Trade Updates for Week of June 12, 2019

United States Court of International Trade

Court Denies Restraining Order Against Commerce Continuing 1996 ADD Investigation

Before the Court in Confederación de Asociaciones Agrícolas del Estado de Sinaloa, A.C. et. al. v. United States et. al., Slip Op. 19-69, Court No. 19-00059 (June 6, 2019) was plaintiff’s motion for a temporary restraining order against (“TRO”) and preliminary injunction (“PI”) “to enjoin Commerce from (1) ordering a suspension of the liquidation of entries of fresh tomatoes from Mexico, (2) resuming its antidumping investigation into those tomatoes, and (3) instructing the U.S. Customs … to require a cash deposit or bond for each entry of those tomatoes.” Id. at 4. In 1996, Commerce initiated the investigation in question, and the U.S. International Trade Commission (“ITC) issued an affirmative preliminary injury determination. “On the same day, Commerce signed an agreement with producers, who accounted for substantially all imports of fresh tomatoes from Mexico, and suspended the antidumping duty investigation.” Id. at 3. The agreement was renewed for twenty three years, but was suspended by Commerce in 2019, resulting in the agency intending to resume the investigation. For the following reasons the Court denied plaintiffs motion for a TRO and injunction.

“The court considers four factors when evaluating whether to grant a temporary restraining order or preliminary injunction: (1) whether the party will incur irreparable harm in the absence of such injunction; (2) whether the party is likely to succeed on the merits of the action; (3) whether the balance of hardships favors the imposition of the injunction; and (4) whether the injunction is in the public interest.” Id. at 10. The Court said “because Commerce is required to take each of the actions challenged by Plaintiffs following an affirmative preliminary determination” and it was within Commerce’s ability to withdraw from the agreement plaintiffs were not likely to succeed on the merits. Although the Court acknowledged “the potential disruptions to the fresh tomato market and supply chain,” “Plaintiffs’ evidence fails to meet the high burden required to show irreparable harm.” Id. at 24. The Court said the “issuance of the requested relief in an injunction would suspend the effect of the statute in this matter,” resulting in the hardships of this issue falling onto the Government. Finally, the Court said the public interest in the manner was neutral and because three of the four factors favored the defendant the TRO and PI were denied.

Court Sustains Commerce Anticircumvention Determination

Before the Court in Tai-Ao Aluminium (Taishan) Co. et. al. v. United States et. al., Slip Op. 19-70, Court No. 17-00216 (June 7, 2019) was a challenge to Commerce’s scope interpretation in an anticircumvention investigation of Tai-Ao Aluminum Company and Regal Ideas, Inc., importers of heat-treated 5050-grade aluminum extrusions from China. Commerce had previously issued antidumping and countervailing duty orders on extrusions made from aluminum alloys with the Aluminum Association designations of series 1xxx, 3xxx, and 6xxx.

The order specifically excluded series 5xxx. Commerce determined, pursuant to an anticircumvention inquiry, that imports of 5050-grade extrusions exported were later-developed merchandise circumventing the orders and ordered Customs to suspend liquidation on heat-treated 5050-grade extrusions retroactive to the initiation of the anticircumvention inquiry.

Plaintiffs contend that Commerce’s determination was unsupported by substantial evidence They also argued the anticircumvention inquiry’s initiation notice did not provide adequate notice to all Chinese exporters. For the following reasons the Court sustained Commerce’s anticircumvention determinations but concluded that retroactive suspension of liquidation was impermissible.

“When determining whether a product is later-developed, Commerce considers whether the merchandise was commercially available at the time the order was issued.” Id. at 4. The court said the record supported Commerce’s commercial availability determinations because “industry catalogs contained in the record did not offer the 5050-grade alloy as an alternative to the series 6 alloy until after the Orders were issued and an importer stated that heat-treated 5050-grade extrusions were developed after the Orders were issued for the purpose of replacing in-scope merchandise” Id. at 13. In regards to the retroactive suspension of liquidation and notice issue, “What the statutory and regulatory notification provisions require is that any reasonably informed party should be able to determine, from the published notice of initiation read in light of announced Commerce Department policy, whether particular entries in which it has an interest may be affected by the administrative review.” Id. at 18-19. The Court said “the language in the Initiation Notice here was not sufficient to provide Chinese exporters of heat-treated 5050-grade extrusions other than the named company with reasonable notice, and “liquidation should have been suspended from the date of the Preliminary Determination when Plaintiffs first received notice that their products were subject to the anticircumvention inquiry.” Id. at 20.