CIT Says Exporter Tried Impermissibly to Add End-Use Limit in AD Order's Scope

In the 2022 administrative review of the AD order on German forged steel fluid end blocks, BGH urged Commerce to remove two products, certain forged steel products and forged steel bars made by its affiliate BGH Lippendorf, from the company's normal value calculation, since the products allegedly don't fall under the AD order's scope. The scope covers “forged steel fluid end blocks (fluid end blocks), whether in finished or unfinished form, and which are typically used in the manufacture or service of hydraulic pumps.”

For the first product type, the respondent said it didn't consider certain forged steel products to be subject goods, since they were made according to customer specifications "for use in products other than hydraulic pumps, such as military equipment or 'plastic extruders [and] compounding machines.'" BGH said the term "fluid end block" isn't defined in the scope so that Commerce should have considered Harmonized Tariff Schedule subheadings and the International Trade Commission report from the underlying investigation.

Barnett said that BGH's claim that a fluid end block must be defined as something "designed and intended for 'incorporation into a pump fluid end assembly,'" is, "[a]t its core," a claim for "defining the subject merchandise based on end use." However, the U.S. Court of Appeals for the Federal Circuit has "long held" that end-use restrictions don't apply to AD orders unless the order at issue clearly includes exclusionary language that leaves "no reasonable doubt that certain products were intended to be outside the scope of the AD order based solely on the end use of those products," the court said.

As a result, Commerce routinely uses terms such as "only" or "solely" to indicate end-use restrictions. Meanwhile, in the present order, the agency merely used the term "typically," which "facially contemplates some non-typical uses," Barnett held.

The products at issue are precisely those the Federal Circuit was worried about, since the products "may not be identifiable from 'specifications on the drawing themselves,'" though there may be "some indication from the customer on the drawings as to the intended purpose of the product," the judge said. Thus, Commerce's reliance on the scope language alone was enough to settle whether the contested forged steel products belonged in the normal value calculation, the judge said.

Despite this finding, Barnett also reviewed the exporter's claims regarding the HTS subheadings and ITC report, finding them to be "not persuasive." While Commerce included HTS subheading 8413.91.9055, which describes fluid end blocks under heading 8413, in the order's scope, the scope language also "contemplates subject merchandise consisting of products entered" under various other subheadings, the court noted. BGH doesn't address these other subheadings, making the company's "preferred heading" to not be a basis for "narrowing the requirements for the foreign like product."

Regarding the ITC report, BGH noted language that said fluid end blocks are "steel forgings that are a component of fluid end modules," which are incorporated into hydraulic pumps. Barnett said Commerce's scope is consistent with this definition "insofar as it states that [fluid end blocks] 'are typically used in the manufacture or service of hydraulic pumps.'" The judge added that the attempt to use the ITC report to add an end-use restriction into the order's scope fails, since "end-use restrictions must be clear."

Turning to the forged steel bars made by BGH Lippendorf, Barnett said BGH's attempt to get these products excluded from the normal value calculation also rests on an attempt to add an end-use restriction to the scope.

In an alternative argument, the respondent said Commerce's model-match criteria don't adequately account for the "physical differences in configuration, core compression and other physical and mechanical properties" between BGH Lippendorf's forged steel bars and the subject merchandise. BGH added that its custom military fluid end blocks "have significant differences in physical/mechanical properties" in comparison with subject fluid end blocks, as do its "compounding machine blocks."

Barnett said that BGH failed to raise this issue administratively and, thus, the court rejected it as waived. Commerce has a "long practice" of addressing "model match criteria early in a segment of a proceeding," and the agency can "reasonably reject proposed changes to model-matching criteria when they are made in a case brief -- or even earlier," the court held. So even if BGH proposed model-match changes in its case brief, "Commerce could have reasonably declined to consider them. But BGH did not do so in any case."

Daniel Calhoun, counsel for petitioners led by Ellwood City Forge, said in an email that he's “very pleased by today’s court decision. The clarity with which Chief Judge Barnett resolved the issue of the appropriate universe of home market sales for dumping comparisons in this proceeding portends well for domestic producers of forged steel fluid end blocks going forward.”

(BGH Edelstahl Siegen v. United States, Slip Op. 25-140, CIT # 24-00176, dated 10/22/25; Judge: Mark Barnett; Attorneys: Marc Montalbine of deKieffer & Horgan for plaintiff BGH Edelstahl Siegen GmbH; Kristin Olson for defendant U.S. government; Jack Levy of Rock Creek Trade for defendant-intervenors led by Ellwood City Forge Co.)