Timken Co. v. United States

Pursuant to United States statute, the United States Department of Commerce (the department) (plaintiff) established rules that regulated international goods sold in the United States at below fair market value, a practice known as dumping. Absent such rules, the practice of dumping could harm domestic industry. The department’s rules offset any advantage the international manufacturer gained through dumping by charging a special duty. The amount of the duty was based on “dumping margins” that the department established. If the dumping margin of a product was negative, the department zeroed it out for purposes of calculating the duty. The department opened an investigation into sales of tapered roller bearings from Japan by Koyo Corporation of U.S.A. (Koyo) (defendant). The department used its formula based on dumping margins to calculate a duty charged to Koyo. Koyo challenged the duty, arguing, among other things, that the World Trade Organization (WTO) Appellate Body had issued a decision holding that zeroing out a dumping margin violated the WTO’s Anti-Dumping Agreement. That decision was based on an international dispute between India and the European Community. The United States Court of International Trade affirmed the department’s decision, finding the decision to be a reasonable interpretation of the domestic statute and finding the WTO’s decision not binding. Koyo appealed.