Chinese Moulding Provider Fires Back at Department of Commerce

March 11th, 2021 by Drew Vass

After the U.S. International Trade Commission (USITC) voted to issue countervailing duty and antidumping duty (AD/CVD) orders on wood mouldings and millwork products imported from China, one of the producers subject to the orders is firing back with a legal complaint. The ruling followed an investigation through which USITC officials determined that by subsidizing and selling in the U.S. at less than fair values, Chinese companies harmed domestic providers. In a legal complaint filed against the U.S., acting and through the U.S. Department of Commerce (DOC), the plaintiff, Fujian Yinfeng Imp and Exp Trading Co. Ltd., alleges that DOC’s final determination wasn’t lawful or otherwise overstated the company’s antidumping duty margin. The company was among two mandatory respondents listed in DOC’s investigation.

Merchandise involved in the AD/CVD orders includes mouldings and millwork products made of wood (regardless of species), bamboo, laminated veneer lumber (LVL) or wood plus composite materials, in cases where composites make up less than half of the overall composition. Mouldings are defined as those that are continuously shaped, finger-jointed or edge-glued blanks (whether or not re-sawn). As a result of a preliminary determination, ITA instructed U.S. Customs and Border Protection to suspend liquidation of entries for the merchandise involved entered or withdrawn from warehouses effective June 12, 2020.

Because the AD/CVD orders were “nonmarket economy” in nature, DOC didn’t use respondents’ actual cost records, home market sales and financial statements for establishing normal value, the plaintiff says, but instead selected values from surrogate countries. While petitioners argued that Brazil should be the primary surrogate, officials for Fujian Yinfeng argued that Malaysia be used instead, submitting a surrogate value record from that country. “The record as a whole did not support the selection of Brazil as the primary surrogate because there was better quality data available in Malaysia,” the company writes in its complaint. The submission was rejected by DOC on the basis that the Malaysian record had deficiencies, officials for Fujian Yinfeng say, including a lack of Global Trade Atlas (GTA) data and contemporaneous financial statements. But the Malaysian record “had no such deficiencies,” the plaintiff alleges.

On January 5, 2021, the company also filed a ministerial error allegation, alleging that DOC was incorrect regarding its definition of a Brazilian and Malaysian harmonized tariff schedule (HTS) for sawnwood inputs. “The Brazilian HTS covers wood sawn lengthwise, chipped lengthwise, sliced or peeled,” the complaint alleges, adding, “The Malaysian HTS specifically covered only wood that is sawn lengthwise, and specifically excluded sliced or peeled and other woods.” According to the complaint, DOC “agreed it made a ministerial error with regard to certain minor expenses,” while claiming that the HTS definition error wasn’t clerical in nature. As a result, DOC “did not reconsider its determination in that regard,” company officials say.

In its complaint, Yinfeng requests that the court deem DOC’s selection of Brazil as the primary surrogate “unsupported by substantial evidence,” along with the resulting surrogate values for sawnwood and financial statements. The company is suing to be removed from the AD/CVD order.

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