Al Ghurair Iron & Steel LLC v. United States ( 2023 )

Case: 22-1199 Document: 73 Page: 1 Filed: 04/12/2023
United States Court of Appeals
for the Federal Circuit
______________________
AL GHURAIR IRON & STEEL LLC,
Plaintiff-Appellant
v.
UNITED STATES, UNITED STATES STEEL
CORPORATION, NUCOR CORPORATION, STEEL
DYNAMICS, INC.,
Defendants-Appellees
______________________
2022-1199
______________________
Appeal from the United States Court of International
Trade in No. 1:20-cv-00142-TMR, Judge Timothy M. Reif.
______________________
Decided: April 12, 2023
______________________
ROBERT GOSSELINK, Trade Pacific PLLC, Washington,
DC, argued for plaintiff-appellant.
KELLY GEDDES, Commercial Litigation Branch, Civil
Division, United States Department of Justice, Washing-
ton, DC, argued for defendant-appellee United States. Also
represented by BRIAN M. BOYNTON, CLAUDIA BURKE,
MOLLIE LENORE FINNAN, PATRICIA M. MCCARTHY; ELIO
GONZALEZ, Office of the Chief Counsel for Trade Enforce-
ment and Compliance, United States Department of Com-
merce, Washington, DC.
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2 AL GHURAIR IRON & STEEL LLC v. US
THOMAS M. BELINE, Cassidy Levy Kent (USA) LLP,
Washington, DC, for defendant-appellee United States
Steel Corporation. Also represented by CHASE DUNN,
JAMES EDWARD RANSDELL, IV, SARAH E. SHULMAN.
ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for
defendant-appellee Nucor Corporation. Also represented
by THEODORE PAUL BRACKEMYRE, TESSA V. CAPELOTO,
ADAM MILAN TESLIK, MAUREEN E. THORSON, CHRISTOPHER
B. WELD.
BENJAMIN JACOB BAY, Schagrin Associates, Washing-
ton, DC, argued for defendant-appellee Steel Dynamics,
Inc. Also represented by MICHELLE ROSE AVRUTIN,
NICHOLAS J. BIRCH, CHRISTOPHER CLOUTIER, ELIZABETH
DRAKE, WILLIAM ALFRED FENNELL, JEFFREY DAVID
GERRISH, LUKE A. MEISNER, KELSEY RULE, ROGER BRIAN
SCHAGRIN.
______________________
Before NEWMAN, REYNA, and CUNNINGHAM, Circuit
Judges.
REYNA, Circuit Judge.
Al Ghurair Iron & Steel LLC appeals a Court of Inter-
national Trade judgment affirming a circumvention deter-
mination by the U.S. Department of Commerce
(“Commerce”). Commerce determined that United Arab
Emirates (“UAE”) producers of certain corrosion-resistant
steel (“CORE”) were circumventing antidumping (“AD”)
and countervailing duty (“CVD”) orders on CORE from
China. In making its determination, Commerce analyzed
the circumvention factors and subfactors provided by 19
U.S.C. § 1677j(b). AGIS argues that Commerce errone-
ously analyzed several of these factors and subfactors.
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AL GHURAIR IRON & STEEL LLC v. US 3
We find that Commerce’s circumvention determination
is reasonable and supported by substantial evidence. We
conclude that Commerce’s analysis of the “value added”
subfactor is erroneous because Commerce did not reasona-
bly explain why it rejected AGIS’s financial data that were
purported to show a significant value added. We find that
this error was harmless because it was limited to a single
factual finding within a multi-factor test. We thus affirm
the Court of International Trade’s judgment.
BACKGROUND
The China CORE AD and CVD Orders
On June 3, 2015, Commerce received petitions from do-
mestic producers requesting that Commerce impose AD
and CVD duties on CORE exports from China. Initiation
of Less-Than-Fair-Value Investigations, 80 Fed. Reg.
37,228 (Dep’t of Commerce June 30, 2015). Commerce ini-
tiated AD and CVD investigations on June 30, 2015. Id.;
Initiation of Countervailing Duty Investigations, 80 Fed.
Reg. 37,223 (Dep’t of Commerce June 30, 2015). In July
2016, Commerce published AD and CVD orders on CORE
from China. Antidumping Duty Orders, 81 Fed. Reg.
48,390 (Dep’t of Commerce July 25, 2016); Countervailing
Duty Orders, 81 Fed. Reg. 48,387 (Dep’t of Commerce July
25, 2016).
CORE is a type of steel that is clad, plated, or coated
with corrosion-resistant metals. Affirmative Preliminary
Determination of Circumvention Involving the United Arab
Emirates, 85 Fed. Reg. 8841 (Dep’t of Commerce Feb. 18,
2020) and accompanying Memo (“Preliminary Determina-
tion”) at 5–7. CORE is used, for example, to make appli-
ances and vehicle parts. Id. at 14, 17; Op. Br. at 4. The
exact manner in which CORE is manufactured depends on
the CORE’s intended application, but it is generally as fol-
lows.
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4 AL GHURAIR IRON & STEEL LLC v. US
CORE production typically begins with one of two
methods for producing molten steel. Preliminary Determi-
nation at 14. The first method uses an electric arc furnace
to melt metallic raw material, including scrap steel, pig
iron, and direct-reduced iron. Id. The second method uses
a blast furnace to melt iron ore, coke, and smaller amounts
of scrap steel. Id. Once the molten steel is produced, it is
cast into a “slab.” Id. The slab is then reheated and rolled
on a mill to produce hot-rolled steel, which is typically
reeled into a coil. Id. The hot-rolled steel is then uncoiled
and passed through vats of acid to remove oxide scale. Id.Next, the hot-rolled steel may be processed into cold-rolled
steel by cold-rolling (to reduce its thickness) and annealing
(to harden it). Id.The substrate for CORE is usually cold-rolled steel, but
hot-rolled steel may be used to produce some CORE prod-
ucts. Id. at 13. The hot-dip and electrolytic processes are
the two most common processes for producing the final
CORE product from the hot-rolled steel or cold-rolled steel.
Id. at 14. The hot‐dip process passes the substrate through
a bath of molten zinc or aluminum. Id. The electrolytic
process passes the substrate through electrolytic cells to
plate zinc or other metals onto the substrate’s surface. Id.Al Ghurair Iron & Steel (“AGIS”) is a steel manufac-
turer based in the UAE. AGIS began producing CORE in
2008. Op. Br. at 11. AGIS does not manufacture hot-rolled
steel but purchases it from steel manufacturers in China
and other countries. Id. at 5, 8, 18–19. AGIS sometimes
purchases cold-rolled steel from China and other countries
and other times makes it in house. Id. AGIS’s facilities
create the end CORE products by further processing the
hot-rolled steel and cold-rolled steel as discussed above and
by completing any additional post-processing steps neces-
sary to meet customer demands (recoiling, cutting to size,
etc.). See id. at 6–7.
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AL GHURAIR IRON & STEEL LLC v. US 5
Commerce’s Circumvention Determinations
“The Tariff Act of 1930, as amended, permits Com-
merce to impose two types of duties on imports that injure
domestic industries. . . .” Guangdong Wireking Housewares
& Hardware Co. v. United States, 745 F.3d 1194, 1196
(Fed. Cir. 2014); Canadian Solar, Inc. v. United States, 918
F.3d 909, 913 (Fed. Cir. 2019). First, Commerce may im-
pose an antidumping duty on goods “sold in the United
States at less than . . . fair value.” 19 U.S.C. § 1673(1).
Second, Commerce may impose a countervailing duty on
goods that receive “a countervailable subsidy” from a for-
eign government. Id. § 1671(a). Antidumping duties rem-
edy unfair trade acts on the part of importers, while
countervailing duties are directed towards the unfair trade
acts of foreign governments. Guangdong Wireking
Housewares & Hardware, 745 F.3d at 1196.
Often, when AD and CVD orders are imposed, the mar-
ketplace reacts to the requirement for the payment of the
additional AD and CVD duties. One such reaction is the
circumvention of the duty orders. 19 U.S.C. § 1677j allows
Commerce to initiate investigations and make determina-
tions that prevent companies from circumventing AD and
CVD orders, such as by transshipping the goods subject to
duties through another country.
In August 2019, Commerce initiated investigations to
determine whether exports of CORE from the UAE were
circumventing the China CORE AD and CVD orders. Pre-
liminary Determination at 1. In February 2020, Commerce
issued its preliminary determination. Commerce prelimi-
narily determined that the UAE’s CORE exports to the
U.S. made from hot-rolled steel or cold-rolled steel manu-
factured in China were circumventing the AD and CVD or-
ders. Thereafter, Commerce received comments from
interested parties, including AGIS. AGIS argued that
Commerce’s preliminary determination was flawed in sev-
eral aspects. In July 2020, Commerce issued its final
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6 AL GHURAIR IRON & STEEL LLC v. US
affirmative determination, rejecting AGIS’s arguments
and concluding that CORE from the UAE circumvented the
AD and CVD orders. Affirmative Final Determination of
Circumvention Involving the United Arab Emirates, 85
Fed. Reg. 41,957 (Dep’t of Commerce July 13, 2020) and
accompanying Memo (“Final Determination”).
In its preliminary and final determinations, Commerce
analyzed each Section 1677j(b) factor and subfactor. Rele-
vant here are Commerce’s findings as to the Section
1677j(b)(3) factor of UAE’s “pattern of trade.” Also relevant
are Commerce’s findings as to the “level of investment,”
“nature of the production process,” “extent of production fa-
cilities,” and “value added” subfactors for determining
whether UAE processing is “minor or insignificant” under
Section 1677j(b)(1)(C).
For the “pattern of trade” factor, Commerce chose to
analyze 49 months before and after the date Commerce in-
itiated the investigations that led to the China CORE AD
and CVD orders. Final Determination at 12–13. Com-
merce explained that this allowed it “to compare the trade
patterns prior to the discipline of any AD and CV[D] duties
with the trade patterns present when parties were aware
that they could potentially have to pay AD and CV[D] du-
ties.” Id. at 13. Commerce also explained that the period
was consistent with prior determinations. Id. at 13 n.51
(collecting cases).
Commerce made several findings before concluding
that the “pattern of trade” factor evidenced circumvention.
Commerce analyzed data concerning the UAE as a whole
and found that after the initiation of the CORE investiga-
tions, the average monthly volume of imports of cold-rolled
steel and hot-rolled steel into the UAE from China in-
creased by 47.01% and 35.01%, respectively. Id. at 12; Pre-
liminary Determination at 24 (citing Global Trade Atlas
data). Commerce further found that the average monthly
volume of exports of CORE from the UAE to the United
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AL GHURAIR IRON & STEEL LLC v. US 7
States increased by 5,752.06% (almost four hundred thou-
sand metric tons) during the same period. Preliminary De-
termination at 25.
Commerce also considered AGIS’s data for the “pattern
of trade” factor. 1 Commerce explained that AGIS’s pur-
chases of cold-rolled and hot-rolled steel from China in-
creased thousands of percent in the 49-month period after
the CORE investigation began. In that same period,
AGIS’s exports to the U.S. of CORE made from Chinese
substrate substantially increased. Commerce found that
these data indicated a “pattern of trade” evidencing cir-
cumvention. Final Determination at 8, 11–13.
Commerce also analyzed whether the UAE’s pro-
cessing of hot-rolled and cold-rolled steel into CORE was
“minor or insignificant” compared to making the substrates
in China. For the “level of investment” subfactor, Com-
merce found that “the average expenditure for construction
of an integrated steel mill in China is [$3.6 billion,] roughly
15 times greater than that required to build [] facilities”
present in the UAE. Id. at 17 (comparing investments in
Chinese integrated steel facilities to that invested by a
UAE manufacturer); Preliminary Determination at 15.
Commerce looked at AGIS’s investment data and likewise
found that AGIS’s facilities required significantly less in-
vestment than the average integrated steel mill in China.
Commerce explained that its conclusions regarding these
findings were consistent with prior CORE cases involving
circumvention. Preliminary Determination at 15–16; Fi-
nal Determination at 18.
Commerce also determined that the “nature of the pro-
duction process” and “extent of production facilities” sub-
factors supported an affirmative finding of circumvention.
1 AGIS’s data that Commerce relied on are confiden-
tial and have not been included in this opinion.
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8 AL GHURAIR IRON & STEEL LLC v. US
Commerce explained that the UAE’s CORE manufacturing
process—which includes thinning, coating, and cutting to
make the final CORE product—was insignificant compared
to the much more numerous, complicated, and expensive
processes completed in China to make the substrate. Final
Determination at 18–19. Again, Commerce found its anal-
ysis consistent with prior CORE determinations. Id. at 19;
Preliminary Determination at 18–19.
Commerce concluded that the “value added” subfactor
supported circumvention. Commerce found that AGIS in-
creased the products’ value by an amount it deemed insig-
nificant. In making this calculation, however, Commerce
did not adopt AGIS’s argument that Commerce should
limit its dataset to just U.S. sales.
Commerce additionally analyzed global data from
MEPS International’s World Carbon Steel price database
and found that from 2013 to 2016 “the value-added by
CORE producers . . . [was] approximately 10 percent to 31
percent, depending on whether the underlying substrate
was already cold-rolled.” Preliminary Determination at 21.
Commerce found that MEPS data from 2018 indicated that
processing hot-rolled and cold-rolled steel to CORE in-
creased the products’ value by 13 to 22 percent. Id. at 21–
22. Commerce explained that, although these data were
not specific to the UAE, they were still probative because
methods used to process hot-rolled or cold-rolled steel to
CORE did not substantively vary across different coun-
tries. Id.Commerce concluded that “the value of the [hot-rolled
and/or cold-rolled steel] produced in China . . . is a signifi-
cant portion of the total value of the completed . . . CORE[]
exported to the United States.” Final Determination at 9.
Commerce explained that this determination was con-
sistent with prior cases involving different countries, which
likewise concluded that processing hot-rolled or cold-rolled
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AL GHURAIR IRON & STEEL LLC v. US 9
steel to CORE did not add significant value to the imported
good. Preliminary Determination at 21.
Commerce reached a final affirmative circumvention
determination, finding that UAE exports of CORE made
from Chinese hot-rolled steel or cold-rolled steel circum-
vented the AD and CVD orders covering shipments of
CORE from China. Preliminary Determination at 27–28;
Final Determination at 25.
AGIS challenged Commerce’s findings in the Court of
International Trade, which affirmed Commerce’s determi-
nation. Al Ghurair Iron & Steel v. United States, 536 F.
Supp. 3d 1357 (Ct. Int’l Trade 2021). AGIS appeals to this
court. We have jurisdiction under 28 U.S.C. § 1295(a)(5).
STANDARD OF REVIEW
We review a judgment of the Court of International
Trade de novo, reapplying the same standard of review ap-
plied by that court in its review of Commerce’s affirmative
circumvention determination. See NEXTEEL Co. v. United
States, 28 F.4th 1226, 1233 (Fed. Cir. 2022). As such, we
review Commerce’s findings for substantial evidence. Id.Substantial evidence is “evidence that a reasonable mind
might accept as adequate to support a conclusion.” SeAH
Steel VINA Corp. v. United States, 950 F.3d 833, 840 (Fed.
Cir. 2020) (citation omitted); see also Nippon Steel Corp. v.
United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (“Com-
merce’s special expertise in administering the anti-dump-
ing law entitles its decisions to deference from the courts”).
DISCUSSION
Under Section 1677j(b)(1), Commerce may find and ad-
dress circumvention if:
(A) [the] merchandise imported into the United
States is of the same class or kind as any merchan-
dise produced in a foreign country that is the sub-
ject of . . . [an AD and/or CVD order],
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10 AL GHURAIR IRON & STEEL LLC v. US
(B) before importation into the United States, such
imported merchandise is completed or assembled
in another foreign country from merchandise which
. . . is subject to [the] order . . . or . . . is produced in
the foreign country . . . to which such order . . . ap-
plies,
(C) the process of assembly or completion in the for-
eign country . . . is minor or insignificant,
(D) the value of the merchandise produced in the
foreign country . . . is a significant portion of the
total value of the merchandise exported to the
United States, and
(E) . . . action is appropriate . . . to prevent evasion
of such order.
To determine whether the process of assembly or com-
pletion is “minor or insignificant” (element C above), Com-
merce “shall take into account:”
(A) the level of investment in the foreign country,
(B) the level of research and development in the for-
eign country,
(C) the nature of the production process in the for-
eign country,
(D) the extent of production facilities in the foreign
country, and
(E) whether the value of the processing performed
in the foreign country represents a small propor-
tion of the value of the merchandise imported into
the United States.
19 U.S.C. § 1677j(b)(2)(A)–(E).
Under Section 1677j(b)(3), Commerce is also required
to consider “(A) the pattern of trade, including sourcing
patterns, (B) whether the manufacturer or exporter of the
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AL GHURAIR IRON & STEEL LLC v. US 11
merchandise . . . is affiliated with the person who uses the
merchandise . . . to assemble or complete in the foreign
country the merchandise that is subsequently imported
into the United States, and (C) whether imports into the
foreign country of the merchandise . . . have increased after
the initiation of the [AD/CVD] investigation.”
We conclude that substantial evidence supports Com-
merce’s determinations as to “pattern of trade,” “level of in-
vestment,” “nature of the production process,” and “extent
of production facilities.” Commerce erred by failing to ex-
plain its factual findings for the “value added” subfactor, as
applied to AGIS’s financial data. But because Commerce’s
preliminary and final determinations provide multiple
other reasons supporting its circumvention finding, we con-
clude that this error is harmless.
1. “Pattern of Trade”
AGIS argues that substantial evidence does not sup-
port Commerce’s determination that there is a “pattern of
trade” indicating that the UAE is circumventing the China
CORE AD and CVD orders. Op. Br. at Section V. We dis-
agree.
First, AGIS argues that Commerce erred because it
was “arbitrary” for Commerce to rely on the 49 months be-
fore and after the China CORE investigations began. Id.
at 43–44.
Commerce’s timeframe selection was not arbitrary.
Commerce reasonably explained that the period allowed it
to analyze whether the trade patterns changed in reaction
to the AD and CVD orders’ investigations, when parties
learned that “they could potentially have to pay AD and
CV[D] duties.” Final Determination at 13. Commerce also
reasonably found that this period was consistent with its
prior determinations. Id. at 13 n.51 (collecting cases).
Second, AGIS contends that the 49-month timeframe
was “contrary to law.” Op. Br. at 43. But AGIS has
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12 AL GHURAIR IRON & STEEL LLC v. US
provided no legal authority supporting this argument. In
fact, AGIS concedes that the statute “does not identify any
particular time periods at all for Commerce to consider for
this factor.” Id. at 44.
Third, AGIS identifies data specific to AGIS that it ar-
gues show that Commerce’s decision is unsupported by
substantial evidence. Id. at 43–48. For instance, AGIS
claims that it has not shipped CORE to the United States
made from Chinese hot-rolled or cold-rolled steel since De-
cember 2017. Id. at 45–46. Commerce reasonably ex-
plained that its analysis was country-wide, so AGIS-
specific data were less probative than the data concerning
the UAE as a whole. Final Determination at 9–13. AGIS
does not challenge Commerce’s findings as to the “pattern
of trade” that it based on UAE data. To the extent that
AGIS is asserting that Commerce should have found AGIS-
specific data more probative than UAE data, we recognize
that substantial evidence review does not permit us to re-
weigh the evidence. See Inland Steel Indus., Inc. v. United
States, 188 F.3d 1349, 1359 (Fed. Cir. 1999) (substantial
evidence review does not “allow the parties to retry factual
issues before us de novo”).
In addition, while some of AGIS’s data arguably support
AGIS’s position, other evidence does not. SolarWorld
Americas, Inc. v. United States, 910 F.3d 1216, 1222 (Fed.
Cir. 2018) (“Commerce’s finding may still be supported by
substantial evidence even if two inconsistent conclusions
can be drawn from the evidence.” (citation omitted)). AGIS
does not dispute Commerce’s factual finding that immedi-
ately after the initiation of the CORE investigation, AGIS’s
purchases of cold-rolled and hot-rolled steel from China
skyrocketed. Nor does AGIS dispute Commerce’s factual
finding that AGIS exported significantly more CORE into
the U.S. made from Chinese substrate during that same
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AL GHURAIR IRON & STEEL LLC v. US 13
timeframe. Commerce reasonably relied on these data as
a “pattern of trade.” 2
Thus, substantial evidence supports Commerce’s find-
ing that the Section 1677j(b)(3)(A) “pattern of trade” factor
evidenced circumvention.
2. “Level of Investment”
AGIS argues that Commerce erroneously analyzed the
UAE’s “level of investment” in determining that the UAE’s
contribution was “minor or insignificant.” Op. Br. at Sec-
tion III (discussing 19 U.S.C. §§ 1677j(b)(1)(C),
1677j(b)(2)(A)). We find that substantial evidence supports
Commerce’s decision as to this subfactor.
First, AGIS asserts that since it “was established in
2005, it has continued to make sustained investments and
re-investments in its production capabilities, significantly
adding to its assets and expanding its production opera-
tions.” Op. Br. at 27–28. AGIS asserts that its company’s
assets are worth a significant amount. Id. AGIS argues
that its value is comparable to the value of the smallest
Chinese steel mills. Id. at 35–36.
These factual disputes do not establish a lack of sub-
stantial evidence. Inland Steel, 188 F.3d at 1359. Com-
merce reasonably rejected these arguments when it
determined that AGIS’s investments were vastly lower
than the amount needed to construct the average steel mill
in China. Preliminary Determination at 15; Final Deter-
mination at 17. Commerce did not err simply because
2 Commerce declined to determine whether AGIS in-
tended to circumvent the AD and CVD orders, because “in-
tent is not a necessary element of a finding of
circumvention.” Final Determination at 13–14. No party
challenges this decision.
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14 AL GHURAIR IRON & STEEL LLC v. US
AGIS’s valuation is similar to Chinese steel mills on the
extremely low end of the valuation spectrum.
Second, AGIS argues that Commerce legally erred by
comparing AGIS’s investment to make CORE with Chinese
manufactures’ investment to make hot-rolled or cold-rolled
steel. Op. Br. at 32–33. AGIS argues that Commerce
should have only compared AGIS’s CORE investment to
the investments of Chinese CORE producers. Id.AGIS provides no binding authority supporting this ar-
gument. Commerce reasonably explained that its compar-
ison “indicate[d] what portion of the total value of the
merchandise subject to these inquiries is accounted for by
the last step of processing.” Final Determination at 18.
Third, AGIS argues that Commerce erred by failing to
conform its analysis to its past practices. See Op. Br. at
29–30, 32, 34–35. We disagree.
Commerce is not bound by its prior determinations.
Hyundai Elec. & Energy Sys. Co. v. United States, 15 F.4th
1078, 1089 (Fed. Cir. 2021) (“We have rejected the notion
that Commerce is forever bound by its past practices. In-
stead, each administrative review is a separate exercise of
Commerce’s authority that allows for different conclusions
based on different facts in the record.” (citations omitted));
Reply. Br. at 20 (conceding that “Commerce must make cir-
cumvention determinations on a case-by-case basis.”).
Commerce must, however, explain itself, which it did for
this subfactor. Save Domestic Oil, Inc. v. United States,
357 F.3d 1278, 1283–84 (Fed. Cir. 2004) (“[I]f Commerce
has a routine practice for addressing like situations, it
must either apply that practice or provide a reasonable ex-
planation as to why it departs therefrom.”). And Com-
merce’s analysis here is consistent with its prior
determinations. Commerce correctly identified multiple
other cases—including prior CORE cases—where Com-
merce analyzed the imported goods in terms of the entire
manufacturing process, not just the final steps. See
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AL GHURAIR IRON & STEEL LLC v. US 15
Preliminary Determination at 16 nn.68–69 (collecting
cases); Final Determination at 18 n.80.
We disagree with AGIS that Commerce erred by acting
contrary to its determination in Hot-Rolled Lead. See, e.g.,
Op. Br. at 34–35 (discussing Hot-Rolled Lead and Bismuth
Carbon Steel Products from Germany and the United King-
dom; Negative Final Determinations of Circumvention of
Antidumping and Countervailing Duty Orders, 64 Fed.
Reg. 40336 (Dep’t of Commerce July 26, 1999)). That is a
non-binding decision from 1999, and the products consid-
ered were different from those at-issue here.
In sum, substantial evidence supports Commerce’s de-
termination that the UAE’s “level of investment” is minor
and insignificant.
3. “Nature of the Production Processes” and
“Extent of the Production Facilities”
AGIS asserts that Commerce erroneously analyzed the
“nature of the production processes” and “extent of produc-
tion facilities” in the UAE to determine that the UAE’s con-
tribution was “minor or insignificant,” evidencing
circumvention. Op. Br. at Section III (discussing 19 U.S.C.
§§ 1677j(b)(1)(C), 1677j(b)(2) (C)–(D)). We disagree and
find that substantial evidence supports Commerce’s deci-
sion for these subfactors.
AGIS argues that Commerce erred because the nature
of AGIS’s processes and the extent of its facilities are sig-
nificant. See, e.g., Op. Br. at 29 (“AGIS’s production process
requires multiple sub-stages and different equipment. . .
.”); id. at 30 (“AGIS’s situation hardly involves unskilled
labor and limited and minor production.”); id. at 31
(“AGIS’s operations are extensive and sophisticated. . . .”).
We reject these arguments as improper attempts to reliti-
gate facts on appeal. Inland Steel, 188 F.3d at 1359. Com-
merce reasonably found that the UAE’s CORE
manufacturing processes and facilities, including those at
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16 AL GHURAIR IRON & STEEL LLC v. US
AGIS, are insignificant as compared to the more numerous,
complicated, and expensive processes and facilities in
China. Preliminary Determination at 18–20; Final Deter-
mination at 8, 18. Its determination is supported by sub-
stantial evidence.
Next, citing Certain Tissue Paper Products, AGIS ar-
gues that Commerce is acting contrary to its prior applica-
ble determinations. Op. Br. at 29–30 (discussing Certain
Tissue Paper Products from China: Affirmative Prelimi-
nary Determination of Circumvention of the Antidumping
Duty Order, 78 Fed. Reg. 14514 (Dep’t of Commerce Mar.
6, 2013) and accompanying Memo)). In Certain Tissue Pa-
per Products, in finding circumvention, Commerce deter-
mined that most of the processing occurred in China—the
paper was essentially made there. Certain Tissue Paper
Products Memo at 5–6 (“[W]e preliminarily find that the
production process conducted by ARPP in converting the .
. . jumbo rolls to cut-to-length tissue paper is limited and
minor”). The investigated Indian company merely com-
pleted the final manufacturing steps, such as cutting the
paper. Id.We find that Certain Tissue Paper Products is con-
sistent with Commerce’s analysis here. In this case, Com-
merce similarly found that the most complex processing
occurred in China and that the UAE producers merely com-
pleted final, relatively minor processing steps. 3 Prelimi-
nary Determination at 14, 18–19.
3 Even if Certain Tissue Paper Products involved a
different analysis by Commerce, it is non-binding. Hyun-
dai Elec. & Energy Sys., 15 F.4th at 1089. Commerce’s
findings as to this subfactor are reasonably explained and
consistent with findings in prior cases involving CORE pro-
duced in other countries. See Preliminary Determination
at 19–20 (collecting cases).
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AL GHURAIR IRON & STEEL LLC v. US 17
Thus, substantial evidence supports Commerce’s deter-
minations as to the “nature” and “extent” subfactors.
4. “Value Added”
AGIS argues that substantial evidence does not sup-
port Commerce’s decision that the UAE’s processing steps
add an insignificant “value” to its CORE products. See Op.
Br. at Section IV (discussing 19 U.S.C. §§ 1677j(b)(1)(C),
1677j(b)(2)(E)). AGIS asserts that “Commerce ignored
AGIS’s calculations and failed to explain why it was appro-
priate to use in its calculations company-wide profit
amounts instead of the actual profit on U.S. sales of CORE
produced with Chinese [hot-rolled and cold-rolled steel]
substrate.” Id. at 42. AGIS states that had Commerce
adopted the narrower U.S.-only dataset, Commerce would
have calculated AGIS’s “value added” to be much higher
than the percentage Commerce determined. 4 Id.
Appellees argue that Commerce did not have to explain
why AGIS’s calculations were wrong. The government
4 AGIS also argues that Commerce’s final circum-
vention determination is unsupported by substantial evi-
dence because Commerce failed to explain why it
considered the percentage of value added by AGIS to be in-
significant. Op. Br. at 40–41. We reject this argument be-
cause Commerce’s explanation—that the value added was
insignificant in view of prior CORE cases making similar
findings and the other facts of the case—was reasonable
and supported by substantial evidence. Preliminary Deter-
mination at 20–21; Final Determination at 17–20. AGIS
also fails to identify anything Commerce could or should
have said. Op. Br. at 38, 40–41; Reply Br. at 9 (conceding
that “Commerce should not be held to a numerical or
‘bright-line’ test in considering the value added in third-
country processing”).
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18 AL GHURAIR IRON & STEEL LLC v. US
asserts that if Commerce were required to explain why
AGIS’s calculations were wrong “there might be no end to
the analyses [Commerce] would have to perform.” Oral
Arg. at 32:20–32:45 (government’s counsel); see also id. at
38:50–39:10 (Steel Dynamics’ counsel making a similar ar-
gument).
Appellees also contend that the following passage from
Commerce’s preliminary determination is a sufficiently ad-
equate explanation:
Commerce preliminarily finds that the formula
AGIS used in its analyses is unpersuasive because
Commerce is determining what the further pro-
cessing cost is as a percentage of the total U.S.
sales price; the statute does not require use of
AGIS’s preferred formulas and its analyses do not
override Commerce’s conclusion with respect to
this factor.
Preliminary Determination at 22.
While Commerce must reasonably explain its findings,
its explanations are not required to reach a certain level,
only that they are sufficient to afford adequate review. See
NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319
(Fed. Cir. 2009) (“[W]hile its explanations do not have to be
perfect, the path of Commerce’s decision must be reasona-
bly discernable to a reviewing court.”). Without a reasona-
ble explanation, this court cannot “meaningful[ly] review”
Commerce’s decision. OSI Pharms., LLC v. Apotex Inc.,
939 F.3d 1375, 1382 (Fed. Cir. 2019) (citation omitted);
SEC v. Chenery Corp., 318 U.S. 80, 94 (1943) (“[C]ourts
cannot exercise their duty of review unless they are advised
of the considerations underlying the action under review.”).
Nor can we “supply a reasoned basis for [Commerce’s] ac-
tion that [Commerce] itself has not given.” NEXTEEL, 28
F.4th at 1237 (citation omitted).
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AL GHURAIR IRON & STEEL LLC v. US 19
This does not mean that Commerce’s written decision
must address “every argument raised by a party or explain
every possible reason supporting its conclusion.” Synopsys,
Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed.
Cir. 2016); see also Yeda Rsch. v. Mylan Pharms. Inc., 906
F.3d 1031, 1046 (Fed. Cir. 2018) (“[F]ailure to explicitly dis-
cuss every . . . minor argument does not alone establish
that the [agency] did not consider it.”). But we must be able
to determine that Commerce at least considered counterar-
guments to its position. Id.; see also BMW of N. Am. LLC
v. United States, 926 F.3d 1291, 1302 (Fed. Cir. 2019) (find-
ing that Commerce erred when it “largely ignored” a
party’s counterargument and failed to articulate any ra-
tional for a finding).
Commerce erred here because it did not reasonably ex-
plain why it rejected AGIS’s calculations. We disagree with
Appellees’ hyperbole that it would have been impossible or
highly burdensome for Commerce to explain why AGIS’s
calculations were wrong. This case involved only a few ac-
tive participants. See Final Determination at 2–3; see also
Oral Arg. at 37:40–50 (Steel Dynamics’ counsel explaining
that the case involved “one company that was an active
participant as a respondent”). This was one of AGIS’s main
arguments and was squarely before Commerce. See Hita-
chi Energy USA Inc. v. United States, 34 F.4th 1375, 1386
(Fed. Cir. 2022) (finding that substantial evidence did not
support Commerce’s decision to invoke adverse inferences
and apply partial facts where Commerce provided “[n]o
reasonable justification” to do so). AGIS’s calculations ap-
parently used the same formulas as Commerce but only in-
cluded a smaller subset of data. Op. Br. at 37–43; Reply
Br. at 5–6; Oral Arg. at 35:48–36:40 (Steel Dynamics’ coun-
sel conceding that all Commerce had to do was explain why
using U.S.-only data in the formulas was misleading).
We agree that Commerce’s explanation was insuffi-
cient. We are unable to conclude that Commerce even con-
sidered AGIS’s argument, and Commerce’s discussion is
Case: 22-1199 Document: 73 Page: 20 Filed: 04/12/2023
20 AL GHURAIR IRON & STEEL LLC v. US
limited to a single paragraph that is vague and conclusory
and wholly fails to explain why Commerce believed that
using AGIS’s dataset would be improper. 5 In fact, Com-
merce’s meager explanation suggests that it may have mis-
understood AGIS’s position because Commerce stated that
it did not need to use “AGIS’s preferred formulas”—but
AGIS used the same formulas as Commerce. Preliminary
Determination at 22. In sum, substantial evidence does
not support Commerce’s determination as to AGIS’s “value
added.”
5. Harmless Error
Because we find that substantial evidence does not sup-
port Commerce’s determination as to the “value added”
subfactor, we must consider the overall effect of this error
and whether a remand is necessary. Suntec Indus. Co.,
Ltd. v. United States, 857 F.3d 1363, 1372 (Fed. Cir. 2017)
(applying a harmless error analysis); Intercargo Ins. Co. v.
United States, 83 F.3d 391, 394 (Fed. Cir. 1996) (“It is well
settled that principles of harmless error apply to the review
of agency proceedings.”). We conclude that Commerce’s er-
ror was harmless. Commerce’s finding of circumvention in-
volved a multi-factor test and was supported by many
findings other than its calculation of AGIS’s value added.
Commerce’s determination was country-wide, so its
analysis of AGIS’s value added data was only one part of
the broader inquiry for this subfactor. AGIS does not
5 The government also argued at oral argument that
Commerce explained itself by stating, “even if AGIS’s
profit, financial expenses, and SG&A were added to the
value-added percentage calculation, the percentage of
value added does not materially change.” Final Determi-
nation at 20; Oral Arg. at 31:30–32:20. This explanation
does not address the relevant question of why Commerce
declined to use AGIS’s narrower dataset.
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AL GHURAIR IRON & STEEL LLC v. US 21
appeal Commerce’s determination that global data indi-
cated a value added of 10% to 31% and that this data accu-
rately described the value added by UAE production.
Preliminary Determination at 21. Thus, we conclude that
Commerce’s overall determination does not require rever-
sal or correction on remand.
CONCLUSION
Commerce’s determination as to the UAE’s “pattern of
trade,” “level of investment,” “nature of the production pro-
cess,” and “extent of production facilities” is supported by
substantial evidence. While Commerce’s analysis for the
“value added” subfactor is not reviewable and is therefore
not supported by substantial evidence, this error was
harmless in view of Commerce’s other supported findings.
We have considered AGIS’s remaining arguments and find
them unpersuasive. We affirm the Court of International
Trade’s judgment and Commerce’s affirmative determina-
tion of circumvention.
AFFIRMED
COSTS
No costs.