Federal Circuit Upholds Commerce's Anti-Circ Inquiry on Corrosion-Resistant Steel From UAE
The U.S. Court of Appeals for the Federal Circuit on April 12 upheld the Commerce Department's determination that corrosion-resistant steel imports from the United Arab Emirates circumvented antidumping and countervailing duties on corrosion-resistant steel products from China. Judges Pauline Newman, Jimmie Reyna and Tiffany Cunningham held that Commerce properly supported the circumvention decision through evidence of patterns of trade, level of investment, nature of the production process in the UAE and the extent of the production facilities.
Although the judges said Commerce erred in not considering exporter Al Ghurair Iron & Steel's arguments over the value added in its UAE production processes, the error was "harmless," they said. Since the anti-circumvention inquiry was country-wide, the agency's analysis of AGIS's value-added data was "only one part of the broader inquiry for this subfactor," the court said. Reyna, the author of the opinion, said that Commerce had enough evidence from the other factors to uphold the determination.
AGIS launched its challenge to contest numerous elements of Commerce's anti-circumvention inquiry, including the agency's finding that the pattern of trade of corrosion-resistant steel from the UAE provided evidence of circumvention. Commerce analyzed the trade patterns 49 months before and after Commerce started the investigations that led to the AD/CVD orders on Chinese corrosion-resistant steel products. The agency said after the orders were imposed, the average monthly volume of import of hot- and cold-rolled steel into the UAE from China jumped 47.01% and 35.01%, respectively. Commerce also said that corrosion-resistant steel shipments from the UAE to the U.S. jumped 5,752.06%.
AGIS claimed that the 49 months time frame for Commerce to analyze was arbitrary and illegal. Reyna disagreed, finding that the agency permissibly found this to be a legal time frame since this period allows for an analysis of when trade patterns change in reaction to the AD/CVD orders' investigations. AGIS added that data specific to itself shows that Commerce's trade pattern analysis is unsupported since the exporter has not shipped CORE to the U.S. made from Chinese hot- or cold-rolled steel since 2017.
Reyna said the court is not allowed to reweigh the evidence in the way AGIS was suggesting, especially since the anti-circumvention inquiry was country-wide and not specific to AGIS. The judge added that "while some of AGIS’s data arguably support AGIS’s position, other evidence does not," pointing to evidence showing AGIS's purchases of hot- and cold-rolled steel from China "skyrocketed" during the investigation period.
The appellate court also addressed AGIS's challenge to Commerce's "level of investment" analysis, which found AGIS did not have enough investment in its facilities to make the company a proper steel maker, as compared with the average investments in Chinese steel mills. The exporter said its investment was commiserate with the level of investment found among small Chinese steel makers. "Commerce did not err simply because AGIS's valuation is similar to Chinese steel mills on the extremely low end of the valuation spectrum," the opinion said. Reyna further ruled that AGIS improperly tried to "relitigate facts on appeal" over Commerce's analysis of the exporter's nature of the production processes at its facilities.
Where Commerce did err was in its consideration of AGIS's value added in its facilities. The exporter said that if the agency were to use the company's U.S.-only data set, Commerce would have found AGIS's value added to be much higher than the percentage it did find. Even though the court found the error to be harmless, Reyna said the agency did not reasonably explain why it rejected AGIS's calculations. "In fact, Commerce’s meager explanation suggests that it may have misunderstood AGIS’s position" since Commerce said it did not need to use the company's preferred formulas, the court said, though the company used the same formulas as Commerce.
(Al Ghurair Iron & Steel v. United States, Fed. Cir. # 22-1199, dated 04/12/23; Judges: Pauline Newman, Jimmie Reyna and Tiffany Cunningham; Attorneys: Robert Gosselink of Trade Pacific for plaintiff-appellant AGIS; Kelly Geddes for defendant-appellee U.S. government; Thomas Beline of Cassidy Levy for defendant-appellee U.S. Steel Corp.; Alan Price of Wiley Rein for defendant-appellee Nucor Corp.; and Benjamin Bay of Schagrin Associates for defendant-appellee Steel Dynamics)