Reference no: EM131662628

Question: Dumping. In response to a petition filed on behalf of the U.S. pineapple industry, the U.S. Commerce Department initiated an investigation of canned pineapple imported from Thailand. The investigation concerned Thai producers of the canned fruit, including the Thai Pineapple Public Co. The Thai producers also turned out products, such as pineapple juice and juice concentrate, outside the scope of the investigation. These products use separate parts of the same fresh pineapple, so they share raw material costs. To determine fair value and antidumping duties, the Commerce Department had to calculate the Thai producers' cost of production and, in so doing, had to allocate a portion of the shared fruit costs to the canned fruit. These allocations were based on the producers' own financial records, which were consistent with Thai generally accepted accounting principles. The result was a determination that more than 90 percent of the canned fruit sales were below the cost of production. The producers filed a suit in the U.S. Court of International Trade against the federal government, challenging this allocation. The producers argued that their records did not reflect actual production costs, which instead should be based on the weight of fresh fruit used to make the products. Did the Commerce Department act reasonably in determining the cost of production? Why or why not?