Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01161/USCOURTS-ca13-15-01161-0/pdf.json

Parties Involved:
Jiaxing Brother Fastener Co., Ltd.
Appellant
United States
Appellee
Vulcan Threaded Products, Inc.
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

JIAXING BROTHER FASTENER CO., LTD., AKA 

JIAXING BROTHER STANDARD PARTS CO., LTD., 

AKA RMB FASTENERS LTD., AKA IFI & MORGAN 

LTD.,

Plaintiff-Appellant

v.

UNITED STATES, VULCAN THREADED 

PRODUCTS, INC.,

Defendants-Appellees

______________________ 

2015-1161

______________________ 

Appeal from the United States Court of International 

Trade in No. 1:12-cv-00384-LMG, Judge Leo M. Gordon.

______________________ 

Decided: April 21, 2016

______________________ 

 GREGORY S. MENEGAZ, DeKieffer & Horgan, PLLC, 

Washington, DC, argued for plaintiff-appellant. Also 

represented by JOHN J. KENKEL, JAMES KEVIN HORGAN,

ALEXANDRA H. SALZMAN. 

 ALEXANDER V. SVERDLOV, Commercial Litigation 

Branch, Civil Division, United States Department of 

Justice, Washington, DC, argued for defendant-appellee 

United States. Also represented by ELIZABETH ANNE 

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2 JIAXING BROTHER FASTENER CO. v. US

SPECK, BENJAMIN C. MIZER, JEANNE E. DAVIDSON,

PATRICIA M. MCCARTHY; LISA W. WANG, Office of the Chief 

Counsel for Trade Enforcement and Compliance, United 

States Department of Commerce, Washington, DC.

 FREDERICK PAUL WAITE, Vorys, Sater, Seymour & 

Pease LLP, Washington, DC, argued for defendantappellee Vulcan Threaded Products, Inc. Also represented 

by KIMBERLY YOUNG.

______________________ 

Before O’MALLEY, REYNA, and CHEN, Circuit Judges.

REYNA, Circuit Judge. 

Appellants appeal a decision of the U.S. Court of International Trade that affirmed a U.S. Department of 

Commerce determination to select Thailand as the surrogate country for China in the second administrative 

review of an antidumping duty order on certain steel 

threaded rod from China.1 We hold that the U.S. Department of Commerce decision to use surrogate values 

from Thailand to value certain factors of production in 

calculating normal value for the subject merchandise was 

in accordance with law, not arbitrary or capricious, and 

supported by substantial evidence. We affirm. 

BACKGROUND

Appellants are Jiaxing Brother Fastener Co., Ltd.

(aka Jiaxing Brother Standard Parts Co., Ltd.), IFI & 

Morgan Ltd., and RMB Fasteners Ltd. (collectively, 

“Appellants” or “Jiaxing”). Jiaxing Brother Fastener Co., 

 

1 Certain Steel Threaded Rod from the People’s Republic of China: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review; 2010–

2011, 77 Fed. Reg. 67,332, 67,333 (Dep’t of Commerce 

Nov. 9, 2012).

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JIAXING BROTHER FASTENER CO. v. US 3

Ltd. is a Chinese manufacturer of steel threaded rod, 

while IFI & Morgan Ltd. and RMB Fasteners Ltd. are 

Chinese exporters of the steel threaded rod produced by 

Jiaxing Brother Fastener Co., Ltd. Appellants are affiliated parties. J.A. 8. Appellants challenge the U.S. Department of Commerce (“Commerce”) decision to select 

Thailand as the surrogate country to establish normal 

value in the second administrative review of the antidumping duty order on certain steel threaded rod from 

China. See Certain Steel Threaded Rod from the People’s 

Republic of China: Notice of Antidumping Duty Order, 74 

Fed. Reg. 17,154 (Dep’t of Commerce Apr. 14, 2009).

In antidumping proceedings involving nonmarket 

economy countries, such as China, the Tariff Act requires 

Commerce to calculate normal value of the subject merchandise based on surrogate values offered in a comparable market economy. See 19 U.S.C. § 1677b(c)(1). 

Commerce calculates the surrogate values by valuing 

certain “factors of production” used in producing the 

merchandise in a comparable market economy.2 Id. § 

1677b(c)(4). In essence, Commerce seeks to construct a 

hypothetical normal value for the merchandise that is 

uninfluenced by the nonmarket economy. See Nation 

Ford Chem. Co. v. United States, 166 F.3d 1373, 1375 

(Fed. Cir. 1999); see also 19 U.S.C. § 1677(18)(A) (defining 

“nonmarket economy country”). To do this, Commerce 

selects a market economy country as the primary surrogate country. 19 C.F.R. § 351.408(c)(2). The process of 

choosing a market economy country to value the factors of 

production is known as surrogate country selection. See 

 

2 The factors of production “include, but are not limited to . . . hours of labor required, . . . quantities of raw 

materials employed, . . . amounts of energy and other 

utilities consumed, and . . . representative capital cost, 

including depreciation.” 19 U.S.C. § 1677b(c)(3). 

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4 JIAXING BROTHER FASTENER CO. v. US

Dorbest Ltd. v. United States, 604 F.3d 1363, 1368 (Fed. 

Cir. 2010). 

As early as 2004, Commerce has followed a four-step 

process to select a surrogate country: 

(1) the Office of Policy (“OP”) assembles a list of 

potential surrogate countries that are at a comparable level of economic development to the [nonmarket economy] country; (2) Commerce identifies 

countries from the list with producers of comparable merchandise; (3) Commerce determines 

whether any of the countries which produce comparable merchandise are significant producers of 

that comparable merchandise; and (4) if more 

than one country satisfies steps (1)–(3), Commerce will select the country with the best factors 

data.

Vinh Hoan Corp. v. United States, 49 F. Supp. 3d 1285, 

1292 (Ct. Int’l Trade 2015) (internal quotation marks 

omitted) (quoting Import Admin., U.S. Dep’t of Commerce, Non-Market Economy Surrogate Country Selection 

Process, Policy Bulletin 04.1 (2004), 

http://enforcement.trade.gov/policy/bull04-1.html (last 

visited Feb. 11, 2014)). 

The statute directs Commerce to value the factors 

of production through “the best available information” in 

the market economy. 19 U.S.C. § 1677b(c)(1). We have 

noted that Commerce has discretion to determine what 

constitutes the best available information, as this term is 

not defined by statute. QVD Food Co. v. United States, 

658 F.3d 1318, 1323 (Fed. Cir. 2011). “Commerce generally selects, to the extent practicable, surrogate values that 

are publicly available, are product-specific, reflect a broad 

market average, and are contemporaneous with the 

period of review.” Qingdao Sea-Line Trading Co. v. 

United States, 766 F.3d 1378, 1386 (Fed. Cir. 2014). 

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JIAXING BROTHER FASTENER CO. v. US 5

Using the best available information, Commerce 

“shall [value the factors of production] to the extent 

possible . . . in one or more market economy countries that 

are—(A) at a level of economic development comparable to 

that of the nonmarket economy country, and (B) significant producers of comparable merchandise.” 

§ 1677b(c)(4)(A)–(B) (emphases added). The statute does 

not define “comparable”; nor does it require Commerce to 

use any particular methodology in determining which 

countries are sufficiently comparable. To partially fill the 

statutory gap, Commerce promulgated 19 C.F.R. 

§ 351.408(b), which emphasizes per capita Gross Domestic 

Product (“GDP”) as a measure of economic comparability:

In determining whether a country is at a level of 

economic development comparable to the nonmarket economy under [19 U.S.C. 

§ 1677b(c)(1)(B)] or [19 U.S.C. § 1677b(c)(4)(A)] of 

the Act, the Secretary will place primary emphasis on per capita GDP as the measure of economic 

comparability.

19 C.F.R. § 351.408(b). 

At least by 2007, Commerce began relying on per capita Gross National Income (“GNI”), as opposed to per 

capita GDP, for determining sufficiently comparable 

countries. According to Commerce, “while the two 

measures are very similar, per capita GNI is reported 

across almost all countries by an authoritative source (the 

World Bank),” and Commerce “believes that the per 

capita GNI represents the single best measure of a country’s level of total income and thus level of economic 

development.” Vinh Hoan, 49 F. Supp. 3d at 1293 n.5 

(quoting Antidumping Methodologies in Proceedings 

Involving Non-Market Economy Countries: Surrogate 

Country Selection and Separate Rates, 72 Fed. Reg. 

13246, 13246 n.2 (Dep’t of Commerce Mar. 21, 2007)). 

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Following its preference to use one surrogate country 

as the reference point, 19 C.F.R. § 351.408(c)(2), when 

several countries are both at a level of economic development comparable to the nonmarket economy country and 

significant producers of comparable merchandise, Commerce evaluates the reliability and completeness of the 

data in the similarly-situated surrogate countries and 

generally selects the one with the best data as the primary surrogate country.3

In April 2008, Commerce instituted the underlying 

antidumping duty investigation on certain steel threaded 

rod from China.4 In April 2009, Commerce made a final 

affirmative determination that a U.S. industry was materially injured by sales at less-than-fair value of the merchandise subject to the scope of the investigation.5 In 

2009, Commerce issued an antidumping duty order on the 

 

3 See Import Admin., U.S. Dep’t Commerce, NonMarket Economy Surrogate Country Selection Process, 

Policy Bulletin 04.1 (2004), http://enforcement.trade.gov 

/policy/bull04-1.html (last visited Jan. 21, 2016) (“[D]ata 

quality is a critical consideration affecting surrogate 

country selection. After all, a country that perfectly 

meets the requirements of economic comparability and 

significant producer is not of much use as a primary 

surrogate if crucial factor price data from that country are 

inadequate or unavailable.”).

4 See Steel Threaded Rod from the People’s Republic 

of China: Initiation of Antidumping Duty Investigation, 

73 Fed. Reg. 17,318–23 (Dep’t of Commerce Apr. 1, 2008). 

5 See Certain Steel Threaded Rod from the People’s 

Republic of China: Notice of Antidumping Duty Order, 74 

Fed. Reg. 17,154 (Dep’t of Commerce Apr. 14, 2009). 

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JIAXING BROTHER FASTENER CO. v. US 7

subject merchandise.6 For purposes of both the preliminary and final determinations, Commerce selected India 

as the surrogate country on which to base the Chinese

producers’ factors of production.7 Appellants were respondents in the investigation and were assigned antidumping duty rates of 55.16%.8 

The Second Administrative Review 

On May 27, 2011, Commerce initiated a second administrative review for the period of review from April 1, 

2010, though March 31, 2011.9 The second administrative review is the subject of this appeal. 

At the outset of the second administrative review, 

Commerce proposed seven countries as potential surrogate countries on the basis that they had a per capita GNI

close to China: 

Country Per Capita GNI, 2010 (USD)

China $4,260

Philippines $2,050

Indonesia $2,580

Ukraine $3,010

Thailand $4,210

 

6 See Certain Steel Threaded Rod from the People’s 

Republic of China: Notice of Antidumping Duty Order, 74 

Fed. Reg. 17,154 (Dep’t of Commerce Apr. 14, 2009). 7 See Certain Steel Threaded Rod from the People’s 

Republic of China: Final Determination of Sales at Less 

Than Fair Value, 74 Fed. Reg. 8907, 8909 (Dep’t of Commerce Feb. 27, 2009). 8 See Certain Steel Threaded Rod From the People’s 

Republic of China: Notice of Antidumping Duty Order, 74 

Fed. Reg. 17,154, 17,156 (Apr. 14, 2009).

9 See Initiation of Antidumping and Countervailing 

Duty Administrative Reviews, 76 Fed. Reg. 30,912 (Dep’t 

of Commerce May 27, 2011). 

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8 JIAXING BROTHER FASTENER CO. v. US

Peru $4,710

Columbia $5,510

South Africa $6,100

J.A. 28–29. With a per capita GNI of $1,340, India was 

not included on the list. J.A. 27–29.10 

After publishing the list of surrogate country candidates, Commerce invited interested parties to comment on 

the selection of an appropriate surrogate country for 

China.11 Vulcan Threaded Products, Inc. (“Vulcan”) 

submitted data from Thailand, arguing that Thailand was 

the best choice. Jiaxing urged Commerce to use India as 

the surrogate country.12 J.A. 61–62, 821. Of the additional countries proposed by other parties, none were 

within the per capita GNI range noted on the list. J.A. 

25, 821, 1384–85. 

In its April 2012 preliminary decision on the second 

administrative review, Commerce selected Thailand as 

the most appropriate market economy to act as the surrogate country to China. J.A. 811–35.13 Commerce evalu-

 

10 Memorandum, Antidumping Duty Order on Certain Steel Threaded Rod from the People’s Republic of 

China (Dep’t of Commerce Nov. 18, 2011). 

11 See J.A. 821; Certain Steel Threaded Rod From 

the People’s Republic of China: Preliminary Results of 

Administrative Review, Intent to Rescind, and Rescission, 

in Part, 77 Fed. Reg. 27,022, 27025 (Dep’t of Commerce 

May 8, 2012).

12 See J.A. 61–64; Second Administrative Review of 

Steel Threaded Rod from China: Petitioner’s Comments 

on Surrogate Country Selection (Feb. 3, 2012).

13 See J.A. 821; Certain Steel Threaded Rod From 

the People’s Republic of China: Preliminary Results of 

Administrative Review, Intent to Rescind, and Rescission, 

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JIAXING BROTHER FASTENER CO. v. US 9

ated Global Trade Atlas (“GTA”) data and determined 

that all countries on the surrogate country list exported 

significant quantities of steel threaded rod and could be 

considered significant producers of comparable merchandise. J.A. 820–21. After considering the reliability and 

availability of surrogate value data, Commerce chose 

Thailand as the primary surrogate country because the 

Thai information on record was “complete,” allowing

Commerce to value material inputs, energy, movement 

expenses, and financial ratios. J.A. 821–22. To value 

financial ratios, Commerce used the 2010 annual report of 

the Thai company Capital Engineering Network Public 

Company Limited (“CEN”). J.A. 821–22, 828–43. To 

value the steel and hydrochloric acid (“HCl”) inputs,

Commerce used Thai GTA import statistics. J.A. 824–25, 

838–41. Commerce did not consider India as a surrogate 

country because the Indian data was less economically 

comparable to China than the Thai data. J.A. 820–21. 

Following the preliminary decision, Jiaxing submitted briefing, arguing that Commerce should use India as 

the primary surrogate country, with the Philippines as an 

alternative to India. J.A. 1384–85. 

On November 9, 2012, Commerce published the final 

results of the second administrative review, selecting 

Thailand as the surrogate country.14 J.A. 1, 1384–94. 

Commerce again explained that India’s per capita GNI 

was not at a level of economic development comparable to 

China. J.A. 1385–87. As between Thailand and the 

 

in Part, 77 Fed. Reg. 27,022 (Dep’t of Commerce May 8, 

2012).

14 Certain Steel Threaded Rod from the People’s Republic of China: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review; 2010–

2011, 77 Fed. Reg. 67,332, 67,333 (Dep’t of Commerce 

Nov. 9, 2012).

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10 JIAXING BROTHER FASTENER CO. v. US

Philippines, observing that both countries were significant producers of comparable merchandise, Commerce

determined that the Thai data was the best available 

information on record. J.A. 1387–88. Commerce explained that the cost of steel wire rod was the factor with 

the greatest significance and impact on normal value. 

According to Commerce, the Thai information was the 

most specific data available for this critical factor. J.A. 

1389. 

Procedural History 

On November 28, 2012, Jiaxing appealed the final results to the Court of International Trade (“Trade Court”), 

arguing that Commerce erred in selecting Thailand as the 

primary surrogate country over India and the Philippines. 

J.A. 1441. 

On February 6, 2014, the Trade Court affirmed Commerce’s exclusion of India as a potential surrogate country, but remanded for clarification on the basis for 

selecting Thailand as the surrogate country. Jiaxing 

Brother Fastener Co. v. United States (Jiaxing I), 961 F. 

Supp. 2d 1323, 1335 (Ct. Int’l Trade 2014). The Trade 

Court found that India did not satisfy Commerce’s requirements for economic comparability. Id. at 1329–32. 

Comparing India’s per capita GNI of $1,340 against

China’s per capita GNI of $4,260, the Trade Court concluded that “it is difficult to envision how India would 

have been a reasonable or defensible choice on this administrative record.” Id. at 1329. Taken together, 

“Commerce’s only real choice was not between India and 

Thailand, but between Thailand and the Philippines.” Id.

at 1332. The Trade Court remanded for reconsideration 

of Commerce’s selection of Thailand over the Philippines. 

Id. at 1332–35. Although the Trade Court found the Thai 

data “apparently more specific,” the Trade Court determined that Commerce had not adequately explained 

whether the more specific Thai input data on steel outCase: 15-1161 Document: 68-2 Page: 10 Filed: 04/21/2016
JIAXING BROTHER FASTENER CO. v. US 11

weighed the “apparent comparative strengths” of the 

Philippine data on financial statements and HCl. Id. at 

1334–35. The Trade Court further instructed Commerce 

to reassess its preference for using a single surrogate 

country to source all data to calculate normal value. Id. 

On May 9, 2014, Commerce again found on remand 

that Thailand offered superior data for calculating normal 

value.15 J.A. 1422–40. Commerce observed that both the 

Philippines and Thailand offered financial statements 

that met its administrative requirements. J.A. 1424–27. 

Commerce also found that both the Philippine and Thai 

data for HCl were specific, contemporaneous, and reliable. 

J.A. 1427–32. Noting the parity between the two candidate countries, Commerce emphasized the importance of 

steel wire rod:

Given that steel threaded rod is a type of steel 

fastener drawn from steel wire rod or steel round 

bar, in this case, these steel inputs are the most 

important [factors of production] to consider in 

the proper valuation of steel threaded rod. In 

fact, nearly all manufacturing costs were derived 

from the main steel inputs, and consist of a large 

majority of the [normal value].

J.A. 1432. Because one input dominated Jiaxing’s factors 

of production, Commerce found that the Thai steel data 

was superior and outweighed any weakness in the Thai 

financial statements or HCl input data. J.A. 1432. Jiaxing appealed Commerce’s remand redetermination. 

On September 25, 2014, the Trade Court affirmed the 

remand redetermination. Jiaxing Brother Fastener Co. v. 

United States (Jiaxing II), 11 F. Supp. 3d 1326, 1333 (Ct. 

 

15 Results of Redetermination Pursuant to Jiaxing 

Brother Fastener Co., Ltd. v. United States Court No. 12-

00384, Slip Op. 14-12 (February 6, 2014) (May 9, 2014).

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12 JIAXING BROTHER FASTENER CO. v. US

Int’l Trade 2014). The Trade Court reasoned that the cost 

of steel wire rod drove almost the entire value of steel 

threaded rod and that the Thai financial information

provided by CEN was representative of Jiaxing’s financial 

ratios. Id. at 1330–32. Reviewing Commerce’s selection 

of Thailand over the Philippines, the Trade Court determined that the Thai import data identified specific grades 

of steel with varying carbon content that could be 

matched to the low-carbon grade of steel used by Jiaxing, 

while the Philippine import data provided broader categories that were not as specific. Id. at 1330–32. The Thai 

data also provided values for all factors of production, 

whereas the Philippine data set was missing certain 

values. Id. at 1333. 

Jiaxing appeals. We have jurisdiction under 28 

U.S.C. § 1295(a)(5) (2012). 

STANDARD OF REVIEW

We review Trade Court decisions de novo, applying 

the same standard used by the Trade Court when reviewing Commerce decisions. Downhole Pipe & Equip., L.P. v. 

United States, 776 F.3d 1369, 1373 (Fed. Cir. 2015) (citation omitted). Under that standard, we will uphold 

Commerce’s determinations unless they are “unsupported 

by substantial evidence on the record, or otherwise not in 

accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). 

Substantial evidence is “more than a mere scintilla” 

and amounts to what a “reasonable mind might accept as 

adequate to support a conclusion.” Downhole, 776 F.3d at 

1374 (quoting Consol. Edison Co. of N.Y. v. NLRB, 305 

U.S. 197, 229 (1938)). Our review is limited to the record 

before Commerce in the particular review proceeding at 

issue and includes all “evidence that supports and detracts” from Commerce’s conclusion. Sango Int’l L.P. v. 

United States, 567 F.3d 1356, 1362 (Fed. Cir. 2009). An 

agency finding may still be supported by substantial 

evidence even if two inconsistent conclusions can be 

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JIAXING BROTHER FASTENER CO. v. US 13

drawn from the evidence. Downhole, 776 F.3d at 1374 

(citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 

(1966)).

We review de novo whether Commerce erred in interpreting a governing statute. PSC VSMPO-Avisma Corp. 

v. United States, 688 F.3d 751, 763 (Fed. Cir. 2012) (citing 

Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 

467 U.S. 837 (1984)).16 

DISCUSSION

Jiaxing argues that Commerce’s choice of Thailand as 

the surrogate country over India and the Philippines was 

erroneous on three distinct grounds.17 First, Jiaxing 

 

16 Although the parties agree that the statute at issue is clear, they disagree as to whether Commerce’s 

interpretation conflicts with the statute’s express terms. 

Because the parties do not argue that the statutory language is ambiguous, we assume, without deciding, that 

the language is unambiguous. Accordingly, in this case, 

we address whether Commerce gave “effect to the unambiguously expressed intent of Congress,” a review conducted without affording deference to the agency. 

Chevron, 467 U.S. at 842.

17 At the outset, we consider the government’s contention that Jiaxing waived two issues on appeal. First, 

the government argues that Jiaxing failed to argue before 

the Trade Court that Commerce erred in not addressing 

production comparability when selecting the preliminary 

list of surrogate country candidates. Second, the government argues that Jiaxing did not address below its transparency/consistency concerns as to the shift away from 

India as a surrogate country to China. Jiaxing counters 

that those issues are subject to this appeal because they 

stem from the findings and conclusions in Jiaxing I and 

Jiaxing II, some of which could not be raised until now. 

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14 JIAXING BROTHER FASTENER CO. v. US

argues that Commerce’s decision to exclude India reflects 

erroneous interpretations of the antidumping statute and 

findings not supported by substantial evidence. Second, 

Jiaxing contends that the selection of Thailand was 

arbitrary and capricious because India has traditionally 

served as the surrogate country, and there is no legal 

basis for Commerce to depart from its long-standing 

practice. Third, Jiaxing asserts that the selection of 

Thailand is not supported by substantial evidence. We 

take each argument in turn. 

Commerce’s Decision to Exclude India

We first address whether Commerce’s decision to not 

consider India as a potential surrogate country is based 

on a permissible construction of the statute. As noted 

above, neither party argues that the statute is ambiguous. 

We therefore are left to determine whether Commerce’s 

decision to not consider India as a surrogate country (or a 

surrogate country candidate) conflicts with the statute’s 

express terms. See United States v. Eurodif S.A., 555 U.S. 

305, 322 (2009). 

 

Reviewing the decisions below, we find that those issues 

are subsumed in the arguments below and appear properly before us because Jiaxing asserted that the underlying 

statute was interpreted and applied erroneously to exclude India from consideration as a surrogate country 

candidate. We do, however, agree with the government’s 

contention that Jiaxing waived another argument on 

appeal—its argument that Commerce set forth the GNI 

band width without any reasoned explanation for its 

choice. As the government points out, Jiaxing failed to 

make this argument during the administrative and trial 

proceedings, and we decline to consider it for the first 

time on appeal. 

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JIAXING BROTHER FASTENER CO. v. US 15

We discern nothing in the statute that requires Commerce to consider any particular country as a surrogate 

country. When Congress does not mandate a procedure or 

methodology for applying a statutory test, “Commerce 

may perform its duties in the way it believes most suitable.” See JBF RAK LLC v. United States, 790 F.3d 1358, 

1364 (Fed. Cir. 2015) (internal quotation marks and 

citation omitted). Here, Commerce has provided reasoned 

analysis in support of its surrogate country determination, which we find to be supported by substantial evidence.

Commerce’s Selection of Thailand over India

We next consider Jiaxing’s assertion that Commerce 

has a long and established practice of using India as a 

surrogate country and that its selection of Thailand was 

contrary to law and unsupported by substantial evidence. 

Jiaxing notes that India has been a surrogate country to 

China for nearly three decades. To suddenly not include 

India on the list of alternative surrogate countries demonstrates, in Jiaxing’s view, a lack of transparency and an 

inconsistency with Commerce’s past practices, which in 

turn causes a lack of predictability for nonmarket respondents. In Clearon, Jiaxing argues, the Trade Court

remanded for reconsideration of the proper surrogate 

country because Commerce, with no justification, departed from its past practices by not identifying India as a 

candidate. See Clearon Corp. v. United States, 36 I.T.R.D. 

(BNA) 788, 2014 Ct. Intl. Trade LEXIS 88, at *23 (Ct. 

Int’l Trade July 24, 2014) (“The need for an agency to 

adequately address a departure from past practice is a 

compelling justification for a remand request.”). According to Jiaxing, Clearon demonstrates the influential role 

that India has played over the years as a surrogate to 

China. We disagree that Commerce is forever bound by 

its past practices.

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16 JIAXING BROTHER FASTENER CO. v. US

The record demonstrates that Commerce considered 

Jiaxing’s arguments that favored India, and that its 

rejection of them during the second administrative review 

was consistent with the antidumping statute and supported by substantial evidence: 

India, though, had a per capita GNI of $1,340, 

whereas [China] had a per capita GNI of $4,260. 

Given that disparity, as well as the availability of 

surrogate value data from two other economically 

comparable countries, Commerce’s decision to not 

select India appears reasonable; it is difficult to 

envision how India would have been a reasonable 

or defensible choice on this administrative record. 

. . . .

[Jiaxing], however, omit[s] from [its] analysis other apparent “material factors of economic comparability” contained on the administrative record 

that tend to demonstrate greater similarities between [China] and Thailand than [China] and India, including per capita GDP, life expectancy, 

adult literacy, and GDP composition by sector of 

origin.

. . . . 

India therefore could never be a reasonable choice 

because at least one country, the Philippines, satisfies the statutory criterion of economic comparability, whereas India does not. [Jiaxing’s]

argument about the qualitative superiority of Indian data compared to Thai data ultimately concentrates on a false choice.

Jiaxing I, 961 F. Supp. 2d at 1329, 1330–32 (citations 

omitted). 

That India has a long history as serving as the surrogate country to China does not mean Commerce is reCase: 15-1161 Document: 68-2 Page: 16 Filed: 04/21/2016
JIAXING BROTHER FASTENER CO. v. US 17

strained from considering the adequacy of other countries 

to serve that role. Commerce is required to base surrogate country selection on the facts presented in each case, 

and not on grounds of perceived tradition. “[E]ach administrative review is a separate exercise of Commerce’s 

authority that allows for different conclusions based on 

different facts in the record.” Qingdao, 766 F.3d at 1387. 

There is no legal requirement that India serve as a surrogate country to China. Clearon, 36 I.T.R.D. (BNA) 788, 

2014 Ct. Intl. Trade LEXIS 88, at *34 (“Commerce is not 

required by statute or regulation to select the same surrogate country it did in previous reviews, or the country 

with largest economy, or the most populated country . . . 

.”). Nor did the selection process lack transparency. 

Commerce reviewed the parties’ comments submitted 

after it issued the list of potential surrogate countries, 

and Commerce provided notice of its preliminary and 

final determinations—even though Commerce was not 

required to give prior notice that it had selected Thailand 

over India. Cf. Tehnoimportexport v. United States, 766 F. 

Supp. 1169, 1175 (Ct. Int’l Trade 1991) (holding 

that Commerce had no obligation to notify the parties 

beforehand that it had chosen a different surrogate country for the final determination than it used in the initial 

determination). We hold that Commerce’s past practice 

alone of selecting India as the surrogate country does not 

restrain Commerce from selecting a country other than 

India to serve as the surrogate country.

Commerce’s Selection of Thailand over the 

Philippines

We next address whether Commerce’s selection of 

Thailand over the Philippines as the surrogate country

was contrary to law and not supported by substantial 

evidence. Jiaxing argues that Commerce erred in (1) 

relying on the financial statement of the Thai corporation 

CEN, (2) emphasizing the value of steel over other inputs, 

and (3) favoring Thai HCl data over Philippine HCl data. 

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18 JIAXING BROTHER FASTENER CO. v. US

First, Jiaxing argues that the CEN financial statement was not the best available information available in 

the record. In addition to CEN’s financial statement, the 

record contains four Indian and four Philippine financial 

statements. Jiaxing argues that Commerce’s use of the 

CEN financial statement is unreasonable because CEN’s 

principal business is investment, not steel production. 

J.A. 661. Jiaxing cites a previous Commerce decision that 

CEN was not a manufacturer of steel wire rod.18 Jiaxing 

also challenges the accuracy of the CEN financial statement, arguing that the statement does not provide cost 

breakouts and that the record lacked an originallanguage-translation version of the statement. Jiaxing 

further asserts that CEN is a beneficiary of “concessionary tax rates,” which skews the data. 

Second, Jiaxing asserts that Commerce erred in emphasizing steel inputs at the expense of non-conforming 

data. Jiaxing notes that the Thai wire rod values are 40% 

higher than the world market prices, and that Vulcan 

recently sued Thailand for dumping and injuring the U.S.

steel threaded rod industry.19 

Jiaxing further argues that the Thai import value for 

HCl is questionable because the data are inconsistent 

with the value of domestic Thai HCl products and the 

import value of HCl products shipped by other countries

to Thailand. J.A. 12–14. 

 

18 See Steel Wire Garment Hangers From the People’s

Republic of China: Antidumping Duty Administrative 

Review, 2010-2011, 77 Fed. Reg. 66952 (Nov. 8, 2012) 

(“Wire Hangers”).

19 See Steel Threaded Rod From Thailand: Preliminary Determination of Sales at Less Than Fair Value and 

Affirmative Preliminary Determination of Critical Circumstances, 78 Fed. Reg. 79670 (Dep’t of Commerce Dec. 

31, 2013). 

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JIAXING BROTHER FASTENER CO. v. US 19

We conclude that Commerce’s selection of Thailand 

over the Philippines as the surrogate country is reasonable and supported by substantial evidence. The question 

here is not whether the information Commerce used was 

the best available, but rather whether a reasonable mind 

could conclude that Commerce chose the best available 

information. Zhejiang DunAn Hetian Metal Co. v. United 

States, 652 F.3d 1333, 1341 (Fed. Cir. 2011). 

We also conclude that Commerce reasonably relied on 

the CEN financial statement, and that substantial evidence supports Commerce’s findings. The record shows 

that only three of the Philippine financial statements are 

relevant because one company produces steel wire mesh 

fencing, which is not drawn from wire rod. J.A. 1393–94. 

Although CEN was primarily an investment company, 

one of its subsidiaries produced pre-stressed concrete 

wire, which is drawn from wire rod. CEN also generated 

almost 50% of its income in 2010 from wire industries. 

J.A. 629. In addition, the CEN financial statement presented financial ratios similar to Jiaxing. J.A. 1393. 

Jiaxing’s argument that Commerce’s rejection of 

CEN’s financial statement in Wire Hangers compels the 

same result in this case is unpersuasive. We agree with 

the Trade Court that the CEN data in this case is different than that in Wire Hangers: 

The CEN data at issue in this review is not the 

same as the CEN data in Wire Hangers. The Wire 

Hangers review focused on a CEN financial 

statement from 2011 whereas this record features 

a CEN annual report from 2010. [Vulcan] clarifies that the 2010 annual report on this record includes CEN’s 2010 financial statement as well as 

extra details about the operations of CEN’s subsidiaries. Commerce also explains that steel 

threaded rod and wire hangers do not have identical manufacturing processes or inputs. 

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20 JIAXING BROTHER FASTENER CO. v. US

Jiaxing II, 11 F. Supp. 3d at 1330 (emphases in original 

and internal citations omitted). 

Commerce correctly rejected arguments that CEN received certain concessionary taxes that could have 

skewed the CEN data. The record evidence shows that 

any concessionary taxes that were received by CEN 

occurred outside the relevant review period. In addition, 

there is no record evidence that the CEN financial statement was translated inaccurately or was otherwise erroneous. 

Commerce’s decision to emphasize the steel input was 

reasonable and supported by substantial evidence. Jiaxing does not dispute that steel is the main input and 

primary driver of cost for steel threaded rod. Though the 

data may be imperfect, the administrative record supports the conclusion that the Thai data identified a low 

carbon variety that matches more closely to the main 

input of the subject merchandise than the data that 

Jiaxing proposes. Home Meridian Int’l, Inc. v. United 

States, 772 F.3d 1289, 1296 (Fed. Cir. 2014) (“The data on 

which Commerce relies to value inputs must be the ‘best 

available information,’ but there is no requirement that 

the data be perfect.”).

Commerce’s choice to prioritize steel costs over other 

inputs is also not erroneous because almost all Jiaxing’s 

production costs are subsumed by the cost of steel. See 

Downhole Pipe, 776 F.3d at 1380 (endorsing the use of a 

“primary input” to calculate surrogate value). That Thai 

steel prices are unusually high does not in this case 

necessarily imply that the prices are aberrant where the 

evidence shows that Thai steel was superior to Philippine 

steel. See Downhole Pipe, 776 F.3d at 1380 (rejecting that 

an “aberrantly high” value is “outside the bounds of 

commercial reality,” and holding that the value was “the 

best evidence available on the record”).

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JIAXING BROTHER FASTENER CO. v. US 21

Finally, we find no error in Commerce’s determination 

to use Thai import statistics to value HCl, a conclusion in 

accordance with its administrative preference to appraise 

surrogate values from a single surrogate country. See 19 

C.F.R. §351.408(c)(2). The record evidence shows that the 

HCl import statistics from India and Thailand were 

equally usable (both were specific, contemporaneous, and 

represented broad market averages), so Commerce’s 

choice to use the Thai import statistics is supported by 

substantial evidence. 

CONCLUSION

Commerce’s decision to select Thailand as the surrogate country on which to base Chinese cost of production, 

values was reasonable, supported by substantial evidence, 

not arbitrary or capricious, and otherwise in accordance 

with law. The decision of the Trade Court is affirmed. 

AFFIRMED

COSTS

Each party shall bear its own costs. 

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