The U.S. Court of International Trade recently determined that the U.S. Department of Commerce is not required to consider the intent or motivations of a company under scrutiny in its “targeted dumping” analysis and affirmed the agency’s antidumping duty finding against a Turkish steel pipe and tube exporter.
Targeted dumping occurs when there is a pattern of U.S. sales prices that differ significantly among purchasers, regions or time periods that cannot be taken into account using the Commerce Department’s normal dumping margin calculation methodologies. For example, high-priced (non-dumped) sales to one U.S. customer could be offsetting low-priced (dumped) sales to another U.S. customer. If targeted dumping is found, the Commerce Department may depart from the statutorily preferred average-to-average comparison methodology and instead calculate dumping margins using an average-to-transaction methodology. In such cases, the weighted average of the normal values are compared to the export prices of individual transactions of the comparable merchandise.
In the case on appeal, the Turkish exporter, Borusan Mannesmann Boru Sanayi ve Tivcaret AS (“Borusan”), argued that Commerce failed to consider the company’s explanation for why its U.S. sales demonstrated a pattern of targeted dumping. The Court, however, rejected Borusan’s argument, finding that there is no provision in U.S. trade law or in the accompanying statement of administrative action to support Borusan’s claim that Commerce is required to consider the reasons underlying a respondent company’s pricing practices. The Court further held that requiring the Commerce Department to examine the various reasons why a pattern of targeted dumping exists within a given time period would add a new element to the targeted dumping analysis that has been specifically rejected by the Federal Circuit.
There has been increasing contention regarding Commerce Department’s use of targeted dumping. In December 2013, China filed a dispute at the World Trade Organization (WTO) regarding the United States’ antidumping measures, including the targeted dumping practice. A dispute settlement panel has been established and will soon review the agency’s practice in the context of several antidumping cases related to Chinese products.