A recent pair of rulings by the Court of International Trade raises significant questions about the scope of products subject to antidumping and/or countervailing duties and the broader implications for U.S. trade enforcement.
At issue in these cases is whether the Department of Commerce’s interpretation of “subassemblies” aligns with the statutory framework of AD/CVD law. Under current rules, aluminum extrusion components that are attached to form subassemblies are covered by an AD duty order on aluminum extrusions from China but finished goods are not. The CIT identified two key concerns with this approach.
- Overbroad definition of subassemblies. The scope of the order explicitly states that subassemblies are covered but finished goods are excluded. Commerce, in a decision affirmed by a federal appellate court, has taken the position that any imported item intended for incorporation into a downstream product qualifies as a subassembly. The CIT raised a concern that this decision could seem inconsistent with the scope of the order, which explicitly lists windows and doors as examples of finished goods that are not covered.
- Duties on downstream components: Commerce’s interpretation could result in the imposition of AD duties on downstream components that are not themselves sold in the U.S., potentially conflicting with the intent of U.S. trade remedies law.
Although the importers in these cases did not raise these arguments during the underlying DOC proceedings on the scope of the order, the CIT left the door open for future litigation by emphasizing the need for judicial clarification to determine whether the law permits Commerce to routinely assess AD/CVD duties on downstream materials used in finished goods sold in the U.S.
The CIT added that such clarity may be needed in light of the significant problems presented by Commerce’s current interpretation of the order and the limiting principle that the Supreme Court’s decision overturning Chevron deference applies to federal agency interpretations of statutes they are charged to administer.
Copyright © 2025 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.