMS] in the exporting country does not permit a proper comparison with the export price or constructed export price,' explaining that this provision gives Commerce the power 'to address home market sales that are affected by a PMS yet still pass the sales-below-cost test' and that all Commerce would need to find (in addition to finding that the costs do not accurately reflect the costs of production in the ordinary course of trade) is that the PMS prevents a proper comparison to the export price," Wheatland said.