Background
The case arose from the Commerce Department’s administrative review of the antidumping duty order covering circular welded carbon-quality steel pipe from the United Arab Emirates for December 1, 2020, through November 30, 2021. Commerce treated Universal Tube and Plastic Industries, THL Tube and Pipe Industries, and KHK Scaffolding & Formwork as a single respondent and initially assigned the entity a 2.63% weighted-average dumping margin.
In an earlier decision, the Court of International Trade directed Commerce to reconsider or better explain why it used same-quarter comparisons when calculating costs and margins but compared prices across quarters in its differential-pricing analysis. After the Federal Circuit’s decision in Marmen Inc. v. United States required Commerce to abandon the Cohen’s d test for data sets like those at issue, Commerce developed a three-step analysis consisting of a new price-difference test, a ratio test, and a meaningful-difference test. On second remand, that analysis produced a 3.64% weighted-average dumping margin for Universal.
The Court’s Holding
The court sustained Commerce’s use of same-quarter comparisons in its margin calculations alongside inter-quarter comparisons in its differential-pricing analysis. It accepted Commerce’s explanation that fluctuating production costs can distort comparisons involving normal value and therefore justify same-quarter cost and sales comparisons, while the initial differential-pricing inquiry compares only U.S. prices and does not calculate margins or use normal value. Inter-quarter price comparisons could therefore serve as an initial indicator of possible masked or targeted dumping without creating the cost-related distortion addressed by the same-quarter methodology.
The court also upheld Commerce’s revised three-step differential-pricing framework as reasonable and lawful. It sustained the new price-difference test’s 2% threshold, Commerce’s use of the ratio test and its more-than-33% cutoff after discontinuing the mixed method, and the meaningful-difference test. Because 95.71% of the value of Universal’s U.S. sales passed the price-difference test and the average-to-transaction method produced at least a 25% relative change from the average-to-average margin, Commerce permissibly used the average-to-transaction method and calculated a 3.64% margin.
Key Takeaways
- Commerce may use same-quarter comparisons for cost and margin calculations while comparing U.S. prices across quarters in a differential-pricing analysis when it reasonably explains the distinct purposes of those methods.
- Commerce’s post-Marmen replacement for the Cohen’s d test—a 2% price-difference test followed by a ratio test and a meaningful-difference test—was reasonable as applied here.
- The court sustained Commerce’s second remand redetermination, including its application of the average-to-transaction method and the resulting 3.64% dumping margin.
Why It Matters
The decision approves Commerce’s revised approach to identifying pricing patterns after the Federal Circuit rejected reliance on the Cohen’s d test for data sets like those involved here. It also confirms that Commerce may apply different comparison periods in separate parts of an antidumping analysis when those components address different statutory questions and Commerce provides a reasoned explanation.
For importers and domestic producers, the ruling shows how Commerce’s revised framework can expand use of the average-to-transaction method once more than one-third of sales by value exhibit significant price differences, potentially producing a higher dumping margin than the standard average-to-average method.