The Commerce Department improperly used Cohen's d test to root out masked dumping because the agency violated statistical assmptions inherent to the test, SeAH Steel told the U.S. Court of Appeals for the Federal Circuit in the opening brief of its appeal. While Commerce justified its use of the test because it used a whole population, not a sample, SeAH said the academic literature shows the d test was meant to be used as a measure of effect size only when the data comes from samples with "normal distributions, with roughly equal variance, and a sufficient number of data-points" (Stupp Corp. v. United States, Fed. Cir. # 23-1663).
Differential Pricing Analysis
The Commerce Department uses a differential pricing analysis to detect whether companies are selling goods across different time periods, regions or purchasers in an effort to mask the dumping of their products into the U.S. market. As part of this analysis, the agency will use a statistical test, called the Cohen's d test, to see if the prices of the exporter's U.S. sales vary significantly across region, time period or purchaser. Use of this test as part of the differential pricing analysis has been subject to much litigation, with the primary point of contention being whether Commerce must satisfy basic statistical assumptions such as roughly equal variances and normally-distributed data sets when running the test.
The Commerce Department adequately addressed the U.S. Court of Appeals for the Federal Circuit's concerns over its use of the Cohen's d test as part of its differential pricing analysis to root out "masked" dumping, the Court of International Trade held in a Feb. 24 opinion sustaining use of the test in an antidumping duty investigation.
The Commerce Department's use of the Cohen's d statistical test to carry out its differential pricing analysis in rooting out "masked" dumping violates "well-recognized statistical principles," plaintiff HiSteel Co. argued in an Oct. 17 motion for judgment at the Court of International Trade. Commerce's assertions that certain statistical assumptions typically required of the d test are not relevant since it using the entire population of data and not just a sample "is mathematically dishonest," the brief said (HiSteel Co. v. United States, CIT #22-00142).
The Commerce Department has failed to address the flaws found in the use of the Cohen's d test when using its differential pricing analysis (DPA) to detect "masked" dumping, exporter SeAH Steel Corp. argued in a reply brief at the Court of International Trade. Responding to the U.S.'s argument that SeAH has failed to point to any statistical texts that explicitly address Commerce's claim that it can properly use the test, the exporter said that the burden is on the agency to find supportive texts and not merely rely on the silence of statistical authorities (Stupp Corp. v. United States, CIT #15-00334).
The U.S. Court of Appeals for the Federal Circuit issued its mandate on June 13 in an antidumping case over the Commerce Department's differential pricing analysis. In the case's opinion, the Federal Circuit said that Commerce must reconsider its decision to use a simple average to calculate the pooled standard deviation when using the Cohen's d test in the DPA to target "masked dumping" (see 2204210031). Ruling that Commerce strayed from the statistical literature without a proper explanation, Judges Pauline Newman, Alan Lourie and Richard Taranto said the agency should reconsider whether a weighted average for calculating the Cohen's d denominator is more appropriate (Mid Continent Steel & Wire v. United States, Fed. Cir. #21-1747).
The Commerce Department again defended the use of the Cohen's d test as part of its differential pricing analysis to detect "masked" dumping in remand results filed on May 26 at the Court of International Trade. Responding to the court's order instructing the agency to address questions on the use of the test raised by the U.S. Court of Appeals for the Federal Circuit, Commerce said that the appellate court's chief concern -- that the test as used by Commerce did not satisfy certain statistical criteria -- is not applicable in the present case (Marmen Inc. v. United States, CIT #20-00169).
The Commerce Department stuck by its use of the Cohen's d statistical test as part of its differential pricing analysis to detect "masked dumping" in antidumping proceedings, offering a more detailed explanation of the practice in April 4 remand results submitted to the Court of International Trade. Responding to the U.S. Court of Appeals for the Federal Circuit's remand on the issue, Commerce repeatedly stressed that certain statistical assumptions did not need to be true to properly run the test since the test measures the practical rather than the statistical significance of the data and Commerce has the entire population of data rather than just a sample (Stupp Corp. v. United States, CIT #15-00334).
Antidumping duty respondents Best Mattresses International Company's and Rose Lion Furniture Company's challenge of the Commerce Department's differential pricing analysis should be tossed since the DPA did not injure the plaintiffs, DOJ said in a March 11 brief at the Court of International Trade. Since the DPA ultimately found that no "masked" dumping was occurring, the use of the analysis, which is based on a statistical test called into question by the U.S. Court of Appeals for the Federal Circuit last year, did not give Best Mattresses and Rose Lion any standing to challenge it, the U.S. argued (Best Mattresses International Company v. United States, CIT Consol. #21-00281).