TRADE REMEDIES | 2026-10-30

Zeroing in Antidumping Margin Calculations: How Commerce Computes Dumping Margins and Why Zeroing Was Largely Abandoned

“Zeroing” — treating non-dumped sales as zero rather than letting them offset dumped sales — once inflated the antidumping margins California importers paid. After adverse WTO rulings and Federal Circuit decisions in Dongbu and Union Steel, Commerce abandoned zeroing in most proceedings, though it survives in the targeted-dumping context. Understanding the comparison methodology under 19 U.S.C. §1677f-1(d) is essential to challenging an unfair margin.

An antidumping duty is supposed to measure, and offset, the amount by which a foreign producer sells merchandise in the United States below its normal value — the “ dumping margin .” For years, the U.S. Department of Commerce computed that margin using a practice called “zeroing,” under which sales

For an importer paying antidumping duties, the single number that matters most is the dumping margin — the percentage applied to the customs value to compute the duty. How Commerce calculates that margin, and in particular whether it allows non-dumped sales to offset dumped ones, can change the duty dramatically. This guide explains normal value and export price, the comparison methodologies, what zeroing is and why it inflated margins, the litigation that curtailed it, and what all of it means for importers.

What an Antidumping Margin Measures

Dumping occurs when a foreign producer sells merchandise in the United States at a price lower than the price (or constructed cost) in its home market. The dumping margin is the amount by which the normal value exceeds the export price (or constructed export price), expressed as a percentage of the export price. Commerce compares many individual U.S. sales against normal value, then aggregates the results into a single weighted-average dumping margin for the producer, defined in 19 U.S.C. §1677(35). The antidumping duty is designed to offset that margin. Because the margin is an aggregate of many comparisons, the rule for how individual results are combined — and whether negative results (non-dumped sales) count — determines the final number.

Normal Value and Export Price

Normal value is ordinarily the price at which the foreign producer sells the like product in its home market in the ordinary course of trade; if home-market sales are inadequate or below cost, Commerce uses third-country sales or a constructed value built from the cost of production plus selling expenses and profit. Export price is the price at which the merchandise is first sold to an unaffiliated U.S. buyer; constructed export price is used when the first sale is through an affiliated U.S. reseller, with deductions to arrive at a comparable net figure. Commerce makes numerous adjustments to both sides — for differences in quantities, physical characteristics, levels of trade, movement costs, and selling expenses — so that the comparison measures genuine price discrimination rather than incidental differences.

The Comparison Methodologies Under §1677f-1(d)

19 U.S.C. §1677f-1(d) authorizes three comparison methods. In an investigation, Commerce generally compares a weighted average of normal values to a weighted average of export prices (the average-to-average, or A-to-A, method), or compares normal values to individual export transactions (transaction-to-transaction). There is an exception: if Commerce finds a pattern of export prices that differ significantly among purchasers, regions, or time periods (so-called targeted dumping), and the standard method cannot account for it, Commerce may compare a weighted-average normal value to individual export transactions (the average-to-transaction, or A-to-T, method). The choice of methodology is where zeroing historically entered the calculation.

What Zeroing Is

Zeroing is the practice of setting to zero the result of any comparison in which the export price is at or above normal value — that is, a non-dumped sale — rather than allowing that negative intermediate result to offset the positive results from dumped sales when the margins are aggregated. Suppose a producer makes some U.S. sales below normal value (dumped) and others above it (not dumped). Without zeroing, the above-normal sales offset the below-normal sales, and the overall margin reflects the net degree of dumping. With zeroing, the above-normal sales contribute nothing (counted as zero), while the below-normal sales contribute their full amount — so the aggregate margin is higher, sometimes dramatically, than the producer’s actual net pricing behavior.

Why Zeroing Inflated Margins

The mathematical consequence of zeroing is a systematic upward bias. A producer whose U.S. prices are, on balance, not below normal value — or only slightly below — could still be assigned a substantial margin, because its non-dumped sales were ignored while its dumped sales were counted in full. For importers, that meant larger cash deposits at entry and larger final duties after review. Critics argued zeroing measured something other than the net price discrimination the antidumping law targets, effectively creating or magnifying margins that a full offsetting calculation would reduce or eliminate. This is why the methodology became one of the most heavily litigated issues in trade law.

The WTO Rulings

The World Trade Organization, in a series of dispute-settlement decisions, repeatedly found that the United States’ use of zeroing — particularly in the average-to-average comparison — was inconsistent with the WTO Antidumping Agreement’s requirement to take into account all comparable export transactions. Although WTO rulings are not directly enforceable in U.S. courts and do not automatically change domestic law, they created sustained pressure on Commerce to conform its practice. The United States ultimately moved, through formal rulemaking and policy changes, to eliminate zeroing in the contexts the WTO had condemned, while continuing to defend it in others.

Dongbu, JTEKT, and the Inconsistency Problem

The domestic turning point came in the Federal Circuit. In Dongbu Steel Co. v. United States (Fed. Cir. 2011) and the related JTEKT Corp. v. United States decision, the court confronted the fact that Commerce was interpreting the same statutory language to permit offsetting (no zeroing) in investigations but to require zeroing in administrative reviews. The court held that Commerce had not adequately explained how the identical statutory text could bear two opposite interpretations, and remanded for a reasoned explanation. These decisions did not themselves outlaw zeroing, but they forced Commerce either to justify the inconsistency or to harmonize its practice.

Union Steel and the Path to Abandonment

In Union Steel v. United States (Fed. Cir. 2013), the Federal Circuit accepted Commerce’s subsequent explanation for treating investigations and reviews differently during a transition, but the broader trajectory was clear: Commerce issued a Final Modification for Reviews in 2012 adopting the average-to-average methodology without zeroing in administrative reviews, mirroring the change it had already made in investigations. The combined effect of the WTO rulings, the Dongbu/JTEKT remands, and the 2012 modification was that Commerce stopped zeroing in the standard average-to-average comparison used in most investigations and reviews. Importers whose margins had been inflated by zeroing saw the methodology replaced by full offsetting.

Where Zeroing Survives: Targeted Dumping

Zeroing was not eliminated everywhere. In the targeted-dumping context — where Commerce applies the average-to-transaction exception because it has found a pattern of significantly different export prices — Commerce has continued to apply a form of zeroing, declining to grant offsets for the non-dumped transactions when using A-to-T. Courts have generally allowed this narrower use, reasoning that the A-to-T exception exists precisely to unmask dumping that the averaging method would hide, and that offsetting would defeat that purpose. For importers, the practical lesson is that the methodology Commerce selects — A-to-A versus A-to-T — can determine whether zeroing applies, which makes the targeted-dumping analysis a frequent battleground.

Why This Matters to California Importers

For a California importer of merchandise subject to an antidumping order, the margin calculation is not an abstraction — it sets the cash-deposit rate collected at entry and the final duty assessed after an administrative review. A margin inflated by an improper methodology means overpayment, sometimes on a large and recurring volume of entries. Importers who participate in administrative reviews — or who rely on producers and exporters that do — have the opportunity to contest the methodology, the adjustments, and the comparison method, and to appeal an adverse result to the Court of International Trade and the Federal Circuit. Understanding how the margin is built is the first step to identifying where it may be wrong.

Participating in a Review to Protect the Rate

Antidumping duties are assessed retrospectively in the U.S. system: the cash deposit at entry is only an estimate, and the final duty is determined in an administrative review covering a period of entries. An importer that does nothing accepts whatever rate the review produces. An importer that participates — directly or through its supplier — can submit data, contest Commerce’s adjustments and comparison methodology, and preserve arguments for appeal. Because the difference between a zeroed and an offset margin can be large, and because the rate carries forward to future entries as the new cash-deposit rate, participation in the review is often the most consequential step an importer can take to control its duty exposure.

Frequently Asked Questions

What is a dumping margin?

It is the amount by which a foreign producer’s normal value exceeds its U.S. export price, expressed as a percentage, aggregated across many sales into a weighted-average dumping margin under 19 U.S.C. §1677(35). The antidumping duty is designed to offset that margin.

What is zeroing?

Zeroing is counting non-dumped sales (where export price is at or above normal value) as a margin of zero instead of letting them offset dumped sales when the margins are aggregated. The result is a higher, upward-biased overall margin than a full offsetting calculation would produce.

Why did zeroing inflate the duties importers paid?

Because it ignored the sales made at or above normal value while counting the below-normal sales in full. A producer whose prices were, on balance, not or barely below normal value could still receive a substantial margin, raising the cash deposits and final duties on the importer’s entries.

What are the comparison methods under §1677f-1(d)?

Average-to-average (weighted-average normal value vs. weighted-average export price), transaction-to-transaction, and — as an exception for a pattern of significantly different export prices (targeted dumping) — average-to-transaction. The method chosen affects whether zeroing applies.

What did Dongbu and Union Steel decide?

In Dongbu Steel Co. v. United States (Fed. Cir. 2011) (with JTEKT), the court held Commerce had not explained why the same statutory text allowed offsetting in investigations but required zeroing in reviews, and remanded. Union Steel v. United States (Fed. Cir. 2013) accepted Commerce’s transitional explanation as Commerce moved to end zeroing in reviews.

Is zeroing still used?

Commerce abandoned zeroing in the standard average-to-average comparison used in most investigations and reviews, following the 2012 Final Modification for Reviews. It has continued to apply a form of zeroing in the targeted-dumping context, where it uses the average-to-transaction method, and courts have generally allowed that narrower use.

How does this affect a California importer?

The margin sets the cash-deposit rate at entry and the final duty after review. A margin inflated by an improper methodology means overpayment across many entries. Importers can contest the methodology in administrative reviews and on appeal to the Court of International Trade and Federal Circuit.

Can an importer challenge the margin calculation?

Yes. By participating in the administrative review and, if necessary, appealing to the Court of International Trade and the Federal Circuit, an importer (or its supplier) can contest Commerce’s normal-value and export-price adjustments, the comparison methodology, and the application of any zeroing in the targeted-dumping context.

The Interaction With Separate and All-Others Rates

Margin methodology also interacts with the rate structure of an antidumping order. Commerce calculates company-specific margins for the mandatory respondents it individually examines, then derives an all-others rate (generally a weighted average of the examined respondents’ rates, excluding zero, de minimis, and facts-available rates) for cooperating producers it did not examine. A methodology that inflates the mandatory respondents’ margins therefore flows through to the all-others rate as well, affecting importers who buy from unexamined producers. Because the rate an importer pays may depend on calculations performed for a different producer, importers benefit from understanding the entire rate architecture, not just their own supplier’s situation, and from coordinating with suppliers who have standing to participate as respondents.

Standard of Review on Appeal

When a margin methodology is challenged, the Court of International Trade reviews Commerce’s determination to decide whether it is supported by substantial evidence and in accordance with law, and the Federal Circuit reviews the trade court’s decision de novo while applying the same standard to Commerce. Commerce receives deference in interpreting the antidumping statute and in its methodological choices, which is why challenges often succeed not by arguing that a different method would be better, but by showing that Commerce failed to explain its choice, acted inconsistently without justification (the core of Dongbu), or made a calculation unsupported by the record. Framing a challenge to fit this standard of review is central to a successful appeal, and it is where experienced trade counsel adds the most value.

How Methodology Flows Into the Per-Entry Assessment Rate

In the U.S. retrospective system, the margin Commerce calculates in a review is converted into an assessment rate applied to the importer’s actual entries during the period of review, and into a new cash-deposit rate for future entries. Whether Commerce offsets non-dumped sales or zeroes them therefore does not stay an abstraction on a spreadsheet — it changes the dollars assessed on every entry the importer made and the deposit it must post going forward. Because an antidumping order can remain in place for many years, with annual reviews, a methodological error that inflates the margin compounds across review periods until it is corrected, and the importer bears the inflated cost on entry after entry. This is why importers and their suppliers treat the methodology as a recurring, high-stakes issue rather than a one-time calculation, and why a successful challenge can produce refunds on past entries and lower deposits on future ones.

Why Pursuing a Methodology Challenge Is Worthwhile

Challenging a margin is demanding, but the payoff can be large and durable. A correction that moves a margin from a double-digit figure driven by zeroing to a far lower offset figure reduces the duty on every entry in the review period and resets the cash-deposit rate for the future. Even in the one context where the law currently permits a form of zeroing — targeted dumping — the predicate findings (a pattern of export prices that differ significantly among purchasers, regions, or time periods, and the inadequacy of the averaging method to account for it) are themselves contestable, and a producer who defeats the predicate defeats the zeroing that rides on it. For a California importer facing a sustained antidumping order, investing in a rigorous administrative review and, where warranted, an appeal is frequently the most effective way to control a cost that would otherwise recur indefinitely, which is why the methodology deserves close attention in every review cycle.

Related Guides

For related reading, see our guide on particular market situation and normal value in antidumping cases and our international trade and customs practice overview. The methodology Commerce uses to build a dumping margin can decide whether an importer overpays for years.

Speak With a California Trade Attorney

If your merchandise is subject to an antidumping order, the margin methodology — including whether zeroing was properly applied — directly affects the duties you pay. Trembach Law Firm advises importers and producers on margin calculation, administrative reviews, and appeals to the Court of International Trade and the Federal Circuit. Call (213) 645-2246 for a consultation. Anatolii Trembach holds an LL.M. and is admitted to the California Bar.

This article provides general information about U.S. antidumping law and is not legal advice. Margin and methodology questions are fact-specific and depend on the record of the particular proceeding. Consult a qualified attorney about your particular situation.

Contact Trembach Law Firm at (818) 514-7680 for a confidential consultation.

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