Slip Op. 17-54

UNITED STATES COURT OF INTERNATIONAL TRADE

TMK IPSCO ET AL.,

Plaintiffs and Consolidated Plaintiffs,

and

MAVERICK TUBE CORPORATION ET AL.,

Plaintiff-Intervenors and Consolidated 

Plaintiff-Intervenors,

v.

UNITED STATES,

Defendant,

and

TIANJIN PIPE (GROUP) CORP. AND TIANJIN 

PIPE INTERNATIONAL ECONOMIC & 

TRADING CORP.,

Defendant-Intervenors and 

Consolidated Defendant-Intervenors.

Before: Claire R. Kelly, Judge

Consol. Court No. 10-00055

OPINION

[Sustaining the remand results issued by the U.S. Department of Commerce concerning 

its final determination in the countervailing duty investigation of certain oil country tubular 

goods from the People’s Republic of China.]

Dated: May 3, 2017

Roger Brian Schagrin, Christopher Todd Cloutier, John Winthrop Bohn, Jordan Charles 

Kahn, and Paul Wright Jameson, Schagrin Associates, of Washington, DC, for plaintiffs 

and consolidated plaintiff-intervenors TMK IPSCO, V&M Star L.P., Wheatland Tube 

Corp., Evraz Rocky Mountain Steel, and United Steelworkers.
Consol. Court No. 10-00055 Page 2

Alan Hayden Price and Robert Edward DeFrancesco, III, Wiley Rein, LLP, of Washington, 

DC, for consolidated plaintiff and consolidated plaintiff-intervenor Maverick Tube 

Corporation.

Debbie Leilani Shon, Jon David Corey, Jonathan Gordon Cooper, and Kelsey Marie Rule,

Quinn Emanuel Urquhart & Sullivan, LLP, of Washington, DC, for consolidated plaintiff 

and consolidated plaintiff-intervenor United States Steel Corporation.

Loren Misha Preheim, Assistant Director, U.S. Department of Justice, Civil Division, 

Commercial Litigation Branch, of Washington, DC. for defendant. With him on the brief 

were Chad A. Readler, Acting Assistant Attorney General, Jeanne E. Davidson, Director, 

and Claudia Burke, Assistant Director. Of counsel on the brief was Shelby Mitchell 

Anderson, Attorney, U.S. Department of Commerce, Office of the Chief Counsel for Trade 

Enforcement & Compliance, of Washington, DC.

Daniel Lewis Porter, William Henry Barringer, and Matthew Paul McCullough, Curtis 

Mallet-Prevost, Colt & Mosle LLP, of Washington, DC, for defendant-intervenors and 

consolidated defendant-intervenors.

Kelly, Judge: Before the court for review is the U.S. Department of Commerce’s 

(“Department” or “Commerce”) Final Results of Redetermination Pursuant to Court 

Remand filed pursuant to the court’s decision in TMK IPSCO v. United States, 40 CIT __, 

__, 179 F. Supp. 3d 1328 (2016). See Final Results of Redetermination Pursuant to 

Court Remand, Dec. 21, 2016, ECF No. 171 (“Remand Results”). The court remanded 

Commerce’s final determination in its countervailing duty (“CVD”) investigation of certain 

oil country tubular goods (“OCTG”) from the People’s Republic of China (“China”) to 

explain or reconsider its determinations: (1) to use China’s World Trade Organization 

(“WTO”) accession date as a cut-off for identifying and measuring countervailable 

subsidies; (2) to include two disparate freight rates in Commerce’s benchmark price for 

the benefit conferred by the provision of steel rounds for less than adequate remuneration 

(“LTAR”) as representative of what an importer would pay; (3) to attribute subsidies 

received by Changbao Precision Steel Tube Co., Ltd. (“Precision”) to its parent company 
Consol. Court No. 10-00055 Page 3

Jiangsu Changbao Steel Tube Co., Ltd. (“Changbao”) and to all of Changbao’s other 

subsidiaries; (4) to attribute subsidies received by four subsidiaries of Tianjin Pipe (Group) 

Corp. (“TPCO”) to sales of other subsidiaries of TPCO; (5) that the provision of steel 

rounds and billets at LTAR is tied to sales of seamless steel pipe; and (6) to include the 

Steel Business Briefing (“SBB”) “East Asia” benchmark data for billets in the benchmark 

calculation for the provision of steel rounds and billets. See TMK IPSCO, 40 CIT at __, 

179 F. Supp. 3d at 1335; see generally Certain Oil Country Tubular Goods From the 

People’s Republic of China, 74 Fed. Reg. 64,045 (Dep’t Commerce Dec. 7, 2009) (final 

affirmative countervailing duty determination, final negative critical circumstances 

determination) (“Final Results”) and accompanying Issues and Decision Memorandum 

for the Final Determination in the Countervailing Duty Investigation of Certain Oil Country 

Tubular Goods (“OCTG”) from the People’s Republic of China, PD 318 (Nov. 23, 2009) 

(“Final Decision Memo”).1 Commerce’s Remand Results adequately address the 

concerns raised in the court’s prior decision, and Commerce’s revised results are 

supported by substantial evidence. Therefore, the Remand Results are sustained.

1 On May 12, 2010, Defendant submitted indices to the public and confidential administrative 

records for its final results, which identify the documents that comprise the public and confidential 

administrative records to the Commerce’s final determination. The indices to the public and 

confidential administrative records to Commerce’s final determination can be located at ECF No. 

40. On January 3, 2017, Defendant submitted indices to the public and confidential administrative 

records for its Remand Results, which identify documents that comprise the public and 

confidential administrative records to Commerce’s Remand Results. Those indices can be 

located at ECF Nos. 173-1 and 173-2, respectively. All further references to the documents from 

the administrative records to the final results and the remand results are identified by the numbers 

assigned by Commerce in these administrative records.
Consol. Court No. 10-00055 Page 4

BACKGROUND

The court presumes familiarity with the facts as discussed in TMK IPSCO.

Nevertheless, the court briefly summarizes facts relevant to the discussion here for ease 

of reference. First, in its final determination, Commerce declined to identify and measure

non-recurring subsidies alleged in the petition to have predated China’s accession to the 

WTO on December 11, 2001 because Commerce concluded that it could not identify and 

measure subsidies prior to that date. See Final Decision Memo at 53. The court held

that Commerce did not articulate a relationship between China’s WTO accession date 

and the implementation of reforms that would enable Commerce to identify and measure 

countervailable subsidies. TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1343. 

Therefore, the court held that Commerce failed to countervail all identifiable and 

measurable subsidies, as the statute requires it to do. See id.; see generally Section 

701(f) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1671(f)(1)–(2) (2012).2 The 

court remanded to Commerce to

investigate each subsidy program and allocate subsidies beginning on the 

first date it could identify and measure the subsidy considering the particular 

program in question and the impact of relevant economic reforms on that 

program.

TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1344.

2 Although this countervailing duty investigation was initiated on April 28, 2009, the 2012 version 

of 19 U.S.C. § 1671(f) applies here because the March 13, 2012 amendment to the statute applies 

to all countervailing duty proceedings initiated on or after November 20, 2006 and all civil actions 

relating to such proceedings. See Section 701 of the Tariff Act of 1930, as amended, 19 U.S.C. 

§ 1671 note (2012) (Effective and Applicability Provisions 2012 Acts). All further citations to the 

Tariff Act of 1930, as amended, are to the relevant provisions of Title 19 of the U.S. Code, 2006 

edition unless otherwise indicated. 
Consol. Court No. 10-00055 Page 5

Second, Commerce included ocean freight quotes from both Maersk and an

unaffiliated freight forwarder used by mandatory respondent Zhejiang Jianli Enterprise 

Co., Ltd. (“Jianli”) to generate an average price for ocean freight in calculating its world 

market price benchmark to measure the adequacy of remuneration for steel rounds 

provided to Jianli in its final determination. See Final Decision Memo at 84. The court 

remanded the issue to Commerce to reconsider or further explain its decision to use an 

average of these two freight quotes because Commerce had inadequately explained how 

both quotes could be representative given the significant disparity between them. See

TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1350–51.

Third, Commerce included monthly export pricing data for billets from SBB “East 

Asia” among the data included in its benchmark calculation for determining the adequacy 

of remuneration of the provision of steel rounds and billets in its final determination. See

Final Decision Memo at 77. The court granted Commerce’s request for a remand to allow 

it to reconsider its determination to include the SBB “East Asia” series pricing data in its 

benchmark calculation. See TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1347.

Fourth, Commerce attributed subsidies received by Precision to Changbao,

Precision’s parent company, and to all of Changbao’s other subsidiaries. See Final 

Decision Memo at 8. Commerce likewise attributed or cumulated subsidies received by 

four of TPCO’s subsidiaries to the consolidated sales of TPCO and all of its subsidiaries.

See Final Decision Memo at 9 (citing Certain Oil Country Tubular Goods From the 

People’s Republic of China, 74 Fed. Reg. 47,210, 47,215 (Dep’t Commerce Sept. 15, 

2009) (preliminary affirmative countervailing duty determination, preliminary negative 
Consol. Court No. 10-00055 Page 6

critical circumstances determination) (“Prelim. Results”). The court held that 19 C.F.R. 

§ 351.525(b)(6)(iii) (2009)3 does not give Commerce authority to attribute subsidies 

received by a subsidiary to the consolidated sales of the parent company’s other 

subsidiaries. TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1357. The court remanded 

to Commerce to explain what other authority allows it to attribute subsidies received by 

certain subsidiaries of Changbao and TPCO to the consolidated sales of all subsidiaries 

of each respective company or reconsider its determination. Id., 40 CIT at __, 179 F. 

Supp. 3d at 1358.

Lastly, in its final determination, Commerce attributed the provision of steel rounds 

to TPCO’s consolidated sales of all merchandise, not just to its sales of seamless steel 

pipe products. See Final Decision Memo 128–29. The court held that Commerce’s

attribution decision is not supported by substantial evidence because the court could not 

“discern whether Commerce determined that the provision of steel rounds at LTAR is tied 

to sales of seamless pipe.” TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1359. The 

court remanded Commerce’s determination to determine whether its tying regulation 

applies to TPCO and support its determination with record evidence. See id.

In its remand determination Commerce makes the following determinations. 

Under protest, Commerce no longer adopts China’s WTO accession date as a uniform 

date when subsidy programs were identifiable and measurable in China.4 See Remand 

3 Further references to the Code of Federal Regulations are to the 2009 edition.

4 The Court of Appeals for the Federal Circuit held that Defendant may preserve its standing to 

pursue an appeal even though Defendant may technically be the prevailing party by adopting a

position “under protest”. See Viraj Grp., Ltd. v. United States, 343 F.3d 1371, 1376 (Fed. Cir. 

2003).
Consol. Court No. 10-00055 Page 7

Results 11. Instead, Commerce identified four categories of programs alleged in the 

petition to assess when “a sufficiently developed legal framework relevant” to each

existed such that Commerce could appropriately evaluate whether a subsidy had been 

bestowed. See Remand Results 11, 13–19. Commerce applies the benefit conferred on 

the earliest date when the government bestowal was identifiable or measurable. See id.

at 31–35. Commerce continues to use the ocean freight quotes provided by Maersk and 

by Jianli’s freight forwarder. See id. at 42. Commerce reverses its prior conclusion 

regarding the attribution of subsidies received by TPCO’s and Changbao’s subsidiaries. 

See id. at 38–39. Commerce maintains its determination to attribute steel rounds and 

billets provided at LTAR program to TPCO’s applicable total sales and not solely to sales 

of seamless steel pipe. See id. at 46. Finally, Commerce excludes the SBB East Asia 

pricing data from its benchmark calculation for steel rounds. See id. at 48.

Commerce’s changes in approach resulted in revised subsidy rates for all 

mandatory respondents and for all respondents not individually investigated. See

Remand Results 56. On remand, Commerce assigned mandatory respondents the 

following subsidy rates: (1) Changbao a subsidy rate of 28.70%; (2) Jianli a subsidy rate 

of 30.56%; (3) TPCO a subsidy rate of 21.48%; (4) Wuxi a subsidy rate of 29.48%. Id.

For all other exporters not individually investigated, Commerce assigned a subsidy rate 

of 27.08%.

STANDARD OF REVIEW

The court continues to have jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(i) 

and 28 U.S.C. § 1581(c) (2006), which grant the court authority to review actions 
Consol. Court No. 10-00055 Page 8

contesting the final determination in an investigation of a CVD order. See 19 U.S.C. 

§ 1516a(a)(2)(B)(i); 28 U.S.C. § 1581(c) (2012). “The court shall hold unlawful any 

determination, finding, or conclusion found . . . to be unsupported by substantial evidence 

on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). 

“The results of a redetermination pursuant to court remand are also reviewed ‘for 

compliance with the court’s remand order.’” Xinjiamei Furniture (Zhangzhou) Co. v. 

United States, 38 CIT __, __, 968 F. Supp. 2d 1255, 1259 (2014) (quoting Nakornthai 

Strip Mill Public Co. v. United States, 32 CIT 1272, 1274, 587 F. Supp. 2d 1303, 1306 

(2008)).

DISCUSSION

I. Commerce’s Evaluation of Non-Recurring Subsidy Programs

In TMK IPSCO, the court held that by cutting off its investigation and measurement 

of subsidies on December 11, 2001, the date China acceded to the WTO, Commerce had 

failed to countervail all identifiable and measurable subsidies, as the statute requires it to 

do. See id.; see generally 19 U.S.C. § 1671(f)(1)–(2). The court remanded to Commerce 

to investigate each subsidy program and allocate subsidies beginning on the first date it 

could identify and measure the subsidy considering the particular program in question 

and the impact of relevant economic reforms on that program. TMK IPSCO, 40 CIT at 

__, 179 F. Supp. 3d at 1344. Consolidated Plaintiff, United States Steel Corporation

(“U.S. Steel”), contends that Commerce’s determination on remand to evaluate the 

subsidy programs in the petition by type of program does not comply with the court’s order 

that Commerce investigate “each subsidy program and allocate subsidies beginning on 
Consol. Court No. 10-00055 Page 9

the first date it could identify and measure the subsidy considering the particular program 

in question.” United States Steel Corporation’s Comments Def.’s Final Results of 

Redetermination Pursuant to Remand Order 3–6, Jan. 23, 2017, ECF. No. 174 (“U.S. 

Steel Remand Comments”). Alternatively, U.S. Steel argues even if Commerce’s 

approach of evaluating subsidy programs by type is legally supported, Commerce’s 

conclusions about when credit-oriented subsidy programs and land-oriented subsidy 

programs were first identifiable and measurable are unsupported by substantial evidence. 

U.S. Steel Remand Comments 6–7. Commerce’s evaluation of subsidy programs in this 

investigation is reasonable and consistent with its statutory obligations. Commerce’s

conclusions as to when credit-oriented and land-oriented subsidy programs were first 

identifiable and measurable are also supported by substantial evidence.

Commerce generally must impose countervailing duties on merchandise from a

non-market economy (“NME”) country if Commerce makes the findings necessary to 

countervail a subsidy more generally under the statute. See 19 U.S.C. § 1671(f)(1)

(2012); see also 19 U.S.C. §§ 1677(5)–(5A) (2006) (setting forth the determinations 

Commerce must make before imposing a CVD generally). However, Commerce need

not countervail a subsidy imported from a NME country if Commerce determines it cannot 

identify and measure the subsidy in question “because the economy of that country is 

essentially comprised of a single entity.” See 19 U.S.C. § 1671(f)(2) (2012). Commerce 

has significant discretion in determining whether it can identify and measure subsidies 

provided by the government or a public entity within the NME country because the statute 

is silent as to when Commerce can identify and measure a subsidy. See 19 U.S.C. 
Consol. Court No. 10-00055 Page 10

§ 1671(f)(1)–(2) (2012). Normally, a reviewing court should not disrupt the agency’s 

exercise of discretion in fashioning an approach to a problem delegated to it unless the 

agency has not supplied a reasoned basis for its action. See Motor Vehicle Mfrs. Ass’n 

of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (citations omitted).

Nonetheless, the “agency must cogently explain why it has exercised its discretion in a 

given manner.” Id. at 48 (citations omitted).

On remand Commerce articulated a rational relationship between specific legal 

reforms in China and the effect of such reforms on Commerce’s ability to identify and 

measure subsidies.5 See Remand Results 13–19. Commerce “assessed when a 

sufficiently developed legal framework relevant to th[e] particular type of subsidy existed 

that would enable [it] to identify the sphere of commercial activity involved, the economic 

actors involved and the government action required to bestow that type of subsidy.” Id.

at 11. Commerce identified four types of subsidies alleged in the petition: grants, creditoriented subsidies, tax-related subsidies and land-oriented subsidies. See id. at 11–19. 

Commerce explained that it evaluated each type of non-recurring subsidy to determine 

when China first developed a sufficient “legal framework relevant to that particular type of 

subsidy . . . that would enable [it] to identify the sphere of commercial activity involved, 

the economic actors involved and the government action required to bestow that type of 

subsidy.” Remand Results 11.

5 Commerce only evaluated the countervailability of programs that provided a non-recurring 

benefit as early as 1994 because it only allocates the benefit conferred of a non-recurring subsidy 

program over the average useful life of the assets involved. See 19 C.F.R. § 351.401(a)–(b). The 

average useful life of the assets used in the production of subject merchandise was 15 years.

Remand Results 12.
Consol. Court No. 10-00055 Page 11

Commerce determined that grant programs could first be identified and measured

as of 1994. Id. at 14. Commerce reasoned that the first Company Law took effect in 

1994, which marks a point “where distinct economic actors were legally extended the 

flexibility to engage in commercial activity” for the first time. Id. Commerce concluded 

that credit-oriented subsidies could be identified and measured starting from 1996, which 

Commerce grounded in two economic reforms: the 1995 Commercial Bank Law and the 

1996 General Rules on Loans. Id. at 15–16. Commerce deduced that the former reform 

defined a commercial bank, made commercial banks legally responsible for their own 

profits and losses, and afforded commercial banks legal autonomy from the state in 

certain matters. Id. at 15. Commerce resolved that the General Rules on Loans set out 

legal rights and obligations for lenders and borrowers. Id. at 15–16. Commerce 

concluded that both reforms were necessary to “identify distinct legal economic actors in 

the credit market as well as to examine specific loans and potential forgiveness of such 

loans.” Id. at 16. Commerce determined that “it may have been able to evaluate the 

countervailability of tax-related subsidies” starting from 1994. Id. at 18. Commerce 

supported its decision by highlighting that before the entry into force of a series of tax 

laws, including regulations regarding the value-added tax, consumption taxes, business 

taxes, enterprise income taxes, individual income taxes, and resources, China lacked a

comprehensive legal framework that would be necessary to identify tax payers and 

assess and collect taxes. Id. at 16. Commerce also explained that the adoption of the 

Foreign Trade Law on May 12, 1994 allowed all individuals and legal persons to engage

in foreign trade, which had been restricted to a monopoly of state-trading enterprises 
Consol. Court No. 10-00055 Page 12

managed by a Chinese government ministry before the Foreign Trade Law took effect. 

Remand Results 17. Therefore, Commerce implied that, prior to the adoption of the 

Foreign Trade Law, individual actors could not have taken advantage of certain taxrelated subsidies. See id. Lastly, Commerce discerned that it could identify and measure 

land-oriented subsidies as of 1999. Id. at 19. Commerce resolved that until 1999, the 

year that both the Revised Land Administration Law and its implementing regulations 

came into effect, the Chinese government had not established the legal framework for the 

basic elements of land transactions. See id. Therefore, Commerce has articulated a 

logical relationship between specific types of Chinese reforms and the legal conditions 

necessary to permit Commerce to identify and measure countervailable subsidies for 

individual actors within the Chinese economy.

For programs that Commerce determined were established prior to December 11, 

2001, Commerce next proceeded to consider each specific subsidy program alleged in 

the petition to determine the extent to which any investigated programs may have

provided a benefit prior to December 11, 2001.6 See id. at 19–35. Depending upon the 

6 Commerce did not change its determination with respect to the identification and measurement 

of certain non-recurring subsidy programs that it determined based on record information had

been established after December 11, 2001 because the full benefit conferred by such programs 

had already been assessed and applied in Commerce’s final determination. See Remand Results

20–25.

Specifically, the subsidy programs that Commerce determined were unaffected by its 

application of the December 11, 2001 cut-off date include: (1) Tianjin Binhai New Area; (2) the 

Tianjin Economic and Technological Development Area (Science and Technology Fund); (3) the 

Sub-central Government Programs to Promote Famous Export Brands and China World Top 

Brands; (4) the Jiangsu Province Brands; (5) the Stamp Exemption on Share Transfers Under 

Non-Tradeable Share Reform: (6) the Foreign Trade Development Fund (Northeast Revitalization

(footnote continued)
Consol. Court No. 10-00055 Page 13

extent of the information available on the record, Commerce determined that each

program conferred a benefit either based on facts otherwise available or adverse facts 

available (“AFA”) because neither the Government of China (“GOC”) nor the mandatory 

respondents responded to additional questionnaires issued by Commerce.7 See

Remand Results 25–29. Although Commerce analyzed the programs by creating 

categories, Commerce grouped programs together by category because it concluded that 

the nature of the government bestowals are similar for the individual programs examined 

under each type.8 See id. at 50. Commerce states that “[t]he next step in the process 

Program); (7) the Five Points, One Line Program; (8) the Forgiveness of Tax Arrears For

Enterprises in the Old Industrial of Northeast China; (9) the Debt-to-Equity Swap for Pangang; 

(10) the Bohai Fund’s equity infusion in TPCO; (11) the Exemptions for State Owned Enterprises

from Distributing Dividents to the State; (12) all lending programs offered through government 

entities; and (13) the VAT and Tariff Exemptions for the Purchase of Fixed Assets Under the 

Foreign Trade Development Fund. See id.

7 Although 19 U.S.C. § 1677e(a)–(b) and 19 C.F.R. § 351.308(a)–(c) each separately provide for 

the use of facts otherwise available and the subsequent application of an adverse inference to 

those facts, Commerce uses the shorthand term “adverse facts available” or “AFA” to refer to 

Commerce’s use of such facts otherwise available with an adverse inference. See, e.g., Remand 

Results 27–35.

Commerce requested information regarding the alleged subsidy programs for other 

programs alleged in the petition for which it lacked information to determine whether they had

begun prior to December 11, 2001 by sending questionnaires to the Government of China 

(“GOC”) and to the mandatory respondents. See id. at 4 (citing Letter Pertaining to GOC 

Questionnaire, Rem. PD 2, bar code 3490597-01 (July 25, 2016); Letter Pertaining to Jianli 

Questionnaire, Rem PD 3, bar code 3490598-01 (July 25, 2016); Letter Pertaining to TPCO 

Questionnaire, Rem. PD 4, bar code 3490600-01 (July 25, 2016); Letter Pertaining to Wuxi 

Questionnaire, Rem. PD 5, bar code 3490602-01 (July 25, 2016)). Commerce states that it 

received no responses to its request for information. Remand Results 19 (citing Memorandum 

Pertaining to Changbao, Jianli, TPCO, Wuxi Status of Respondent Representation, Rem. PD 7, 

bar code 3591043-01 (July 27, 2016)). As a result, Commerce based its CVD rates for these 

programs on AFA in its Remand Results.

8 For example, Commerce first determined identifying and measuring grants does not require a 

“specific legal framework guiding government action,” but does require that Commerce can 

“identify distinct economic actors.” Remand Results 13. Commerce then identified that the entry 

into force of the first Company Law in 1994, which recognized the legal standing of privatized

(footnote continued)
Consol. Court No. 10-00055 Page 14

would have been to evaluate the countervailability of each program from the starting point 

or year established for a particular category.” Id. at 50. It is reasonably discernible that 

Commerce categorized the investigated programs by type in order to efficiently allocate 

its resources. See id.

Lacking information on the record for certain subsidy programs alleged in the 

petition, Commerce applied an adverse inference that they were in effect prior to 

December 11, 2001 and that the respondents benefited from the program.9 Remand 

Results 31. Commerce used its standard AFA rate selection methodology to apply an 

AFA rate for these individual programs.10 Id. at 31–35. For the State Key Technology 

firms and “setting forth principles of business autonomy, responsibility for profits and losses, and

right to own assets,” represents the threshold where China transitioned “to a phase of economic 

development where distinct economic actors were legally extended the flexibility to engage in 

commercial activity.” See id. at 14–15. Therefore, it is reasonably discernible that Commerce 

concludes that identifying and measuring all grants requires it to identify benefits to distinct 

economic actors and match such benefits to individual economic actors. See id.

9 Specifically, Commerce applied an adverse inference that the following individual non-recurring 

subsidy programs were countervailable from the time the category of bestowal was first 

identifiable and measurable: (1) Export Assistance Grants, Program to Rebate Antidumping Fees, 

and Grants to Loss-Making SOEs; and (2) Provision of Land and/or Land Use Rights for SOEs 

for LTAR. See Remand Results 31–32; 34–35.

10 For purposes of calculating the AFA rate, Commerce found all alleged programs for which it 

requested a questionnaire response countervailable because respondents withheld requested 

information and significantly impeded the proceeding. See Remand Results 28. Because the 

GOC and the mandatory respondents failed to participate, Commerce applied the following 

hierarchy to select appropriate subsidy rates for the subsidy programs for which it applied AFA:

(a) [Commerce] first applied, where available, the highest above de minimis

subsidy rate calculated for an identical program from any segment of this 

proceeding; (b) absent such a rate, [Commerce] applied, where available, the 

highest above de minimis subsidy rate calculated for a similar program for any 

segment of this proceeding; (c) absent an above de minimis subsidy rate 

calculated for the same or similar program in any segment of proceeding, 

[Commerce] applied the highest above de minimis calculated subsidy rate for

identical, or if not available, a similar program from any CVD proceeding 

involving the country in which the subject merchandise is produced (i.e.,

(footnote continued)
Consol. Court No. 10-00055 Page 15

Project Fund grant program, Commerce found it had adequate record information to 

determine that the program was established on September 10, 1999. Remand Results

32. Lacking any information on the usage of the program by individual mandatory 

respondents prior to December 11, 2001, Commerce inferred that the program conferred 

a benefit on all mandatory respondents for the years 1999–2001 and applied an AFA rate 

of 0.58 percent, the highest above de minimis rate calculated from any similar program in 

any CVD proceeding involving China, to mandatory respondents Changbao Jianli, and 

Wuxi Seamless Oil Pipe Co., Ltd. (“Wuxi”). Id. at 33. For mandatory respondent TPCO, 

although Commerce had information on the company’s use of this program from 

December 11, 2001 through the end of 2008, Commerce states it lacked information on 

TPCO’s use of the program from 1999 through December 11, 2001. Id. To fill in the 

missing information, Commerce added an AFA rate of 0.03 percent to the calculated rate 

from its final determination of 0.01 (i.e., a combined rate of 0.04 percent) to reflect the 

inferred benefit received during the years TPCO had not provided a response. Id.

Commerce found that most of the preferences provided by the exemption of customs 

duties for the importation of instruments and equipment in the High-Tech Industrial 

Development Zones program were already properly allocated in its final determination

[China]), provided the producer of the subject merchandise or the industry to 

which it belongs could have used the program for which the rates were 

calculated. Absent an above de minimis rate for the same or similar program 

from any CVD proceeding involving [China], [Commerce] applied the highest 

calculated rate from any program in any CVD proceeding for [China].

Id. at 28–29.
Consol. Court No. 10-00055 Page 16

because they represented recurring benefits allocated in the year received.11 Remand 

Results 33. Nonetheless, Commerce applied an AFA rate of 9.71 percent to this program

to reflect the exemption of customs duties for the importation of instruments and 

equipment aspect of the program, which Commerce found is a non-recurring benefit. Id.

at 33–34.

U.S. Steel argues that the cut-off dates adopted by Commerce for each type of 

program are as arbitrary as Commerce’s use of China’s accession to the WTO in its final 

determination. See U.S. Steel Remand Comments 4–5. The court labeled Commerce’s 

selection of China’s WTO accession date as arbitrary because Commerce failed to 

identify specific economic reforms that occurred on China’s accession date and match 

those reforms to conditions it deemed necessary to identify and measure subsidies. TMK 

IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1343. Here, the dates adopted for each type of 

subsidy program tie specific reforms to Commerce’s ability to identify the sphere of 

commercial activity involved, the economic actors involved, and the government action 

required to bestow the type of subsidy. See Remand Results 13–19. Therefore, 

Commerce identifies the dates that specific reforms are implemented and connects those

reforms to the presence of legal conditions it reasonably deemed necessary to identifying 

and measuring a particular type of bestowal. U.S. Steel points to no reason or instance 

where one program of a particular type would be identifiable and measurable before 

11 For recurring benefits, Commerce allocates those benefits or expenses to the year in which 

the benefit is received. 19 C.F.R. § 351.524(a). In other words, only recurring benefits bestowed

during the POI could possibly be countervailable. See id. Therefore, recurring programs were 

unaffected by Commerce’s determination to apply a cut-off date for identifying and measuring 

non-recurring subsidies.
Consol. Court No. 10-00055 Page 17

another program of the same type. Therefore, Commerce’s determination to establish 

categories of programs and determine when each type of program would first be 

countervailable and measurable is reasonable and consistent with the statutory 

obligations to countervail all identifiable and measurable subsidies in a NME country.

U.S. Steel also argues that Commerce’s adoption of a uniform cut-off date for each 

type of subsidy is arbitrary because it is inconsistent with Commerce’s conclusion that the 

process of economic reform is uneven and may take hold in some sectors before others. 

U.S. Steel Comments 4. But the court faulted Commerce’s adoption of the December 11, 

2001 cut-off date as arbitrary because Commerce failed to identify reforms that occurred 

on December 11, 2001 or explain how any such reforms permitted it to identify and 

measure subsidies. See TMK IPSCO, 40 CIT __, 179 F. Supp. 3d at 1343. Even if 

reforms identified are uneven and take hold in different sectors of the economy or areas 

of the country before others, as U.S. Steel contends, Commerce’s investigation of types 

of programs focused on the most basic legal conditions that would be necessary to 

identify a specific type of subsidy program. See Remand Results 13–19. Commerce 

cannot, for example, identify and measure the benefit provided by a specific loan to a

specific party before it is possible to identify a loan as a legal, binding contract between 

distinct parties generally. Based on Commerce’s logic, it is possible that a specific 

program could be identifiable and measurable later than the category of program to which

it belongs, but not earlier. Commerce has articulated a logical relationship between 

specific types of reforms and the legal conditions necessary to permit Commerce to 

identify and measure countervailable subsidies for individual actors within the Chinese 
Consol. Court No. 10-00055 Page 18

economy. See Remand Results 13–19. Therefore, in this investigation Commerce’s 

adoption of a uniform cut-off date for each category of subsidy program is reasonable.

In the alternative, U.S. Steel argues that, even if Commerce’s practice of 

examining subsidy programs by type is reasonable, the specific cut-off dates adopted for 

land-oriented subsidies and credit-oriented subsidies are not supported by substantial 

evidence.12 U.S. Steel Remand Comments 6–7. For credit-oriented subsidies, U.S. Steel 

“disagrees with Commerce’s conclusion that the earliest it could evaluate the 

countervailability of credit-oriented subsidies is 1996.” Id. at 6 (citing Remand Results

16). U.S. Steel focuses on Commerce’s acknowledgment that specific economic actors 

involved in providing credit in China could be identified as of 1993, and U.S. Steel 

contends this evidence renders Commerce’s conclusion that credit-oriented subsidies 

could not be identified and measured until 1996 unsupported by substantial evidence. Id.

at 7. Commerce notes that before a credit-oriented subsidy can be considered 

countervailable in an NME, Commerce “needs to be able to identify the loan as a legal, 

binding contract between distinct parties.” Remand Results 15. Although Commerce 

says that it could identify specific actors involved in the provision of credit as early as 

1993, it is reasonably discernible that Commerce determined the banking sector reforms 

leading up to 1993 did not permit the identification of a binding contract between distinct 

parties. See id. Commerce notes that, until the passage of the 1995 Commercial Bank 

Law, commercial banks were not responsible for their own profits and losses, and banks 

12 The court considers any substantial evidence challenges to Commerce’s determinations of 

when it could identify and measure other alleged subsidy programs waived because U.S. Steel 

challenges the specific cut-off dates selected for only land-oriented subsidies and credit-oriented 

subsidies. See U.S. Steel Remand Comments 6–7.
Consol. Court No. 10-00055 Page 19

lacked legal autonomy from the state. See id. In addition, Commerce states that the 

General Rules on Loans, enacted in 1996, regulated activities related to loans and 

protected the lawful rights and interests of all parties. Id. at 15–16. In particular, 

Commerce credited the 1996 General Rules on Loans as setting the legal rights and 

obligations for both lenders and borrowers as providing the legal basis for defining the 

legal terms of a given loan. Id. at 16. Commerce reasonably determined that both the 

identification of distinct legal actors and the legal underpinnings required to render a loan 

legally binding are necessary to identifying and measuring credit-oriented subsidies. See

id. at 15–16. U.S. Steel offers no evidence that the legal requirements to render a loan 

legally binding between independent economic actors occurred earlier than 1996. The 

court declines to reweigh the evidence.

Likewise, for land-oriented subsidies, U.S. Steel argues that Commerce’s own 

analysis indicates that it can identify and measure these subsidies from 1986 when the 

Land Administration Law first “allowed for the ownership of land-use rights and, in certain 

circumstances, their transfer.” U.S. Steel Remand Comments 7 (citing Remand Results

18). U.S. Steel contends, that, although subsequent reforms may have provided 

additional incentive, it is unreasonable for Commerce to conclude that those reforms were 

necessary to first identify and measure such subsidies. Id. Commerce justified its 

assessment that the conditions were insufficient to allow for the identification and 

measurement of land-oriented subsidies in 1986 by highlighting: (1) the fact that the Land 

Administration law of 1986 conflicted with China’s constitution, which banned selling, 

leasing, and transferring land; and (2) that land-use rights were vague and ill-defined until
Consol. Court No. 10-00055 Page 20

the legal framework for basic elements of land transactions took effect in 1999. Remand 

Results 18–19. The court defers to Commerce’s reasonable determination that the legal 

framework for the basic elements of property transactions is necessary for identifying and 

measuring subsidies. U.S. Steel highlights no record evidence indicating that the 

necessary legal conditions were in place prior to 1999.

II. Continued Inclusion of the Ocean Freight Quote from Jianli’s Freight 

Forwarder

The court remanded to Commerce to reconsider or further explain its decision to 

use an average of two freight quotes from Maersk and Jianli’s freight-forwarder because 

Commerce had not adequately explained how two such disparate quotes could be 

representative of freight prices available to respondents. See TMK IPSCO, 40 CIT at __, 

179 F. Supp. 3d at 1350–51. U.S. Steel continues to challenge Commerce’s explanation. 

See U.S. Steel Remand Comments 10–12. Commerce has now adequately explained 

how both quotes could be reflective of market rates and, as a result, its determination is 

supported by substantial evidence.

If Commerce determines that the government of a country or any public entity is 

providing, directly or indirectly, a countervailable subsidy, then Commerce shall impose a 

duty equal to the amount of the benefit conferred by the subsidy subject to certain 

adjustments. See 19 U.S.C. §§ 1671(a),1677(6). Where a good or service is provided

to a recipient by a government or state-owned entity, if such goods are provided for less 

than adequate remuneration, a benefit shall normally be treated as conferred. See 19 

U.S.C. § 1677(5)(E)(iv). Commerce generally seeks to measure the adequacy of 

remuneration by comparing the government price to a market-determined price for the 
Consol. Court No. 10-00055 Page 21

good from actual transactions in the country in question (i.e., a tier i benchmark). 19 

C.F.R. § 351.511(a)(2)(i). However, if there is no useable market-determined price with 

which to make the comparison, Commerce will measure the adequacy of remuneration 

by comparing the government price to a world market price “where it is reasonable to 

conclude that such price would be available to purchasers in the country in question” (i.e.,

a tier ii benchmark). 19 C.F.R. § 351.511(a)(2)(ii). Further, when measuring the 

adequacy of remuneration, Commerce must adjust the benchmark price to reflect the 

price that a firm actually paid or would pay if it imported the product, including delivery 

charges. 19 C.F.R. § 351.511(a)(2)(iv). Commerce has broad discretion to determine 

how to adjust the world market benchmark price to reflect delivery charges, such as freight 

charges that may be incurred by purchasers so long as such adjustments are reasonable.

On remand, Commerce continued to find that the ocean freight quotes provided by 

Maersk and by Jianli’s freight forwarder are both reflective of market rates that the 

importer would have paid to import steel rounds and billets notwithstanding the pricing 

disparity. Remand Results 42. Commerce explained that the pricing disparity results 

from the avenue the importer chooses to import the products, but both paths reflect 

market rates for ocean freight and are representative of the rates an importer would have 

paid. See id. at 43. Commerce reasoned that working directly with a shipping company 

may result in a different freight cost than contracting with a freight forwarder that works 

with a shipping company. Id. Commerce supports its conclusion that both the Maersk 

rate and that of Jianli’s freight forwarder are representative of market rates by relying

upon a statement from Jianli’s freight forwarder explaining that “most shipping companies 
Consol. Court No. 10-00055 Page 22

and freight forwarders that work with them arrange for the shipment of goods from China 

to the destinations identified . . . and then offer lower rates on the China-bound leg of their 

voyage.” Id. at 42 (citing Jianli Group Submission of Factual Information at Attach. 1, CD 

87 (Oct. 5, 2009) (“Jianli Freight Quote”)). Moreover, Commerce concluded that this 

“deadfreight rate” is negotiated between the freight forwarder and the shipping company 

because the service contracts submitted by Jianli reflect the practice of offering lower 

rates on the China-bound leg.13 Id. at 43. Commerce found that record evidence 

demonstrates that the prices provided to Jianli by its freight forwarder are actual shipping 

charges paid by the freight forwarder’s customers, and not solely by Jianli, during the 

calendar year 2008, see id. at 54, which coincides with the period of investigation (“POI”).

See id. at 3. Therefore, Commerce’s determination that Jianli’s freight forwarder’s freight 

pricing reflects market rates that an importer would have paid is supported by substantial 

evidence.

U.S. Steel implies that it is unreasonable to conclude that two freight options

available in the marketplace could be so disparate because no importer would choose 

the higher-priced route in such an environment. See U.S. Steel Remand Comments 11.

It is reasonably discernible that Commerce concluded both the Maersk price quote data 

and that of Jianli’s freight forwarder are market prices available to importers of steel billets 

because no evidence indicates these rates were not available to importers other than 

Jianli and market-driven reasons other than price could motivate some importers to 

13 Commerce specifically notes that the contracts between Jianli and its freight forwarder include 

the line item “3.) DEADFREIGHT APPLIES IF FINAL CGO QTTY IS LESS THAN OR CGO 

DIMENSION IS DIFFERENT FROM DESCRIBED IN PARA2.)” Remand Results 42 (citing Jianli 

Freight Quote at Attach. 1).
Consol. Court No. 10-00055 Page 23

contract with a freight provider directly rather than through a freight forwarder for a 

“deadfreight” rate. See Remand Results 43. U.S. Steel offers no evidence importers 

always prefer a “deadfreight” rate that represents the lowest aggregate price at the 

expense of any other considerations driven by the needs of their business or of their 

customers. The court declines to speculate why an importer may have selected a 

shipping path that may result in a higher aggregate rate or to reweigh the evidence. The 

existence of market-driven reasons to prefer either option renders Commerce’s

determination that both freight rates are market rates supported by substantial evidence.

U.S. Steel also questions the reliability of the rate of Jianli’s freight forwarder, 

implying that it “is not normal market price, but rather a sweetheart deal.” U.S. Steel 

Remand Comments 11. However, Commerce references the affidavit provided by Jianli’s

freight forwarder, which indicates that the prices provided are actual shipping charges 

paid by the freight forwarder’s customers from multiple countries to Shanghai throughout 

the PO. Remand Results 54 (citing Jianli Freight Quote at 2–3, Attach. 1). U.S. Steel 

provides no record evidence supporting its speculation that the prices reflect a special 

deal not available to other importers. In fact, Defendant points out that Jianli’s pricing 

data, which is relied upon by Commerce, reflects a series of transactions from more than 

one customer throughout the POI. See Def.’s Resp. United States Steel Corporation’s 

Comments Remand Redetermination 14, Mar. 7, 2017, ECF No. 182.

III. Exclusion of SBB East Asia Pricing Data From Tier ii Benchmark

The court remanded Commerce’s determination to include the SBB East Asia 

pricing from its tier ii benchmark price for steel rounds and billets because Commerce’s 

inclusion of this pricing data in its benchmark calculation is not supported by substantial 
Consol. Court No. 10-00055 Page 24

evidence. See TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1347. On remand, 

Commerce determined that the SBB East Asia pricing data should be excluded from its 

tier ii benchmark pricing for steel rounds. Remand Results 48. 

As already discussed, if there is no useable market-determined price with which to 

make the comparison, Commerce will measure the adequacy of remuneration by 

comparing the government price to a world market price “where it is reasonable to 

conclude that such price would be available to purchasers in the country in question” (i.e.,

a tier ii benchmark).14 19 C.F.R. § 351.511(a)(2)(ii). Here, Commerce concludes that the 

fact that the SBB East Asia pricing data could include Chinese import prices presents “a 

more compelling rationale for removing the data source from [its] benchmark.” Remand 

Results 48. To support its determination to move from a tier i benchmark, based on actual 

transactions in China, to a tier ii benchmark, based on world market prices, Commerce 

relies on the potential that Chinese prices for steel rounds and billets could distort the 

SBB East Asia data. See id. Commerce reasonably concluded that it could not reconcile 

including distorted prices in a world market price benchmark. See id. No party challenges 

the exclusion of the SBB East Asia pricing data from Commerce’s tier ii benchmark for 

steel billets and rounds. Commerce has complied with the court’s remand order.

IV. Subsidy Attribution

The court held that Commerce did not explain what authority allowed it to attribute 

steel rounds and billets received by one subsidiary of TPCO or Changbao for LTAR to 

14 Commerce generally seeks to measure the adequacy of remuneration by comparing the 

government price to a market-determined price for the good from actual transactions in the 

country in question (i.e., a tier i benchmark). 19 C.F.R. § 351.511(a)(2)(i).
Consol. Court No. 10-00055 Page 25

the consolidated sales of all of each respective parent company’s subsidiaries in its final 

determination. TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1357–58. The court 

remanded to Commerce to explain its attribution methodology or reconsider its 

determination. Id., 40 CIT at __, 179 F. Supp. 3d at 1358. On remand, Commerce

reconsidered its determination and agreed it should not have attributed subsidies 

received by certain TPCO and Changbao subsidiaries to all of each company’s respective 

subsidiaries. See id. at 38. In its Remand Results, Commerce attributed subsidies 

received by Precision to the combined unconsolidated sales of Changbao and to 

Precision’s sales under 19 C.F.R. § 351.525(b)(6)(ii). Id. Commerce likewise revisited 

its attribution of subsidies for the TPCO entities, and declined to attribute subsidies 

received by TPCO’s subsidiaries Tianguan Yuantong Pipe Product Co., Ltd. (“TPCO 

Yuantong”), Tianjin Pipe Iron Manufacturing Co., Ltd. (“TPCO Iron”), Tianjin Pipe 

International Economic and Trading Co., Ltd. (“TPCO IETC”), and TPCO Charging 

Development Co., Ltd. (“TPCO Charging”) to all of TPCO’s subsidiaries. See Remand 

Results 38–39. Commerce’s determinations on remand comply with the court’s remand 

order.

In general, Commerce “calculate[s] an ad valorem subsidy rate by dividing the 

amount of the benefit allocated to the period of investigation . . . by the sales value during 

the same period of the product or products to which [Commerce] attributes the subsidy.” 

19 C.F.R. § 351.525(a). Ordinarily, Commerce divides the subsidies received by a 

company only by the sales of that company. See 19 C.F.R. § 351.525(b)(6)(i). However, 

if two or more corporations are cross-owned, Commerce’s regulations provide a number 
Consol. Court No. 10-00055 Page 26

of exceptions to its default attribution rule.15 See 19 C.F.R. § 351.525(b)(6)(ii)–(v). If two 

cross-owned corporations produce the same subject merchandise, Commerce will 

attribute subsidies received by either or both corporations to the products produced by 

both corporations. 19 C.F.R. § 351.525(b)(6)(ii). If the firm that received a subsidy is a 

holding company, including a parent company with its own operations, Commerce will 

attribute the subsidy to the consolidated sales of the holding company and its 

subsidiaries. 19 C.F.R. § 351.525(b)(6)(iii). If an input supplier and a downstream 

producer are cross-owned, and production of the input product is primarily dedicated to 

production of the downstream product, Commerce will attribute subsidies received by the 

input producer to the combined sales of the input and downstream products produced by 

both corporations (excluding sales between the two corporations). 19 C.F.R. 

§ 351.525(b)(6)(iv). Where the other attribution exceptions do not apply, “if a corporation 

producing non-subject merchandise received a subsidy and transferred the subsidy to a 

corporation with cross-ownership, [Commerce] will attributed the subsidy to products sold 

by the recipient of the transferred subsidy.” 19 C.F.R. § 351.525(b)(6)(v). Commerce

also cumulates subsidies provided to a trading company exporting subject merchandise

with benefits from subsidies provided to a firm producing subject merchandise that is sold 

through a trading company regardless of whether those firms are affiliated. 19 C.F.R. 

§ 351.525(c).

15 Commerce’s regulations define cross ownership as “exist[ing] between two or more 

corporations where one corporation can use or direct the individual assets of the other 

corporation(s) in essentially the same ways it can use its own assets.” 19 C.F.R. § 351.525(6)(vi).
Consol. Court No. 10-00055 Page 27

Here, Commerce attributed subsidies received by Precision to the combined 

unconsolidated sales of Changbao and to sales of Precision under 19 C.F.R. 

§ 351.525(b)(6)(ii) because it found that both corporations are cross-owned and produce 

subject merchandise. See Remand Results 38; see also Final Decision Memo at 7–8

(citing Prelim Results, 74 Fed. Reg. at 47,214 (stating that Changbao and Precision are 

cross-owned and that Precision is a producer of subject merchandise just like Changbao, 

a mandatory respondent in this investigation). Commerce applied the same attribution 

rule to attribute subsidies received by TPCO Yuantong to TPCO because it found that 

TPCO and its cross-owned subsidiary, TPCO Yuantong, both produced subject 

merchandise. Remand Results 38. In addition, Commerce included service sales in 

TPCO Yuantong’s sales value of subject merchandise because Commerce credited

TPCO Yuantong’s description of the sales as related to “heat treatment processing.” Id.

at 38–39 (citing TPCO Verification Report at 13, PD 271 (Oct. 29, 2009)). Commerce 

supported its determination to attribute the steel rounds and billets provided to TPCO Iron

under 19 C.F.R § 351.525(b)(6)(iv) to the combined sales of TPCO Iron, TPCO Yuantong, 

and TPCO, less intercompany sales, by noting that all three companies are cross-owned 

and TPCO Iron was identified in the investigation as a producer of inputs primarily 

dedicated to producing downstream products produced by TPCO and TPCO Yuantong.

Id. at 39. Commerce supported its determination to attribute the steel rounds provided at 

LTAR to TPCO Charging to the unconsolidated sales of TPCO by noting that TPCO 

Charging does not meet any attribution method under 19 C.F.R. §§ 351.525(b)(6)(ii)–(iv) 

and that TPCO Charging, which does not produce subject merchandise, provided steel 
Consol. Court No. 10-00055 Page 28

rounds to TPCO. Id.; see also Prelim. Results, 74 Fed. Reg. at 47, 215 (stating that 

TPCO stated that Charging acts as a trading company and does not produce any 

merchandise). Lastly, Commerce cumulated steel rounds and billets provided for LTAR 

to TPCO IETC, which was identified as a trading company, with those received by TPCO 

as well benefits received by TPCO’s other subsidiaries TPCO Yuantong, and TPCO 

Charging. Id. at 39–40. Therefore, Commerce used TPCO IETC’s total unconsolidated 

sales value without removing inter-company sales. Id. at 39–40.

No party challenges Commerce’s attribution methodology. Commerce has 

explained its attribution methodology and supports its attribution methodology by referring 

to uncontroverted record evidence. Therefore, Commerce has complied with the court’s 

order.

V. Provision of Steel Rounds Tied to Production of Subject Merchandise

The court remanded Commerce’s decision to attribute the benefit received by 

TPCO from the provision of steel rounds at LTAR because the court could not “discern 

whether Commerce determined that the provision of steel rounds at LTAR is tied to sales 

of seamless pipe.” TMK IPSCO, 40 CIT at __, 179 F. Supp. 3d at 1359. On remand, 

Commerce finds no record evidence as to the purpose or intended use of the steel rounds 

and billets under the subsidy program. See Remand Results 46. Therefore, Commerce

again attributes the subsidies at issue to TPCO’s applicable total sales, not just sales of 

seamless pipe. See id. U.S. Steel continues to challenge that substantial evidence 

supports Commerce’s determination. U.S. Steel Remand Comments 8–10. The court 

disagrees with U.S. Steel.
Consol. Court No. 10-00055 Page 29

Commerce attributes the benefits of subsidies to all products exported by a firm. 

19 C.F.R. § 351.525(b)(3). However, if a firm produces more than one product, 

Commerce will attribute the subsidy only to sales of a particular product if the subsidy is 

tied to the production or sale of only that product. See 19 C.F.R. § 351.525(b)(5). If 

Commerce cannot determine that the subsidy is tied to the production or sale of a 

particular product, then Commerce follows its default rule of attributing subsidies to all

products exported by the firm. See 19 C.F.R. §§ 351.525(b)(3), (b)(5). Commerce has 

discretion in determining how to evaluate whether a subsidy is tied to the production or 

sale of a particular product because neither the statute nor Commerce’s regulation 

defines when a subsidy is tied to the production or sale of a particular product. See 19

U.S.C. § 1677(5)(E)(iv); 19 C.F.R. §§ 351.525(b)(2), (b)(5). As a matter of practice 

Commerce evaluates the purpose of the subsidy based on information available at the 

time of bestowal and does not trace how the subsidy is actually used by companies. See

id. at 45 (citing Large Residential Washers From the Republic of Korea, 77 Fed. Reg. 

75,975 (Dep’t Commerce Dec. 26, 2012) (final affirmative CVD determination); and 

accompanying Issues and Decision Memorandum for the Final Determination in the 

Countervailing Duty Investigation of Large Residential Washers from the Republic of 

Korea at 41, C-580-869, (Dec. 18, 2012), available at

http://ia.ita.doc.gov/frn/summary/korea-south/2012-31078-1.pdf (last visited Apr. 28,

2017) (“Large Residential Washers from Korea I&D”)).

Here, Commerce attributed the provision of steel rounds and billets at LTAR to all 

sales of TPCO rather than to only sales of seamless pipe tubes because record evidence 
Consol. Court No. 10-00055 Page 30

does not establish that the GOC intended the subsidy to benefit or knew that the subsidy 

would benefit the production of seamless pipe and tube at the time of bestowal. Remand 

Results 46. Commerce evaluated the subsidy based upon information at the time of 

bestowal and there were no documents or statements from the GOC or from state-owned 

producers and suppliers on the purpose or intended use of steel rounds and billets under 

the program. Id. at 46. U.S. Steel points to no evidence demonstrating that the GOC 

intended the subsidy to benefit or knew that the subsidy would benefit the production of 

seamless pipe and tube at the time of bestowal.

U.S. Steel contends that the GOC’s statement in its response to Commerce’s

request for a list of industries in China that directly purchase steel rounds that “[s]teel

rounds (billets in round shape that can be used to produce OCTG) are [purchased] by the 

OCTG industry,” renders Commerce’s conclusion unreasonable. U.S. Steel Remand 

Comments 9 (citing Response of the Government of the People’s Republic of China to 

the Department’s Initial Questionnaire at 49, PD 107 (July 20, 2009)). However, 

Commerce reasoned that “the mere fact that a good ‘can be used’ does not demonstrate 

that the provision of that good is tied to a particular product within the meaning of 19 

C.F.R. § 351.525(b)(5).” Remand Results 53. In its final determination, Commerce noted 

that the GOC states that steel billet was used “in a number of industries, including rebar, 

plain bar, merchant bar, light sections, narrow strip, wire rod, and seamless tubes.” Final 

Decision Memo at 75. Moreover, Commerce states that its practice is to only “find that a 

subsidy is tied to a particular product when the intended use is known to the subsidy giver 

(in this case the GOC) and so acknowledged prior to [or] concurrent with the bestowal of 
Consol. Court No. 10-00055 Page 31

the subsidy.” Remand Results 46 (citing Countervailing Duties, 63 Fed. Reg. 65,348, 

65,403 (Dep’t Commerce Nov. 25, 1998) (final rule) (explaining that Commerce looks at 

information available at the time of bestowal to analyze the purpose of the subsidy)). The 

POI for Commerce’s investigation of OCTG from China is January 1, 2008 through 

December 31, 2008. See id. at 3. It is therefore reasonably discernible that Commerce

concluded that that the GOC’s questionnaire response is not an acknowledgment that the 

purpose of the subsidy is to benefit producers of OCTG prior to or concurrent with the 

bestowal of the subsidy because the statement was made in response to Commerce’s 

questionnaire issued in 2009. See id. (citing Countervailing Duties, 63 Fed. Reg. at

65,403).

U.S. Steel also argues that Commerce’s statement that the GOC has a policy of 

“supporting and promoting the production of innovative and high-value added products, 

including OCTG” contradicts Commerce’s tying determination. U.S. Steel Remand 

Comments 9 (citing Prelim. Results, 74 Fed. Reg. at 47,217). It is also reasonably 

discernible that Commerce did not consider this statement inconsistent with its tying 

determination because the GOC’s acknowledgment of support for one of several products 

does not mean that it knew and acknowledged prior to or concurrent with the bestowal of 

the subsidy that the program was intended to benefit any one of those products. See

Remand Results 46 (citing Countervailing Duties, 63 Fed. Reg. at 65,403 (stating that 

Commerce analyzes the purpose of the subsidy based on information available at the 

time of bestowal)).
Consol. Court No. 10-00055 Page 32

Lastly, U.S. Steel argues that Commerce’s tying determination is unsupported 

because there is no affirmative evidence suggesting that the steel rounds and billets 

provided at LTAR are used to produce any products other than OCTG. See U.S. Steel 

Remand Comments 10. However, Commerce makes clear that its practice does not 

consider the actual use of the products provided under the subsidy program in evaluating 

whether the subsidy program is tied to the production of subject merchandise. See

Remand Results 45 (citing Large Residential Washers from Korea I&D at 41). Commerce 

has explained this practice in the past by noting that tracing funds only establishes 

whether funds are actually used for their stated purpose or the purpose Commerce 

evinces from record evidence and not whether a benefit is conferred or what specific 

products the grantor intended to benefit. See Countervailing Duties, 63 Fed. Reg. at 

65,403. U.S. Steel highlights no reason this practice is unreasonable generally or as 

applied here. Commerce’s determination is therefore supported by substantial evidence.

CONCLUSION

Therefore, for the reasons discussed, the court sustains the Remand Results.

Judgment will enter accordingly.

/s/ Claire R. Kelly

Claire R. Kelly, Judge

Dated: May 3, 2017

New York, New York