Respondent Contests Use of 'Zeroing' in AD Investigation on Ferrosilicon
The Commerce Department unlawfully used "zeroing" in calculating respondent YDD Corporation's antidumping margin in the AD investigation on ferrosilicon from Kazakhstan, YDD argued in a Nov. 7 motion for summary judgment at the Court of International Trade. The respondent said Commerce has a "long-established practice of not using zeroing," yet the agency "departed from this practice" when calculating the company's AD rate "without providing any explanation for this change in practice" (YDD Corporation v. United States, CIT Consol. # 25-00100).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
YDD added that the agency's "interpretation of the statutory text by which it continues to use zeroing is unlawful" in light of the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, in which the high court said courts, and not federal agencies, are responsible for identifying the "best" reading of a statute.
"Zeroing" is the practice of setting negative dumping margins "(i.e., those individual sales in which the margins are above normal value and are therefore not dumped)" to zero instead of aggregating them with the positive dumping margins, thus "offsetting" positive margins with negative margins, YDD explained. Commerce used to routinely engage in this practice until the World Trade Organization found it to be a violation of the U.S. government's WTO commitments.
However, upon assuming office, President Donald Trump issued a memo, telling the commerce secretary to review the prospect of reinstating the practice of zeroing (see 2501280067). Following this memo, the agency used the zeroing approach in the present AD investigation, which led to a 6.01% AD rate for YDD.
Now before the trade court, the respondent said Commerce illegally bucked its long-established practice of not using zeroing without explanation.
In the investigation, the agency used the "average-to-average method" for calculating YDD's rate, through which the agency compares the average of the company's U.S. sales prices to the average of the firm's home market sales prices, offsetting "positive comparison results with negative comparison results." However, in the investigation, Commerce used partial adverse facts available against the respondent for its sales to an unnamed customer, setting a specific margin to sales to that customer.
Commerce set the dumping rate for sales not made to this customer to zero, "even though the total was in fact a negative number," the brief said. The agency said it had made a "methodological choice and not a ministerial error."
YDD argued that the use of zeroing here is "excessively punitive," since the average-to-average comparison already offsets low export prices with high export prices "within each averaging group." Through the use of zeroing, non-dumped sales that have already been averaged with lower-priced sales are further discounted, the brief said.
The respondent added that if Commerce actually did make a "methodological choice" here, the agency "failed to explain what that methodological choice was." While the agency said its use of partial AFA to YDD's sales to the unnamed customer led it to set a specific margin for sales to that customer, YDD said this shouldn't have affected its sales to other customers.
In its motion, YDD also challenged Commerce's inclusion of sales that were "destined for Canada" in its calculation of the company's dumping margin and the agency's use of partial AFA against its sales to the unnamed customer.
Another respondent in the investigation, TNC Kazchrome, filed its own motion in the consolidated case, contesting Commerce's use of the shipment date as the date of sale for the company's U.S. sales despite the agency itself identifying a "later date that controlled all material terms between the foreign producer and the sole U.S. customer." Alternatively, the respondent challenged the agency's decision to ignore its preliminary finding that the date of "title transfer" was the "date on which material terms were final and all such dates and verifying records were submitted and fully validated."