On April 19, 2018, the U.S. Department of Commerce issued anti-dumping and countervailing duty orders on certain types of aluminum foil from China.
Buying Aluminum in 2019? Download MetalMiner’s free annual price outlook
Chinese producers appealed the decision, but the U.S. Court of International Trade this month opted to uphold the Commerce Department’s determination.
The Chinese plaintiffs lodging the appeal were: Jiangsu Zhongji Lamination Materials Co., (HK) Ltd., Jiangsu Zhongji Lamination Materials Co., Jiangsu Zhongji Lamination Materials Stock Co. Ltd., and Jiangsu Huafeng Aluminium Industry Co., Ltd.
Zhongji’s appeal focused on five aspects of the Commerce Department’s decision, including: the use of South Africa as the primary surrogate country in the case; using Descartes instead of Xeneta data to value international freight; valuing Zhongji’s aluminum scrap using the incorrect HTS classification; calculating Zhongji’s VAT adjustment “based on the wrong transaction”; and the deferment of the Commerce Department’s decision past the statutory deadline.
Zhongji argued the selection of South Africa as a surrogate country for comparison was not appropriate, claiming South African aluminum foil exports were distorted by subsidies and that Bulgaria’s aluminum foil values were more closely aligned with those of Zhongji.
The court, however, said Zhongji’s arguments did not meet the necessary legal standard.
“The subsidies alleged by Zhongji do not meet the ‘reason to believe or suspect’ standard,” the court stated in its case summary. “When there is evidence of a potential subsidy but Commerce has not previously found the specific program to be countervailable, Commerce does not per se reject the data in question and requires evidence of distortion before it will reject it.”
The court acknowledged that the Commerce Department did in fact submit its determination after both the 140- and 190-day statutory deadlines (the latter used for “extraordinarily complicated” cases).
“All parties agree that Commerce violated even the later deadline, which fell on October 4, 2017, by publishing its preliminary determination in the Federal Register on November 2, 2017,” the court summary states. “However, Commerce’s late filing of a preliminary determination does not preclude it from issuing an affirmative preliminary determination, as precedent dictates that statutory deadlines are not mandatory in the absence of an express statement of consequences from Congress.
“In light of this precedent, the court affirms Commerce’s affirmative preliminary determination and collection of duty deposits notwithstanding the missed deadline.”
Ultimately, Judge Gary S. Katzmann ruled in favor of the Commerce Department.
“The court affirms Commerce’s selection of primary surrogate country and data to value Zhongji’s aluminum foil inputs, as Commerce was within its discretion under 19 U.S.C. § 1677b and Policy Bulletin 04.1 in making those selections based on the evidence in the record,” Katzmann wrote. “Additionally, the court grants Commerce’s request for a remand to recalculate its VAT adjustment using the correct sale price. Finally, the court affirms Commerce’s preliminary determination and collection of duty deposits notwithstanding its violation of the statutory deadline.”
The Commerce Department now must file with the court and provide to the parties a revised determination of its VAT calculation within 90 days.
After the requisite determination is filed and provided to the relevant parties, “the parties shall have 30 days to submit briefs addressing the revised final determination to the court and the parties shall have 15 days thereafter to file reply briefs with the court.”
The Aluminum Association expressed its support for the court’s ruling.
Want to see an Aluminum Price forecast? Take a free trial!
“The Aluminum Association was pleased that the U.S. Court of International Trade affirmed the bulk of the Department of Commerce’s final antidumping determination on certain aluminum foil from China,” said Lauren Wilk, the Aluminum Association’s vice president for policy and international trade. “The court’s decision reinforces the critical role rules play in a functioning global trading system. Targeted trade enforcement – as we’ve seen successfully deployed in the U.S. markets for aluminum foil and common alloy sheet– can have a meaningful and positive impact on U.S. manufacturers.
“The association and its member companies are determined to vigorously defend these orders and are committed to trade enforcement as a tool to address the symptoms of persistent Chinese overcapacity in the aluminum industry, which is impacting the entire value chain.”
Before we head into the Labor Day weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner:
