The U.S. Court of International Trade has issued a significant ruling regarding the countervailing duties imposed on multilayered wood flooring imports from China. This decision affects Baroque Timber Industries (Zhongshan) Co., Ltd. and Riverside Plywood Corporation, who challenged the U.S. Department of Commerce's calculations in their tenth administrative review. The court's ruling, made on October 20, 2026, sustains some of Commerce's determinations while sending others back for further review.
The case, identified as Court No. 23-00136, revolves around the countervailing duty order on multilayered wood flooring from China for the period of January 1 to December 31, 2020. The plaintiffs, Baroque Timber and Riverside Plywood, contested the Department of Commerce's methods for calculating benchmark prices for plywood and the application of adverse facts available (AFA) in determining whether their input suppliers are government authorities.
Baroque Timber and Riverside Plywood are companies involved in the manufacturing and distribution of multilayered wood flooring. The dispute arose during the tenth administrative review of the countervailing duty order, where the Department of Commerce was tasked with assessing whether the companies received unfair subsidies from the Chinese government. The case reached the Court of International Trade after the plaintiffs raised concerns about the calculations and determinations made by Commerce.
In its ruling, the court addressed two main issues: the calculation of the benchmark price for plywood and the use of AFA to classify certain input suppliers as government authorities. The court found that Commerce's decision to average data from the UN Comtrade database with data from the International Tropical Timber Organization (ITTO) in calculating the plywood benchmark was supported by substantial evidence. The court stated, "the record evidence does not support a conclusion that the [UN Comtrade] data result in a distortion of the benchmark price applied to Baroque’s purchases." Judge Timothy M. Reif presided over the case.
However, the court also noted that Commerce did not adequately explain why non-government information could not fill the gaps in the record before applying AFA against the plaintiffs. The court remanded this aspect back to Commerce for further clarification and action. The ruling indicates that while some aspects of Commerce's determinations were upheld, others require additional scrutiny.
This ruling has significant implications for the future of countervailing duties on wood flooring imports from China. It highlights the importance of accurate data and transparency in the calculation of benchmark prices and the classification of suppliers. The decision may influence how Commerce approaches similar cases in the future, particularly regarding the use of AFA and the assessment of foreign subsidies.
The impact of this ruling extends beyond just the involved parties. It sets a precedent for how benchmark prices are calculated in future countervailing duty cases and emphasizes the need for thorough documentation and cooperation from foreign governments in responding to inquiries from U.S. authorities. Companies involved in international trade, particularly those dealing with products subject to countervailing duties, will need to pay close attention to the outcomes of such cases.
As for what comes next, the case may still be appealed depending on the final determinations made by Commerce following the remand. The court's decision leaves open the possibility for further legal challenges based on how Commerce responds to the issues raised in the ruling. The ongoing scrutiny of countervailing duties and trade practices will likely continue to evolve as more cases are brought before the courts.