Background
Baroque Timber Industries (Zhongshan) Co., Ltd. and its cross-owned affiliate, Riverside Plywood Corporation, challenged the Commerce Department’s remand redetermination in the tenth administrative review of the countervailing-duty order on multilayered wood flooring from China. The review covered calendar year 2020.
The dispute concerned two parts of Commerce’s analysis. First, Commerce calculated a tier-two benchmark for plywood by averaging grade-specific International Tropical Timber Organization data with broader UN Comtrade data covering multiple plywood grades. Second, Commerce used adverse facts available to treat certain privately owned input suppliers as government authorities after concluding that the Chinese government had failed to provide requested documentation about government or Chinese Communist Party affiliations among the suppliers’ owners, directors, and managers.
In an earlier decision, the court had required Commerce to better explain both the inclusion of the broader trade data and its adverse-inference determination. Commerce maintained both positions on remand, and Baroque again challenged them.
The Court’s Holding
The court sustained Commerce’s plywood benchmark. Commerce reasonably found that the record did not show that including the UN Comtrade data created a distortive benchmark. Although plywood grade affects price, the record did not establish the magnitude of that effect or the grade composition of the Comtrade data. Commerce also reasonably considered wood species: the broader data were more species-specific to Baroque’s eucalyptus plywood purchases, while the ITTO data contained no eucalyptus plywood. Because both datasets provided commercially available world-market prices, Commerce acted consistently with its regulation by averaging them after considering comparability.
The court also upheld Commerce’s findings that the Chinese government withheld requested government documentation and failed to cooperate to the best of its ability. Commerce had expressly requested supporting government records, but the government supplied none, failed to identify alternative government sources, and did not adequately explain its efforts to locate responsive records.
The court nevertheless remanded Commerce’s use of adverse facts available because Commerce had not adequately explained why information obtained from the suppliers themselves—including certifications, biographies, identification documents, and potentially verifiable human-resources records—could not fill the evidentiary gap. Commerce must further explain why only government documentation can establish whether the suppliers were government authorities, address the reliability and relevance of the company information, and reconsider its adverse inference if it cannot support that conclusion. Commerce must file a second remand redetermination within 90 days.
Key Takeaways
- Commerce reasonably averaged the grade-specific ITTO data with the broader UN Comtrade data because the record did not establish material grade-based distortion and the datasets presented different comparability strengths.
- The Chinese government’s failure to provide requested government or CCP records supported Commerce’s findings that information was withheld and that the government did not cooperate to the best of its ability.
- Before an adverse inference based on government noncooperation may collaterally harm a cooperating respondent, Commerce must adequately explain why other reliable information on the record cannot fill the resulting gap.
Why It Matters
The decision reinforces Commerce’s discretion to construct a tier-two benchmark from multiple world-market datasets when its comparability analysis is reasonable and supported by substantial evidence, even if one dataset more closely matches a particular product characteristic.
At the same time, the ruling places limits on adverse inferences that affect cooperating companies because a foreign government failed to provide information. Commerce must examine potentially usable company evidence and articulate why it cannot reliably answer the relevant question rather than dismissing it categorically in favor of unavailable government records.