CIT Overturns 'Troubling' Scope Ruling on AD Duties for Lock Washers
The Court of International Trade recently overturned a Commerce Department scope ruling on whether lock washers found in assemblies are subject to antidumping duties. Commerce had in 2017 found lock washers incorporated into MacLean Power’s pole line hardware were subject to the AD duty order on helical spring lock washers from China, but CIT held that Commerce applied the scope too broadly, and that lock washers imported as part of distinct assembled products aren’t covered by AD duties.
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The imported pole line hardware at issue in the case included clamps and line post studs that were assembled from various pieces of hardware for use in securing wires to utility poles. Commerce had in its scope ruling used logic similar to that used in previous cases on tool boxes, finding the lock washers to be hardware included in the “mixed media” sets.
But the pole line hardware imported by MacLean is not sets of hardware, CIT said. In their condition as imported, the lock washers are part of unique assembled goods and are not intended for any other use than on utility poles. Removal of the lock washers would cause the pole line hardware to no longer function. In contrast, the tool boxes at issue in previous cases would still function as a tool box if the hardware inside was removed, the trade court said.
Nor does the AD duty order on helical spring lock washers mention lock washers assembled into finished goods. Indeed, the tariff schedule headings listed as examples in the scope include those for spring washers and other lock washers, but not a subheading for bolts and washers imported together in the same shipment. “The Order covers washers, not assembled items that include washers, whether those assemblies are pole line hardware, refrigerators, automobiles, or airplanes,” CIT said.
CIT’s decision “sets right a very troubling scope decision,” Larry Friedman of Barnes Richardson said in a blog post. “This is a textbook example of reasoning that leads to absurd results.” Helical spring lock washers can be found in “all manner of mechanical devices. Anywhere there is a reason to ensure tension between a bolt and a surface, you can find a lock washer,” Friedman said. “Commerce's analysis would make all of these assembled [helical spring lock washers] in-scope despite not being the article of commerce entering the U.S.”
(MacLean Power, LLC v. U.S., Slip Op. 19-15, CIT # 17-00265, dated 01/30/18, Judge Restani)