Changzhou Trina Solar Energy Co. v. United States
352 F. Supp. 3d 1316
Ct. Intl. Trade2018Background
- This is a CIT challenge to Commerce’s Final Results in the 2014 countervailing-duty administrative review of crystalline silicon photovoltaic cells from the PRC; Commerce assigned subsidy rates to Canadian Solar, Trina, and non-selected companies.
- Commerce applied adverse facts available (AFA) (in part because the GOC refused some questionnaire requests) to find use of the Export Buyer’s Credit Program (EBCP) and to address alleged electricity subsidies and polysilicon issues.
- Commerce used an AFA-based benchmark rate for the EBCP drawn from a different program (Lightway) in an earlier review.
- Commerce treated provision of aluminum extrusions, solar glass, and polysilicon as provided for less-than-adequate remuneration (LTAR), using world-market (tier-two) benchmarks that averaged IHS and UN Comtrade datasets and added international freight and VAT adjustments.
- Plaintiffs (Canadian Solar, Trina, BYD) contest Commerce’s use of AFA against cooperating respondents, the choice and composition of benchmark datasets (Comtrade vs IHS), resort to tier-two benchmarks for polysilicon, and Commerce’s specificity findings (aluminum, electricity).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Use of AFA for EBCP against cooperating respondents | Plaintiffs: certifications of non-use and respondent documents sufficed; GOC’s refusal did not justify AFA against cooperating firms. | Gov/SolarWorld: GOC withheld critical info on third‑party bank involvement; AFA appropriate and may impact cooperators when government refuses to cooperate. | Remanded: Commerce failed to explain specifically what GOC data was missing and why respondent evidence was unverifiable; must justify AFA linkage to findings. |
| Choice of adverse rate for EBCP (Lightway Program) | Canadian Solar: Lightway is insufficiently similar; a more comparable Export Seller’s Credit Program existed on the record. | Commerce: follows statutory hierarchy and discretion to select a similar program from prior proceedings; Lightway is a loan program so acceptable. | Sustained: Commerce acted within its discretion in selecting Lightway rate under its AFA methodology. |
| Specificity of aluminum extrusions (de facto specificity) | Canadian Solar: Six broad industry categories are too diverse; Commerce must assess whether those categories represent a large portion of Chinese industry. | Gov/SolarWorld: Record shows recipients limited in number; prior analysis supports specificity. | Remanded: Commerce must explain why the six categories are sufficiently limited (considering subindustry breadth) and justify specificity analysis. |
| Benchmark data for aluminum extrusions (IHS vs Comtrade) | Plaintiffs: IHS is specific to solar-module frames; Comtrade HTS baskets are overinclusive — averaging produces unreliable benchmark. | Commerce/SolarWorld: Preference for monthly data (Comtrade) supports averaging with IHS; averaging permitted. | Remanded: Commerce failed to address comparability flaws in Comtrade and must either rely on IHS alone or justify inclusion of Comtrade. |
| Benchmark for solar glass (IHS vs Comtrade) | Plaintiffs: Comtrade HTS headings include many non-solar flat glasses; Comtrade underincludes some solar-glass producers and may create spurious monthly volatility. | Commerce/SolarWorld: Monthly data preferable to capture fluctuations; averaging is reasonable. | Remanded: Commerce did not adequately assess whether Comtrade’s over/underinclusiveness fatally undermined the average; instructed to use IHS alone or explain rationale. |
| Polysilicon: use of tier‑two instead of tier‑one benchmark | Canadian Solar: All polysilicon purchases were arms‑length imports from market-economy suppliers — should be tier‑one. | Commerce/SolarWorld: Domestic market distortion justifies resort to tier‑two; imports could be distorted by Chinese market. | Remanded: Commerce must explain why import transaction data are unreliable given market‑distortion finding or accept respondent import data as tier‑one. |
| Inclusion of international freight and VAT in benchmarks | Canadian Solar: Freight/VAT inflate benefit and should not be added (VAT is indirect and later recouped). | Commerce/SolarWorld: Benchmark must reflect delivered price and prevailing market conditions (transport, duties, VAT). | Sustained: Court upheld inclusion of international freight and VAT as appropriate adjustments under the regulation. |
| Electricity subsidy: use of AFA and benchmark selection | Plaintiffs: Commerce failed to identify missing record facts and did not analyze specificity or geographic application; cannot simply adopt AFA conclusions. | Commerce: GOC withheld regional pricing info; AFA and use of highest provincial rates are reasonable to approximate distorted market rates. | Remanded: Commerce must explain precisely what was missing, how adverse inferences lead to a specificity finding, and justify benchmark choice if subsidy is sustained. |
| Golden Sun Demonstration Program attribution | Canadian Solar: GSDP subsidized electricity generation, not solar‑cell production; attribution to total sales is improper. | Commerce: Untied subsidy is attributed by stated purpose at bestowal and may properly be allocated to total sales including cells. | Sustained: Commerce reasonably attributed untied GSDP benefits to total sales based on program purpose at bestowal. |
Key Cases Cited
- Nippon Steel Corp. v. United States, 337 F.3d 1373 (Fed. Cir.) (standard for AFA: failure to cooperate to best of ability)
- Changzhou Trina Solar Energy Co. v. United States, 195 F. Supp. 3d 1334 (Ct. Int’l Trade) (upholding AFA re: EBCP in prior review; discussed by court)
- Guizhou Tyre Co. v. United States, 2018 WL 5307676 (CIT) (discussed in opinion; not included as a reported citation)
- Archer Daniels Midland Co. v. United States, 917 F. Supp. 2d 1331 (Ct. Int’l Trade) (agency should avoid adverse impact on cooperating parties where record alternatives exist)
- Solar Americas, Inc. v. United States, 229 F. Supp. 3d 1362 (Ct. Int’l Trade) (Commerce’s AFA selection hierarchy explained)
- Essar Steel Ltd. v. United States, 678 F.3d 1268 (Fed. Cir.) (tiered benchmark framework and freight adjustment precedent)
- Fine Furniture (Shanghai) Ltd. v. United States, 865 F. Supp. 2d 1254 (Ct. Int’l Trade) (consideration of respondent‑placed benchmarks and avoiding collateral harm to cooperators)
- Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345 (Fed. Cir.) (Commerce must base decisions on the record of the review)
- Inland Steel Indus., Inc. v. United States, 188 F.3d 1349 (Fed. Cir.) (court will not substitute its judgment for reasonable agency methodology)
- TMK IPSCO v. United States, 222 F. Supp. 3d 1306 (Ct. Int’l Trade) (Maersk freight quote data acceptable as benchmark source)