Opinion ID: 2656983
Heading Depth: 2
Heading Rank: 2

Heading: The Wireking Case

Text: Wireking was one of many importers directly affected by the significant change in trade law. The present case was pending in the Trade Court at the time of our remand in GPX I and raised the same constitutional issue as the GPX case. Before the new law was enacted, on July 31, 2008, U.S. producers filed a petition with Commerce and the U.S. International Trade Commission seeking the imposition of antidumping and countervailing duties on imports of certain kitchen appliance shelving and racks 8 GUANGDONG WIREKING HOUSEWARES v. US from China. In response to this petition, Commerce initiated dual duty investigations on August 20, 2008. These antidumping and countervailing duty investigations examined Wireking’s imports from January 1, 2008, to June 30, 2008, and January 1, 2007, to December 31, 2007, respectively. By early 2009, Commerce selected Wireking as a mandatory respondent for both its antidumping and countervailing duty investigations. As a result of these investigations, Commerce issued final antidumping and countervailing duty determinations on July 24 and 27, 2009, respectively. To determine the antidumping margin applicable to Wireking’s imports, Commerce relied on the statutorily prescribed NME analysis: instead of using the actual home market prices for the inputs Wireking used to manufacture its kitchen shelving and racks, Commerce calculated the margin using a higher, “normal value” for the product’s inputs based on market economy values of the inputs. The primary raw material (input) Wireking used to manufacture kitchen shelving and racks was steel wire rod. Accordingly, Commerce used a surrogate, “normal value” of steel wire rod to calculate the home market price of Wireking’s imports. This resulted in an antidumping duty rate equal to 95.99 percent. Commerce also imposed a countervailing duty on Wireking of 13.30 percent. The bulk of this duty can be attributed to the difference between the delivered world market price and what [Wireking] paid for wire rod pro- duced by the [Government of China] during the [period of interest]. . . . [Commerce] divided this by [Wireking’s] total sales during the [period of interest]. On this basis, [Commerce] calculated a net countervailable subsidy rate of 11.76 percent ad valorem for Wire king [as a penalty for the wire rod subsidy it received]. GUANGDONG WIREKING HOUSEWARES v. US 9 J.A. 63 (internal citation omitted). Because the market economy rate used to calculate Wireking’s antidumping duty was unaffected by the government subsidization Wireking received, Wireking contended that the “simultaneous imposition of these special NME [antidumping] measures and market economy [countervailing duty] measures . . . demonstrates the imposition of a double remedy” and was improper. Appellant’s Br. 7. Ultimately, Commerce rejected this argument and imposed a net countervailing duty rate of 13.30 percent on Wireking. Wireking appealed Commerce’s final antidumping and countervailing duty determinations to the Trade Court on October 5, 2009. The Trade Court stayed Wireking’s appeal, pending the outcome of the GPX proceedings. After our decision in GPX II mandated on May 16, 2012, Wireking amended its complaint to include the constitutional challenge to the new legislation. Wireking did not contest Commerce’s application of antidumping duties to Chinese imports; instead, it contested Commerce’s simultaneous imposition of countervailing and antidumping duties, without adjusting for double counting for the same conduct. 2 Wireking contended that, due to this failure to eliminate double counting, 2 Wireking also argued that the “distortion” resulting from the simultaneous imposition of antidumping and countervailing duties without adjustment for double counting affected the required injury determination and were “compounded by the fact that in sunset reviews, under current law, the Department of Commerce always utilizes the [antidumping] and [countervailing duty] margins from the original investigation as the ‘likely’ [antidumping] and [countervailing duty] margins that will exist upon revocation, and the Commission must accept these Commerce findings in its own sunset analysis.” Appellant’s Br. 43. 10 GUANGDONG WIREKING HOUSEWARES v. US the trade remedies were not related and proportional to the harm suffered and, therefore, constituted a penalty and violated the Ex Post Facto Clause. 3 At this stage of the proceedings, Wireking had not established the existence of double counting in this particular case, and if it had occurred, to what extent. The Trade Court granted judgment in favor of the government. It declined to decide whether the new law had a retroactive effect, but found that Commerce’s simultaneous imposition of antidumping and countervailing duties on Wireking was not penal and, therefore, did not violate the Ex Post Facto Clause even if it were retroactive. Guangdong Wireking Housewares & Hardware Co., Ltd. v. United States, 900 F. Supp. 2d 1362, 1370-71 (Ct. Int’l Trade 2013). The Trade Court first explained that “[i]t is well established that trade duties are remedial, not punitive,” and “[t]he specific purpose of [countervailing duty] law is to ‘offset’ the harmful effects of foreign subsidies.” Id. at 1370. The Trade Court then concluded that the new law was not punitive because Wireking failed to show “the absence of an association between the costs imposed and the actual harm done.” Id. at 1371 (internal quotation marks omitted). Wireking timely appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5). We review the Trade Court’s decision of the constitutional question de novo. 3 Wireking also raised other constitutional objections to the 2012 legislation, which the Trade Court rejected. Guangdong Wireking Housewares & Hardware Co., Ltd. v. United States, 900 F. Supp. 2d 1362, 1372-76 (Ct. Int’l Trade 2013). Wireking has abandoned these other constitutional claims on appeal. GUANGDONG WIREKING HOUSEWARES v. US 11