Commerce Requests Input on How to Address Distorted Production Costs Affecting Dumping Margin Accuracy

November 17, 2022

A Commerce Department notice forthcoming in the Federal Register provides interested parties until Sunday, December 18, 2022, to provide comments concerning the future of the particular market situation (“PMS”) provision added to the antidumping duty statute in 2015 that enables Commerce to account for distorted production costs in foreign markets. This comment period is likely one of the last opportunities for interested parties to inform Commerce’s practice in calculating accurate dumping margins that account for foreign market distortions in advance of potential formal rulemaking by the agency.

Commerce’s announcement requests comments on three specific issue areas as Commerce considers new regulations:

  • information Commerce should consider in determining if a PMS exists which distorts the costs of production if that information is reasonably available and relevant to the PMS allegation;
  • information Commerce should not be required to consider when determining if a PMS exists, regardless of the PMS allegation; and
  • adjustments which Commerce may make to its calculations when it determines the existence of a PMS, but the record before it does not allow for the quantification of cost distortions.

The “particular market situation” provision has been the subject of substantial legal action before the U.S. Court of International Trade in recent years, and the U.S. Court of Appeals for the Federal Circuit recently issued its first opinion discussing what Commerce must do to apply this provision, NEXTEEL Co., Ltd. v. United States, 28 F.4th 1226 (Fed. Cir. 2022). Commerce’s notice identifies its four main takeaways from that opinion. One signals a narrowing of Commerce’s approach, but the remaining three are susceptible to significantly varying interpretations, making interested party comments all the more imperative.

Cassidy Levy Kent stands ready to advise interested parties as appropriate on how they might respond to Commerce’s request for comments.