CP Kelco US, Inc. v. United States, No. 19-1207 (Fed. Cir. 2020)Annotate this Case
The Department of Commerce initiated an antidumping duty investigation and determined that xanthan gum imported from China was sold in the U.S. at less than fair value. Commerce considers China to be a non-market economy country and must “determine the normal value of the subject merchandise on the basis of the value of the factors of production utilized in producing the merchandise . . . . based on the best available information regarding the values of such factors in a market economy country,” 19 U.S.C. 1677b(c)(1). Commerce values factors of production by utilizing “prices or costs of factors of production” from a market economy country.” Commerce chose Thailand as the primary surrogate country for the investigation. In determining Fufeng's duty, Commerce did not value X. Campestris as a factor of production or a direct material input because Fufeng’s costs associated with the maintenance and use of X. Campestris bacteria are similar to those of Thai Ajinomoto’s costs associated with maintaining the bacteria used to produce comparable merchandise (MSG and l-lysine). Commerce found that Fufeng acquired an X. Campestris strain for payment-in-full before the period of investigation, including the right to further grow and exploit the resulting bacteria for the production of xanthan gum. The Trade Court and Federal Circuit upheld the treatment of Xanthomonas as an asset rather than a direct material input.