2019 CIT 7
Ct. Intl. Trade2019Background
- Commerce completed the 2012–2013 antidumping administrative review for Chinese off‑the‑road (OTR) tires, assigning GTC a margin ~11% and the PRC‑wide entity (including Double Coin) 105.31%; Double Coin had data supporting a 0.14% individually calculated margin.
- The Court of International Trade (CIT) in CMA I found several Commerce determinations contrary to law and ordered a remand; Commerce issued a Remand Redetermination under protest, assigning Double Coin a 0.14% de minimis margin and slightly adjusting GTC’s margin to 11.33%.
- Key contested issues on remand: (1) whether Commerce lawfully deducted irrecoverable Chinese VAT from U.S. price (EP/CEP), (2) whether Commerce double‑counted certain brokerage/handling and freight charges in surrogate value calculations, and (3) whether Commerce may revisit Double Coin’s margin in light of the Federal Circuit’s Diamond Sawblades decision.
- On remand Commerce made an inflation adjustment to GTC’s warehouse surrogate value and found Shanghai Port Charges were double counted; those two determinations were uncontested and sustained by the CIT.
- The CIT held Commerce’s VAT deductions unlawful as a matter of statutory interpretation and lack of evidentiary support, remanded the VAT and double‑counting determinations for further consideration, and denied the U.S. government’s motion for a partial voluntary remand concerning Double Coin’s margin.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legality of Commerce’s downward EP/CEP adjustment for Chinese irrecoverable VAT | GTC: VAT deductions were unauthorized by 19 U.S.C. § 1677a(c)(2)(B) and unsupported by record evidence | Commerce/US: irrecoverable VAT functions like an export charge warranting a downward adjustment | Held: VAT deduction unlawful—statute and legislative history do not permit treating irrecoverable VAT as an export tax; Commerce must remove VAT adjustments and lacked record support for treating VAT as a charge not imposed on domestic sales |
| Double counting of brokerage & handling vs. ocean freight and U.S. inland freight | GTC: multiple surcharge categories in Descartes quotes overlap with Doing Business categories; Commerce double counted costs | Commerce: most contested charges are post‑ocean or U.S. destination charges and/or encompassed by its "fully‑loaded" freight surrogate | Held: Commerce’s conclusion that only Shanghai Port Charges were double counted is not supported by substantial evidence; CIT remands for Commerce to reconsider double counting (including overlap with U.S. inland freight) and address GTC’s objections to new record evidence |
| Whether Commerce may seek partial remand to revisit Double Coin’s assigned 0.14% margin in light of Diamond Sawblades | Double Coin: CIT’s order requiring assignment of the individual 0.14% margin must be respected; remand would be inefficient and impermissible now | Gov’t: Diamond Sawblades is intervening authority that may affect validity of assigning Double Coin a de minimis margin; Commerce should be allowed to reconsider | Held: Motion denied. Even applying Diamond Sawblades, the only non‑AFA rate Commerce could reasonably assign to the PRC‑wide entity on the record is the 0.14% derived from Double Coin’s cooperating data; remand would serve no purpose |
| Inflation adjustment to GTC warehouse SV and Shanghai Port Charges double‑counting (uncontested) | GTC: requested inflation adjustment; challenged some double‑counting elements | USW/Petitioners: supported VAT deductions and some double‑counting findings | Held: CIT sustains Commerce’s inflation adjustment to warehouse surrogate value and its finding that Shanghai Port Charges were double counted (these determinations were uncontested) |
Key Cases Cited
- Diamond Sawblades Mfrs. Coal. v. United States, 866 F.3d 1304 (Fed. Cir. 2017) (addresses assignment of PRC‑wide rate to cooperating mandatory respondent that fails to rebut presumption of government control)
- Qingdao Qihang Tyre Co. v. United States, 308 F. Supp. 3d 1329 (Ct. Int’l Trade 2018) (interprets § 1677a(c) and concludes VAT should not increase dumping margins)
- SKF USA Inc. v. United States, 254 F.3d 1022 (Fed. Cir. 2001) (standards for agency requests to remand to consider intervening authority)
- Changzhou Wujin Fine Chem. Factory Co. v. United States, 701 F.3d 1367 (Fed. Cir. 2012) (adverse facts available (AFA) and principle that applying AFA to cooperating respondents undermines statutory goals)