Quartz Importers Abandon Challenges to Lawfully Imposed AD/CVD Duties
WASHINGTON — In a win for the U.S. domestic quartz manufacturing industry, MS International (MSI), one of the largest U.S. importers of quartz surface products (QSP), is abandoning its challenges to the antidumping duty and countervailing duty (AD/CVD) orders on QSP from China and Turkey, and the CVD order on QSP from India. As a result, there are no standing legal challenges remaining against the lawfully imposed AD/CVD orders on QSP from all three countries. Consequently, there is no question that these orders will remain in place, and U.S. importers will have to pay the AD/CVD duties.
However, recent actions by the U.S. Department of Commerce are raising significant concerns about whether Commerce is properly enforcing U.S. law and taking action against illegal trade activity. Commerce assigned a 323.13% dumping rate to Antique Group—one of the two largest Indian exporters of QSP. However, after assigning a 161.56% dumping rate to 51 other Indian exporters in its preliminary decision, Commerce wrongly lowered this rate to a mere 3.19% in its final determination. This error is being challenged by the U.S. Court of International Trade (CIT) for being calculated in a way that is inconsistent with U.S. law. If the challenge is successful, the rate for the additional 51 Indian companies could increase up to a total of 161.56%.
“The Commerce Department, through numerous and extensive investigations, has made it clear that importers are illegally bringing in dumped quartz surface products to the detriment of American manufacturers and workers,” said Zach Mottl, Chairman of CPA. “The fact that MSI is abandoning its frivolous challenge to lawfully imposed AD/CVD orders on quartz surface products is a win for the U.S. domestic quartz manufacturing industry. Foreign competitors in China, Turkey, and India have used illegal trade activity to try and put American manufacturers, and the tens of thousands of American workers they employ, out of business.
“However, Commerce’s backtracking on its preliminary 161% dumping rate for 51 other Indian companies that are engaging in illegal trade activity to a mere 3.19% rate is deeply concerning,” continued Mottl. “It is clear that this rate was calculated in a way that is inconsistent with U.S. law, and we expect the challenge at the CIT to be successful. Congress and the Biden administration must remain vigilant, and ensure that U.S. trade law is robustly enforced against illegal activity by foreign producers and importers.”
Background
In April of 2018, the U.S. domestic QSP industry filed petitions alleging illegal trade activity from China. The following year, after importers such as MSI rapidly shifted to importing from India and Turkey, the domestic industry filed petitions against illegally traded imports from those two countries. To file AD/CVD petitions, there must be support from a majority of the domestic industry. In each of the investigations involving China, India, and Turkey, MSI claimed that the petitions lacked the requisite industry support. MSI’s challenges hinged on the claim that fabricators are “producers” of QSP and that, because the petitions failed to include fabricators as part of the domestic industry, they failed to show sufficient support for its petitions.
After the Commerce Department rejected these challenges, MSI appealed to the U.S. Court of International Trade (CIT). The CIT stayed the challenges to the AD/CVD orders on China and Turkey and the CVD order on India and focused on the AD order from India, ultimately finding that there was sufficient support from the domestic industry for the petition. MSI further appealed this decision to the U.S. Court of Appeals for the Federal Circuit.
In January 2023, the Federal Circuit affirmed the CIT’s decision. In its opinion, the Federal Circuit affirmed Commerce’s interpretation of the term “producers” as an entity that has sufficient production-related activities such that it has a stake in the domestic industry. The Federal Circuit upheld Commerce’s determination that fabricators are not producers based on the significant differences between QSP slab producers and fabricators in the level of complexity and capital investment, employment, training and technical expertise, production processes, and type of equipment used.
After the Federal Circuit’s ruling, MSI has now notified the CIT that it intends to abandon all further legal challenges of the AD/CVD orders. As a result, there are no further challenges in the courts to the AD/CVD orders on QSP from China, India, or Turkey. This means that all AD/CVD orders will remain in place, and imports of QSP from these countries will continue to be subject to the payment of AD/CVD duties at the rates established by Commerce.
U.S. Commerce Department Actions Regarding Illegally Dumped Quartz Surface Products
In January 2023 after a two-year administrative review, the Commerce Department assigned a dumping rate of 323.13% to Antique Group—one of the two largest Indian exporters of quartz surface products (QSP). Commerce assigned this high rate due to Antique Group’s failure to provide a timely response to Commerce’s requests to correct numerous deficiencies and problems in the company’s sales and cost information.
Commerce assigned a lower rate of 3.19% to 51 other Indian exporters, including MSI. However, that low rate has been challenged at the U.S. Court of International Trade for being calculated in a way that is inconsistent with U.S. law. If the challenge at the court is successful, the rate for these other 51 companies could increase up to a total of 161.56%.
Commerce is also conducting another administrative review covering imports from India from April 2021 through May 2022. This review could also result in higher rates for Indian producers and exporters of QSP.
