United States Court of Appeals 

for the Federal Circuit ______________________ 

NEXTEEL CO., LTD.,

Plaintiff-Appellee

SEAH STEEL CORP.,

Plaintiff-Cross-Appellant

v.

UNITED STATES, MAVERICK TUBE 

CORPORATION, TENARIS BAY CITY, INC.,

Defendants-Appellees

UNITED STATES STEEL CORPORATION,

Defendant-Appellant

______________________ 

2021-1334, 2021-1430

______________________ 

Appeals from the United States Court of International 

Trade in No. 1:18-cv-00083-JCG, Judge Jennifer ChoeGroves. 

______________________ 

Decided: March 11, 2022

______________________ 

HENRY DAVID ALMOND, Arnold & Porter Kaye Scholer 

LLP, Washington, DC, argued for plaintiff-appellee. Also 

represented by LESLIE BAILEY, CHRISTINE CHOI, KANG WOO 

LEE, J. DAVID PARK, DANIEL WILSON. 

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2 NEXTEEL CO., LTD. v. US

 JEFFREY M. WINTON, Winton & Chapman PLLC, Washington, DC, argued for plaintiff-cross-appellant. Also represented by MICHAEL JOHN CHAPMAN, JOOYOUN JEONG, VI 

MAI. 

 HARDEEP KAUR JOSAN, International Trade Field Office, United States Department of Justice, New York, NY, 

argued for defendant-appellee United States. Also represented by BRIAN M. BOYNTON, CLAUDIA BURKE, JEANNE 

DAVIDSON; MYKHAYLO GRYZLOV, Office of the Chief Counsel 

for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC. 

 GREGORY J. SPAK, White & Case LLP, Washington, DC,

for defendants-appellees Maverick Tube Corporation, 

Tenaris Bay City, Inc. Also represented by FRANK JOHN 

SCHWEITZER, MATTHEW WOLF SOLOMON, KRISTINA ZISSIS. 

 THOMAS M. BELINE, Cassidy Levy Kent (USA) LLP, 

Washington, DC, argued for defendant-appellant. Also 

represented by MYLES SAMUEL GETLAN, JAMES EDWARD 

RANSDELL, IV, SARAH E. SHULMAN. 

 ______________________ 

Before O’MALLEY, BRYSON, and HUGHES, Circuit Judges.

HUGHES, Circuit Judge.

This appeal arises out of the United States Department 

of Commerce’s administrative review of its antidumping 

order on oil country tubular goods from the Republic of Korea. 

Calculating constructed value, Commerce found five 

circumstances that created a “particular market situation” 

affecting inputs to oil country tubular goods. The Court of 

International Trade determined that this finding was not 

supported by substantial evidence and “direct[ed] Commerce to reverse its finding of a particular market 

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NEXTEEL CO., LTD. v. US 3

situation.” NEXTEEL Co. v. United States, 450 F. Supp. 3d 

1333, 1343 (Ct. Int’l Trade 2020). We find that three of the 

five circumstances Commerce relied on to show a particular market situation are not supported by substantial evidence. Thus, with modified reasoning, we affirm the trial 

court’s conclusion that substantial evidence does not support Commerce’s finding. But because the Court of International Trade lacks authority to reverse Commerce, we 

vacate the trial court’s opinion to the extent that it directs

Commerce to reach a certain outcome.

Comparing normal value to export price, Commerce relied on its “differential pricing analysis” methodology. In 

Stupp Corp. v. United States, 5 F.4th 1341 (Fed. Cir. 2021), 

we vacated aspects of Commerce’s differential pricing analysis over concerns about Commerce’s use of statistical 

methodologies when certain preconditions for their use are 

not met. Id. at 1360. Commerce’s analysis here raises identical concerns, so we vacate the trial court’s decision upholding the methodology and remand for reconsideration 

in view of Stupp. 

Seeing no error in the other methodologies that CrossAppellant challenges, we otherwise affirm.

BACKGROUND

In 2016, the Department of Commerce initiated its second administrative review of the antidumping order on oil 

country tubular goods (OCTG) from the Republic of Korea

(Korea). Certain Oil Country Tubular Goods from the Republic of Korea: Preliminary Results of Antidumping Duty 

Administrative Review; 2015-2016, 82 Fed. Reg. 46,963, 

46,963 (Oct. 10, 2017) (Preliminary Results). The review 

covered the period from September 1, 2015 through August 

31, 2016. Id. Commerce selected for individual examination

the two companies that accounted for the largest volume of 

subject merchandise during the period of review, 

NEXTEEL Co., Ltd. and SeAH Steel Corporation. Decision 

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4 NEXTEEL CO., LTD. v. US

Memorandum for Preliminary Results, at 2, 82 ITADOC 

46,963 (Oct. 2, 2017) (Preliminary Results Memo). 

In an antidumping review, Commerce generally compares the price at which the subject merchandise is sold in 

the United States to the “normal value,” which is the price 

of like products in the exporting country or a third country. 

19 U.S.C. §§ 1677(35), 1677a(a), 1677b(a). Calculating normal value, Commerce determined that “neither respondent 

had a viable home market or third-country market during 

the [period of review].” Preliminary Results Memo at 11. 

Commerce therefore based its calculation of the normal 

value on constructed value pursuant to 19 U.S.C. 

§ 1677b(a)(4). Preliminary Results Memo at 11. Constructed value is based on the costs of producing and selling 

the merchandise, with an allowance for profits. 19 U.S.C. 

§ 1677b(e). 

Considering costs, Commerce found “a particular market situation” under 19 U.S.C. § 1677b(e), affecting two inputs to OCTG: hot-rolled coil (HRC) and electricity. 

Decision Memorandum for Final Results, at 16–17, 83 

ITADOC 17,146 (Apr. 11, 2018) (Final Results Memo). 

Commerce found a particular market situation “based on 

the collective impact of Korean HRC subsidies, Korean imports of HRC from China, strategic alliances, and government involvement in the Korean electricity market.” Id. at 

17. Having found a particular market situation, Commerce 

adjusted the cost of HRC in its calculation based on the

countervailing duty rate determined for POSCO, a Korean 

HRC producer, in Hot-Rolled Steel Flat Products from Korea. Final Results Memo at 29;1 Appx7560 (SeAH Preliminary Results Analysis Memorandum). 

1 Citing Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of 

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NEXTEEL CO., LTD. v. US 5

Commerce calculated the profit component of constructed value under § 1677b(e)(2)(B)(iii), which allows 

Commerce to calculate profits using “any other reasonable 

method, except that the amount allowed for profit may not 

exceed the amount normally realized by exporters or producers (other than [the specific exporter or producer examined]).” The agency calculated profit based on SeAH’s 

Canadian sales of OCTG. Final Results Memo at 55. Turning to the profit cap, Commerce again relied on SeAH’s Canadian sales as “facts available.” Id. at 60. Commerce 

reasoned that these sales were the best choice for a profit 

cap because they are “specific to OCTG and represent[] the 

production experience of a Korean OCTG producer in Korea.” Id.

When calculating export price, Commerce adjusted for 

freight expenses pursuant to 19 U.S.C. § 1677a(c)(2)(A). Final Results Memo at 87–88. Following its “normal practice,” Commerce capped the amount of freight revenue in 

its calculation at the amount of freight charges incurred.

Id. at 87; Appx7554–55 (SeAH Preliminary Results Analysis Memorandum). 

Finally, Commerce compared export price and normal 

value. Employing its “differential pricing analysis” methodology based on a statistic called “Cohen’s d,” Commerce 

found a pattern of U.S. prices that “differ significantly 

among purchasers, regions, or periods of time” under 19 

U.S.C. § 1677f-1(d)(1)(B)(i). Based on this analysis, Commerce used an “average-to-transaction” comparison

method, Preliminary Results Memo at 10–11; Final Results 

Memo at 76, comparing averaged normal value prices to 

Korea: Final Affirmative Determination, 81 Fed. Reg. 

53,439 (Aug. 12, 2016), as amended by 81 Fed. Reg. 67,960 

(Oct. 3, 2016).

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6 NEXTEEL CO., LTD. v. US

non-averaged export prices of individual transactions, 19 

U.S.C. § 1677f-1(d)(1)(B). 

NEXTEEL and SeAH appealed the Final Results to the 

Court of International Trade, arguing that Commerce’s 

particular market situation, profit cap, freight revenue cap, 

and differential pricing analyses were unsupported by substantial evidence or not in accordance with law. NEXTEEL

Co. v. United States, 392 F. Supp. 3d 1276, 1282–83. (Ct. 

Int’l Trade 2019) (NEXTEEL I). The court concluded that 

Commerce’s particular market situation finding was unsupported by substantial evidence. Id. at 1288. It remanded for further proceedings on that issue. Id. The court 

affirmed Commerce’s profit cap, freight revenue cap, and 

differential pricing analyses. Id. at 1290, 1293, 1295–97. 

On remand, Commerce continued to find a particular 

market situation, relying on a fifth factor, “steel industry 

restructuring effort by the Korean government,” along with

the previous four. Final Results of Redetermination Pursuant to Ct. Remand at 20, NEXTEEL I, 392 F. Supp. 3d 1276

(No. 18-00083), ECF No. 81-1 (First Remand Results).

Reviewing Commerce’s first remand results, the Court 

of International Trade rejected Commerce’s finding of a 

particular market situation as unsupported by substantial 

evidence, “both when viewing the five factors individually 

and collectively.” NEXTEEL Co. v. United States, 450 F. 

Supp. 3d 1333, 1343 (Ct. Int’l Trade 2020) (NEXTEEL II).

The court remanded the issue to Commerce a second time, 

this time “direct[ing] Commerce to reverse its finding of a 

particular market situation.” Id.

Under protest, Commerce reversed its finding of a particular market situation and recalculated the dumping 

margins accordingly. Final Results of Redetermination 

Pursuant to Ct. Remand at 4–5, NEXTEEL II, 450 F. Supp. 

3d 1333 (No. 18-00083), ECF No. 96-1 (Second Remand Results). The Court of International Trade affirmed 

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NEXTEEL CO., LTD. v. US 7

Commerce’s second remand results. NEXTEEL Co. v. 

United States, 475 F. Supp. 3d 1378, 1380 (Ct. Int’l Trade

2020).

United States Steel appeals, challenging the trial 

court’s ruling that Commerce’s finding of a particular market situation is unsupported by substantial evidence, as 

well as the trial court’s direction to Commerce to reach a 

particular outcome on its second remand. SeAH cross appeals, challenging the trial court’s affirmance of Commerce’s differential pricing analysis, its freight revenue 

cap, and its use of SeAH’s own data as a profit cap. 

ANALYSIS

I. Standard of Review

“We review a decision of the Court of International 

Trade evaluating an antidumping determination by Commerce by reapplying the statutory standard of review that 

the Court of International Trade applied in reviewing the 

administrative record.” Peer Bearing Co.-Changshan v. 

United States, 766 F.3d 1396, 1399 (Fed. Cir. 2014). Thus,

“[w]e will uphold Commerce’s determination unless it is 

unsupported by substantial evidence on the record or otherwise not in accordance with the law.” Id.; 19 U.S.C. 

§ 1516a(b)(1)(B)(i). 

When “identifying, selecting and applying methodologies to implement the dictates set forth in the governing 

statute,” we recognize the technical expertise of the agency 

and give it deference “both greater than and distinct from 

that accorded the agency in interpreting the statutes it administers.” Fujitsu Gen. Ltd. v. United States, 88 F.3d 

1034, 1039 (Fed. Cir. 1996). 

II. Particular Market Situation

The Trade Preferences Extension Act of 2015 (TPEA) 

allows Commerce to consider a “particular market situation” when calculating constructed value. Pub. L. No. 114-

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8 NEXTEEL CO., LTD. v. US

27, § 504, 129 Stat. 362, 385. Under 19 U.S.C. § 1677b(e), 

as revised by the TPEA,

if a particular market situation exists such that the 

cost of materials and fabrication or other processing of any kind does not accurately reflect the 

cost of production in the ordinary course of trade, 

the administering authority may use another calculation methodology under this part or any other 

calculation methodology. 

The statute does not define “particular market situation,” but the plain language of § 1677b(e) identifies the 

factual support Commerce must provide to invoke this provision. Commerce must find that the cost incurred to produce the subject merchandise “does not accurately reflect 

the cost of production in the ordinary course of trade.” 19 

U.S.C. § 1677b(e). As the Court of International Trade has 

noted, the circumstances supporting a “particular” market 

situation also must be “particular” to producers of the subject merchandise during the relevant period. See SeAH 

Steel Corp. v. United States, 513 F. Supp. 3d 1367, 1393

(Ct. Int’l Trade 2021). An ongoing global phenomenon 

would not alone constitute a deviation from the “ordinary 

course of trade.” 

Congress provided examples of a particular market situation: 

[A] “particular market situation” . . . might exist 

. . . where there is government control over pricing 

to such an extent that home market prices cannot 

be considered to be competitively set. It also may 

be the case that a particular market situation could 

arise from differing patterns of demand in the 

United States and in the foreign market. For example, if significant price changes are closely correlated with holidays which occur at different times 

of the year in the two markets, the prices in the 

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NEXTEEL CO., LTD. v. US 9

foreign market may not be suitable for comparison 

to prices to the United States.

Statement of Administrative Action, H.R. Rep. No. 103-

316, vol. 1, at 822 (1994), as reprinted in 1994 U.S.C.C.A.N. 

4040, 4162. These are all situations in which some circumstance distorts costs so that they are not set based on normal market forces or do not move with the rest of the 

market. 

Nothing in the statute requires Commerce to quantify 

the distortion precisely. Still, a quantitative comparison 

showing a difference between costs incurred and costs in 

the ordinary course of trade could be substantial evidence 

supporting the existence of a particular market situation. 

Likewise, evidence that costs do not differ at all from what 

they would have been in the ordinary course of trade would 

“fairly detract[] from the substantiality of the evidence.” 

Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. 

Cir. 1984).

Commerce found a particular market situation based 

on the “collective impact” of 

• Korean government subsidies for HRC production,

• strategic alliances between HRC suppliers 

and OCTG producers, 

• Korean government steel industry restructuring efforts, 

• Korean government involvement in the electricity market, and

• imports of low-priced HRC from China.

Final Results Memo at 17; First Remand Results at 20. We 

address these circumstances in turn.

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10 NEXTEEL CO., LTD. v. US

A. Korean Government HRC Subsidies 

Commerce determined that “[r]ecord evidence shows 

subsidization of HRC by the Korean government,” and because “approximately 80 percent of the cost of OCTG production” is the HRC input, “distortions in the HRC market

. . . have a significant impact on production costs of OCTG.” 

First Remand Results at 21. Commerce relied on an earlier 

investigation of HRC from Korea from January 1, 2014, 

through December 31, 2014, which, Commerce explained,

found a subsidy rate of almost 60% for POSCO. Id. at 21,

18 & n.84. Commerce found that the mandatory respondents in the present review bought HRC from POSCO in significant quantities. Id. at 21; see also Appx7560 (SeAH 

Preliminary Results Analysis Memorandum showing 

19.9% of HRC purchases from POSCO). 

Commerce arrived at the 60% subsidy rate after it determined that it “c[ould] not accurately calculate POSCO’s 

. . . subsidy rate.” Issues and Decision Memorandum for the 

Final Determination in the Countervailing Duty Investigation of Certain Hot-Rolled Steel Flat Products from the Republic of Korea, at 61, 81 ITADOC 53,439 (Aug. 4, 2016).

Commerce thus relied on facts otherwise available and 

made inferences adverse to POSCO, id., as permitted by 19 

U.S.C. § 1677e(a)–(b). The rate Commerce relied on was 

also from an earlier period of investigation that ended eight 

months before the present period of review. See id. at 3.

But in its first administrative review of the same countervailing duty order, Commerce found de minimis subsidy 

rates. Certain Hot-Rolled Steel Flat Products from the Republic of Korea: Final Results of Countervailing Duty Administrative Review, 2016, 84 Fed. Reg. 28,461, 28,461

(June 19, 2019), as amended by 84 Fed. Reg. 35,604 (July 

24, 2019). In that review, Commerce did not rely on adverse 

facts available. Commerce considered data from January 1, 

2016, through December 31, 2016, a period which overlaps 

with the period of review for this administrative review. 

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NEXTEEL CO., LTD. v. US 11

Decision Memorandum for the Preliminary Results of the 

Countervailing Duty Administrative Review, 2016: Certain Hot-Rolled Steel Flat Products from the Republic of 

Korea, at 4, 83 ITADOC 24,252 (October 30, 2018).2 This 

evidence is at least as probative of the Korean government’s actual subsidization during the period of review as 

the higher rate Commerce relied on.3

Commerce could support a finding of a particular market situation with evidence of subsidies to producers of an 

input to the subject merchandise. But the subsidies must

be shown to affect the price of the input so that it does “not 

accurately reflect the cost of production in the ordinary 

course of trade,” 19 U.S.C. § 1677b(e), and their effect must 

be “particular” to producers of the subject merchandise, see

SeAH Steel, 513 F. Supp. 3d at 1393. Here, the record evidence is at best mixed on whether significant Korean government subsidies existed during the period of review. 

Commerce made no finding that any subsidies were passed

through to the prices of HRC or that they affected Korean 

OCTG producers any more than OCTG producers elsewhere. See First Remand Results at 21. Thus, substantial 

2 This evidence was raised before the agency on remand. First Remand Results at 54, 59–60. 3 See also Certain Carbon and Alloy Steel Cut-toLength Plate from the Republic of Korea: Final Affirmative 

Countervailing Duty Determination and Final Negative 

Critical Circumstances Determination, 82 Fed. Reg. 

16,341, 16,341–42 (Apr. 4, 2017) (in an investigation of 

some of the same alleged subsidy programs as HRC, calculating a subsidy rate of only 4.31% based on partial adverse 

facts available and for a period of review that overlapped 

by four months with the period of review here); U.S. Steel 

Reply Br. 11 n.4 (“[A]t least nine programs alleged in [HotRolled Steel] Korea were also found countervailable in 

[Cut-to-Length] Plate.”).

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12 NEXTEEL CO., LTD. v. US

evidence does not support Commerce’s finding that Korean 

HRC subsidies contribute to a particular market situation. 

B. Strategic Alliances

Based on an affidavit showing that POSCO charged 

different prices to its affiliates than to its other customers, 

Commerce found that strategic alliances between HRC and 

OCTG producers “may have created distortions in the 

prices of HRC in the past, and may continue to impact HRC 

pricing in a distortive manner during the instant [period of 

review] and in the future.” Final Results Memo at 18. Commerce initially identified no evidence that either SeAH or 

NEXTEEL was part of such an alliance, that the alliances 

affected SeAH and NEXTEEL specifically, or that the alliances affected the Korean HRC market as a whole. See id.

(“[T]he record does not contain specific evidence showing 

that strategic alliances directly created a distortion in HRC 

pricing in the current period of review.”). On remand, Commerce bolstered its conclusion that such alliances exist by 

pointing to a SeAH Steel Group brochure that describes a 

SeAH Steel Group processing center “as the processing center for POSCO,” which Commerce concluded “demonstrates 

a close entanglement between HRC suppliers such as 

POSCO and OCTG producers.” First Remand Results at 

22–23. SeAH maintains that it was not affiliated with 

POSCO. SeAH explains that the SeAH entity that runs a 

“processing center for POSCO” referenced in the brochure 

had nothing to do with its OCTG operations, and that Commerce has previously found SeAH and POSCO to be unaffiliated. SeAH Resp. Br. 44; Appx7993–94 (SeAH 

Comments on Draft Remand Redetermination). 

Although the parties dispute whether a cost-based particular market situation adjustment must be supported by 

a showing of market-wide distortions or respondent-specific distortions, Commerce has shown neither. Commerce 

merely speculated that strategic alliances affected the Korean HRC market as a whole. Its showing of some 

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NEXTEEL CO., LTD. v. US 13

relationship between POSCO and SeAH is weak and contradicted by other record evidence. Substantial evidence 

does not support Commerce’s finding that strategic alliances contribute to a particular market situation. 

C. Steel Industry Restructuring

On remand, Commerce cited evidence of governmentled restructuring of the Korean steel industry. First Remand Results at 25–26. Commerce reasoned that “[t]he Korean government’s assistance to accelerate the steel 

industry’s response and restructuring interferes with the 

normal functioning of the free market and alters the ordinary course of trade.” Id. at 26. Commerce cited a press release from the Korean Ministry of Strategy and Finance 

announcing restructuring. Id. at 25. As the Court of International Trade noted, though, the period of review concluded on August 31, 2016, and the press release, dated

January 25, 2017, announced the Korean government’s 

“2017 Action Plan for Industrial Restructuring.” 

NEXTEEL II, 450 F. Supp. 3d at 1343. 

The announcement and other publications discussing

future restructuring efforts provide no evidence of actual 

government interference during the period of review. Substantial evidence does not support Commerce’s finding that 

steel industry restructuring efforts contributed to a particular market situation.

* * *

We affirm the Court of International Trade’s conclusions in NEXTEEL II that three of the circumstances Commerce cited do not support a finding of a particular market 

situation on the existing record.4

4 Because substantial evidence does not support the 

above three circumstances, we need not reach the issue of 

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Commerce has not taken a clear position on whether it 

believes the other two circumstances alone are sufficient. 

Indeed, in the First Remand Results, Commerce carefully 

avoided making such a finding. See First Remand Results 

at 27 (“Any one of these four factors can distort the market 

such that Commerce could reasonably conclude that a [particular market situation] exists. . . . [T]here is no suggestion that any one of the five factors alone is insufficient to 

establish the particular market situation. Rather, we evaluate the totality of the circumstances . . . .” (emphases 

added)). We are not free to substitute our own reasoning 

for that of the agency and must instead “review only the 

bases on which Commerce made its determination.” Thai 

I-Mei Frozen Foods Co. v. United States, 616 F.3d 1300, 

1307 (Fed. Cir. 2010); see also Bowman Transp., Inc. v. 

Ark.-Best Freight Sys., Inc., 419 U.S. 281, 285–86 (1974)

(“[W]e may not supply a reasoned basis for the agency’s action that the agency itself has not given . . . .”). But it is far 

from a foregone conclusion that Commerce would have 

found a particular market situation based on these two factors alone. 

Although low-priced Chinese steel could contribute to 

a particular market situation, the record does not show sufficient particularity for this circumstance to create a particular market situation on its own. Commerce 

acknowledged that significant quantities of cheaper Chinese HRC flow to many countries and “affect[] the whole 

world.” Final Results at 21; First Remand Results at 21–22 

(citing a government announcement stating that Chinese 

excess supply is targeted toward “Korea, ASEAN, and 

whether substantial evidence supports Commerce’s findings that each of the remaining two circumstances contributed to a particular market situation because Commerce 

explicitly relied on the presence and interaction of all five 

circumstances. See First Remand Results at 27.

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EU”); id. at 22 (citing an article from Asian Steel Watch 

that states “China’s largest [steel] export destination is 

South Korea” but also provides data showing that many 

other countries receive large quantities of Chinese steel).

Government control of electricity prices is a type of distortion expressly contemplated by Congress, but the evidence is mixed on whether the Korean government is 

involved “to such an extent that home market prices cannot 

be considered to be competitively set,” H.R. Rep. No. 103-

316, vol. 1 at 822, and whether the prices are any different 

from what they would be in the ordinary course of trade. 

First Remand Results at 65 (citing a report showing that 

Korean electricity prices are lower than Japan’s but comparable to median prices among all countries studied). 

Commerce’s countervailing duty determinations have consistently found that Korean electricity prices are set in accordance with market principles and thus that Korean 

steel producers have not benefited from government involvement in Korean electricity pricing. E.g., POSCO v. 

United States, 337 F. Supp. 3d 1265, 1282–83 (Ct. Int’l 

Trade 2018) (upholding Commerce’s finding that the Korean electricity prices were “set in accordance with market 

principles,” covered costs, and did not confer a benefit to 

the subject producers); POSCO v. United States, 353 F. 

Supp. 3d 1357, 1368–73 (Ct. Int’l Trade 2018) (sustaining 

similar findings for a period of investigation from January 

1, 2015 through December 31, 2015); Maverick Tube Corp. 

v. United States, 273 F. Supp. 3d 1293, 1303–12 (Ct. Int’l 

Trade 2017) (sustaining similar findings for welded line 

pipe from Korea). Commerce has not justified its departure 

from those findings here. See First Remand Results at 66. 

We therefore affirm the trial court’s decision in 

NEXTEEL II that Commerce’s conclusion—“the presence 

of all five factors, as well as the interaction of the five factors with one another, supports the finding that a [particular market situation] existed in Korea during the relevant 

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16 NEXTEEL CO., LTD. v. US

period,” First Remand Results at 27—was not supported by 

substantial evidence.

III. The Court of International Trade’s Reversal 

Remanding for the second time, the Court of International Trade “direct[ed] Commerce to reverse its finding of 

a particular market situation.” NEXTEEL II, 450 F. Supp.

3d at 1343. 

“[T]he Court of International Trade is precluded by 

statute from ever outright reversing a decision by Commerce . . . when reviewing countervailing duty and antidumping duty proceedings. Rather, at most it can simply 

remand for further consideration consistent with its decision.” Ad Hoc Shrimp Trade Action Comm. v. United 

States, 515 F.3d 1372, 1383 (Fed. Cir. 2008); 19 U.S.C. 

§ 1516a(c)(3). Remand is appropriate because “the record 

may well be enlarged” and “even if it is not, new findings 

and explanations by the Commission can be expected.” 

Nippon Steel Corp. v. Int’l Trade Comm’n, 345 F.3d 1379, 

1380–82 (Fed. Cir. 2003) (Nippon I) (holding that the Court 

of International Trade exceeded its authority by re-weighing the evidence and directing a particular outcome on its 

second remand). Even so, an open-ended remand may not 

be required if it would be “futile,” Nippon Steel Corp. v. 

United States, 458 F.3d 1345, 1359 (Fed. Cir. 2006) (Nippon II), for example because the record supports only one 

outcome, see Nucor Corp. v. United States, 371 F. App’x 83, 

90 (Fed Cir. 2010). 

As in Nippon I, the court issued its directed remand 

after one open-ended remand. NEXTEEL II, 450 F. Supp.

3d at 1343. The court reversed Commerce based on its 

weighing of the evidence, e.g., discounting evidence that 

predated the period of review, id. at 1339–42, and not because the record supports only one outcome. Indeed, in 

view of the conflicting evidence discussed above, the record 

evidence does not appear to support the absence of a particular market situation any more than it supports the 

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NEXTEEL CO., LTD. v. US 17

existence of one. Remand was thus no more futile than in 

Nippon I. The court exceeded its authority by directing 

Commerce to reach a particular outcome. On remand, Commerce may seek to justify the particular market situation 

in accordance with this opinion. 

IV. Differential Pricing Analysis

By default, Commerce calculates dumping margins by 

comparing averaged normal value sales to averaged export 

prices. 19 U.S.C. § 1677f-1(d)(1)(A)(i). Commerce may instead use an “average-to-transaction” comparison, comparing averaged normal value sales to export prices of 

individual transactions, if it finds a “pattern” of U.S. prices 

that “differ significantly among purchasers, regions, or periods of time.” 19 U.S.C. § 1677f-1(d)(1)(B).

To show such a “pattern,” Commerce uses its “differential pricing analysis” methodology based on a statistic 

called “Cohen’s d.” Based on this analysis, Commerce relied 

on an average-to-transaction comparison here. Preliminary 

Results Memo at 10–11; Final Results Memo at 76. 

SeAH argues Commerce’s methodology was flawed because Commerce relied on Cohen’s d even though the express conditions for its application were not satisfied: that 

the data sets being compared be normally distributed, have 

at least 20 or more data points, and have roughly equal 

variances. SeAH Resp. Br. 67–68. Our recent opinion in 

Stupp Corp. v. United States, 5 F.4th 1341 (Fed. Cir. 2021), 

addressed the same argument and vacated the Court of International Trade’s decision upholding the differential 

pricing analysis. Id. at 1360. Because Commerce’s use of 

Cohen’s d here presents identical concerns to those in

Stupp,5 we vacate this portion of NEXTEEL I and remand 

5 See Oral Argument at 36:28–43, 42:37–57,

https://oralarguments.cafc.uscourts.gov/default.aspx?fl=

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to the Court of International Trade to reconsider in view of 

Stupp. 

V. Freight Revenue Cap

To achieve a “fair comparison” between normal value 

and export price, Commerce must adjust for shipping. See 

19 U.S.C. § 1677b(a); Torrington Co. v. United States, 68 

F.3d 1347, 1353 (Fed. Cir. 1995). The export price must be 

“reduced by . . . the amount, if any, included in such price, 

attributable to any additional costs, charges, or expenses, 

. . . which are incident to bringing the subject merchandise 

from the original place of shipment in the exporting country to the place of delivery in the United States.” 19 U.S.C. 

§ 1677a(c)(2)(A). 

Commerce starts with the amount charged to the customer for the subject merchandise and subtracts the net 

freight expense. Dongguan Sunrise Furniture Co. v. United 

States, 36 Ct. Int’l Trade 860, 893 (2012). The net freight 

expense is the cost of freight (“freight expense”) less the 

amount charged to the customer for freight (“freight revenue”). Id. Commerce’s “normal practice” is to cap freight 

revenue at freight cost. Final Results Memo at 87; see 

Dongguan, 36 Ct. Int’l Trade at 893. Thus, no adjustment 

is made if revenue exceeds freight expenses. 

Section 1677a(c)(2)(A) requires Commerce to make a 

freight adjustment but does not specify the method to calculate the adjustment, including whether the “costs, 

charges, or expenses” incident to moving the subject merchandise should be calculated based on net or gross expenses. See Dongguan, 36 Ct. Int’l Trade at 894; SeAH 

Resp. Br. 74–75 (conceding that the statute does not 

21-1334_11042021.mp3 (counsel for SeAH acknowledging 

that Stupp “resolves” this issue, and counsel for the United 

States acknowledging that Stupp “governs” and requesting 

remand on this issue). 

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indicate how Commerce should treat separately-invoiced 

freight charges). Commerce has selected a methodology 

consistent with the statutory language, which we afford 

greater deference than under the Chevron framework. Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1039 (Fed. 

Cir. 1996).

SeAH argues Commerce’s methodology is unreasonable because it treats profits and losses on shipping differently, reducing export price when the exporter incurs a loss 

on shipping but not increasing export price when the exporter achieves a profit. SeAH Resp. Br. 75–76. This result 

is perhaps counterintuitive, but SeAH gives no explanation 

of why it is unreasonable.

Commerce is not required to show that its chosen methodology is superior to all others. Still, the freight revenue 

cap has advantages over other possible methodologies.

Compared to simply removing the freight revenue cap, 

Commerce’s interpretation ensures that the freight adjustment is only a downward adjustment, as the statute contemplates. 19 U.S.C. § 1677a(c)(2); Dongguan, 36 Ct. Int’l 

Trade at 894 (“The plain language of § 1677a(c)(2) deals exclusively with downward adjustments to U.S. price.”). 

SeAH contends that it would be reasonable to deduct 

freight cost from the combined price for the merchandise 

and freight, regardless of whether the invoiced freight revenue was greater than the freight cost. SeAH Resp. Br. 75. 

But compared to this proposed method, Commerce’s 

method “prevents an exporter from improperly inflating its 

export price or [constructed export price] of a good by 

charging a customer more for freight than the exporter’s 

actual freight expenses.” Final Results Memo at 87. And

Commerce’s methodology allows “a proper ‘apples-to-apples’ comparison” between export price and normal value 

by excluding “profit earned from the sale of a service 

(freight) as opposed to profit earned from the sales of 

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20 NEXTEEL CO., LTD. v. US

subject merchandise.” United States Resp. Br. 23 (quoting 

Dongguan, 36 Ct. Int’l Trade at 895).

SeAH also advocates disregarding separately-invoiced 

freight altogether and considering only the amount invoiced for the product with no freight adjustment. SeAH 

Resp. Br. 75. But if separately-invoiced freight were disregarded altogether, an exporter could improperly inflate its

export prices by charging more for the merchandise and 

less for shipping. Such methodology could be inconsistent 

with the statutory language if the price for the merchandise were inflated in this way. The price charged for the 

merchandise might include an “amount . . . attributable to 

[freight expense],” which the agency would have to deduct 

under 19 U.S.C. § 1677a(c)(2)(A).

Commerce’s freight revenue cap methodology is reasonable. We thus affirm the Court of International Trade’s 

decision upholding Commerce’s methodology. 

VI. Profit Cap

When normal value is based on constructed value, constructed value includes the actual profit earned by the exporter on its sales of the subject merchandise in the 

relevant comparison market. 19 U.S.C. § 1677b(e)(2)(A). 

When that information is unavailable, § 1677b(e)(2)(B) 

provides that Commerce may calculate profit based on 

(i) the exporter’s profit on the same general category of 

products in the comparison market, (ii) the average profits 

earned by other exporters of the subject merchandise in the 

relevant comparison market, or

(iii) . . . any other reasonable method, except that 

the amount allowed for profit may not exceed the 

amount normally realized by exporters or producers (other than the exporter or producer described 

in clause (i)) in connection with the sale, for consumption in the foreign country, of merchandise 

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that is in the same general category of products as 

the subject merchandise. 

Here, after justifying its departure from the other three 

methods, Commerce relied on “any other reasonable 

method” pursuant to § 1677b(e)(2)(B)(iii). Final Results

Memo at 53–54. The agency calculated profit based on 

SeAH’s Canadian sales of OCTG. Id. at 55. Turning to the 

profit cap, Commerce found that it could not directly calculate the profit cap described in § 1677b(e)(2)(B)(iii) because 

“[t]here is no profit information for sales in Korea of OCTG 

and products in the same general category on the record.”

Final Results Memo at 60. Commerce ultimately relied 

again on SeAH’s Canadian sales as a profit cap based on

“facts available.” Id. Commerce determined that these 

sales were the best choice for a profit cap because they are 

“specific to OCTG and represent[] the production experience of a Korean OCTG producer in Korea.” Id. 

SeAH argues that Commerce’s use of SeAH’s own sales 

to set the profit cap is directly prohibited by the phrase 

“other than the exporter or producer described in clause (i)” 

in § 1677b(e)(2)(B)(iii). SeAH Resp. Br. 79–80.

SeAH misreads the statute. Part (iii) describes the 

quantity Commerce must calculate—the profits normally 

realized by other exporters. The language “other than the 

exporter or producer described in clause (i)” clarifies whose 

profit Commerce must calculate but does not limit the data 

Commerce may rely on to calculate it. As with any other 

quantity, Commerce may rely on facts available pursuant 

to 19 U.S.C. § 1677e(a).

We thus affirm the holding of the Court of International Trade that Commerce’s application of the profit cap 

is lawful.

CONCLUSION

In summary, we agree with the Court of International 

Trade that substantial evidence does not support the 

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22 NEXTEEL CO., LTD. v. US

existence of a particular market situation created by Commerce’s five enumerated circumstances. Because we are 

limited to reviewing Commerce’s reasoning, we do not decide whether a particular market situation could be found 

based on any subset of the factors or other reasoning. Because the Court of International Trade lacks authority to 

reverse Commerce, we vacate the trial court’s opinion to 

the extent it directs Commerce to reach a certain outcome.

We vacate the Court of International Trade’s decision 

upholding Commerce’s differential pricing analysis for the 

reasons stated in our recent decision in Stupp, 5 F.4th 

1341, and remand for proceedings consistent with that decision.

We affirm the Court of International Trade’s decision 

upholding Commerce’s use of a freight revenue cap as a 

reasonable methodology to implement 19 U.S.C. 

§ 1677a(c)(2)(A). 

We affirm the Court of International Trade’s decision 

upholding Commerce’s use of SeAH’s own data to calculate 

a profit cap as consistent with 19 U.S.C. 

§ 1677b(e)(2)(B)(iii). 

AFFIRMED IN PART, VACATED IN PART, AND 

REMANDED

COSTS

No costs.

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