On March 23, 2021, CIT Judge M. Miller Baker ruled largely in favor of Plaintiff’s motion for judgment on the agency record regarding concerns that labor cost data was compromised by forced labor. The Plaintiff, New American Keg, a domestic manufacturer that called on the U.S. Department of Commerce (DOC) to investigate keg imports in 2018. It claimed it had been pushed to the brink of bankruptcy by foreign competitors.

While the DOC set a 77.13 percent dumping margin for Chinese exporters in 2019, one of the major Chinese exporters, Ningbo Master International Trade Co. Ltd., and two smaller companies, were able to avoid the country rate after being found not to under state-control. Further, after submitting a revised set of financial data, DOC reduced Ningbo’s margin below the de minimis threshold.

New American Keg argued that the DOC made errors in calculating labor costs (by ignoring evidence of child and forced labor) and failed to appropriately verify the updated financial data that allowed Ningbo to escape the 77.13 percent country rate. New American Keg also disagreed with the DOC’s assessment that the two smaller producers were free from Chinese government control, therefore also allowing them to avoid the 77.13 percent country rate.

The March 23 CIT order remanded the following items for further consideration:

  1. Commerce’s decision to rely on surrogate value data from Malaysia to value the labor factor of production in calculating Ningbo Master’s rate
  2. Commerce’s ostensible verification of corrective material submitted by Ningbo Master
  3. Commerce’s decision to grant separate rate status to Guangzhou Ulix Industrial & Trading Co., Ltd.

The CIT also ordered that the case proceeds on the following schedule:

  1. Commerce must file its remand determination on or before 120 days after the date of entry of this opinion and order;
  2. Commerce must file the administrative record on or before 14 days after the date on which it files the remand determination; and
  3. Court will issue a scheduling order after Commerce files the administrative record.

The full order can be found here.

For more information on actions addressing litigation, human rights and forced labor claims, please see our prior posts or contact John Brew, Jeffrey Snyder, Frances Hadfield, Laurel Saito, or Clayton Kaier.