Slip Op. 20 - 139
UNITED STATES COURT OF INTERNATIONAL TRADE

DONG-A STEEL COMPANY,

Plaintiff, and KUKJE STEEL CO., LTD., Consolidated Plaintiff,

v. UNITED STATES, Defendant, and

INDEPENDENCE TUBE CORPORATION, SOUTHLAND TUBE, INCORPORATED, ATLAS TUBE, and SEARING INDUSTRIES , Defendant-Intervenors. Before: Gary S. Katzmann, Judge Consol. Court No. 19-00104
PUBLIC VERSION

OPINION [Plaintiffs’ motion for judgment on the agency r ecord is granted in part, and Commerce’s Final Determination is remanded cons istent with this opinion.] Dated: September 29, 2020 Jarrod M. Goldfeder, Trade Pacific, LLP, of Wash ington, DC, argued for plai ntiff and consolidated plaintiff. With him on the brief was Robert G. Gosselink. Robert R. Kiepura, Trial Attorney, Commerci al Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, argue d for defendant. With him on the brief were Joseph H. Hunt, Assistant Attorney General, Je anne E. Davidson, Direct or and Tara K. Hogan, Assistant Director. Of counselwas Vania Y. Wang, Attorney, O ffice of the Chief Counsel for Trade Enforcement & Compliance, U.S. Depart ment of Commerce, of Washington, DC. With them on the supplemental brief was Ethan P. Davis, Acting Assistant Attorney GeneralConsol. Court No. 19-00104 Page 2 PUBLIC VERSION Robert E. DeFrancesco, III, Wiley Rein LL P, of Washington, DC, argued for defendantintervenors, Independence Tube Corporation and Southland Tube , Incorporated . With him on the brief were Alan H. Price, and Jake R. Frischknecht; and supplemental brief Elizabeth V. Baltzan. Roger B. Schagrin, Wiley Rein LLP, of Washington, DC, for defendant-intervenors, Atlas Tube and Searing Industries

. Katzmann, Judge: Did the Trade Preferences Extension Act of 2015 (“TPEA”) provide the United States Department of Commerce (“Commerce”) statutory authority to make a contested adjustment to the cost of production in an anti dumping (“AD”) proceeding? Were the application of various adjustments and the denial of othe rs unsupported by substantial evidence? These are among the issues presented by this case, involving a challenge to Commerce’s determination that Korean producers of heavy walled rectangular welded carbon steel pipes and tubes 1 (“HWR”) sold

1 Heavy walled rectangular welded carbon steel pipes and tubes (“HWR”) are pipes and tubes that are suitable, among other purposes, for the c onstruction of offshore structures, owing to the carbon steel’s high strength and its ability to take various structural shapes. C ARBON S TEEL P IPE AND C ARBON S TEEL T UBE , https://www.alro.com/divsteel/metals_com p_type.aspx?Mat=CARBON%20STEEL&Type=Pipe %20/%20Tube&mc=CS (last visite d Sept. 25, 2020); Jung Suk-Yee, United States Imposes High Tariff on South KoreanPipes and Tubes, B USINESS K OREA (Nov. 22, 2019, 8:57 AM), http://www.businesskorea.co.kr /news/articleView.html?idxno=38348(last visited Sept. 25, 2020). As to the product’s specifications, Commerce provides: The merchandise subject to the order is certain heavy walled rectangular welded steel pipes and tubes of r ectangular (including square ) cross section, having a nominal wall thickness of not less than 4 mm . The merchandise includes, but is not limited to, the American Society for Te sting and Materials (ASTM) A–500, grade B specifications, or comparable domestic or foreign specifications. Included products are those in which: (1) iron predominates, by weight, over each of the other contained elements; (2) the carbon cont ent is 2 percent or less, by weight; and (3) none of the elements below exceeds the quantity, by weight, respectively indicated: 2.50 percent of manganese, or 3.30 percent of silicon, or 1.50 percent of copper, or 1.50 percent of aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, orConsol. Court No. 19-00104 Page 3 PUBLIC VERSION their product in the United States at below normal value in their home market, resulting in the imposition of AD duties. Under this determin ation, Commerce imposed AD duty rates of 20.79 and 12.81 percent on Korean HWR manufacturers Dong-A Steel Company (“DOSCO”) and Kukje Steel Company (“Kukje”) (collectively, “Plainti ffs”), respectively. He avy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Re public of Korea: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments 2016–2017, 84 Fed. Reg. 24,471 (Dep’t Commerce May 28, 2019), P.R. 244 (“Final Results”) and accompanying Mem. from G. Taverman to J. Kessler, re: Issues and Decision Mem. for the Final Results of the í$GPLQLVWUDWLYH5HYLHZRIWKH$QWLGXPSLQJ'XW\2UGHUR Q+HDY\:DOOHG5HFWDQJXODU Welded Carbon Steel Pipes and Tubes from the Republic of Korea (Dep’t Commerce May 20, 2019), P.R. 237 (“IDM”). Plaintiffs bring this action against the Unite d States (the “Government”) to challenge Commerce’s dumping margin determinations and move for judgment on the agency record

0.40 percent of lead, or 2.0 percent of nickel, or 0.30 percent of tungsten, or 0.80 percent of molybdenum, or 0.10 percent of niobium (als o called columbium), or 0.30 percent of vanadium, or 0.30 percent of zirconium. The product is currently classified unde r following Harmonized Tariff Schedule of the United States (HTSUS) item numbers 7306.61.1000 . Subject merchandise may also be classified under 7306.61.3000. Although the HTSUS numbers and ASTM specification are provided for convenience and customs purposes, the written description remains dispositive. Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Korea: Preliminary Results of Antidumping Duty Admini strative Review and Preliminary Determination of No Shipments; 2016–2017, 83 Fed. Reg. 50,892 (D ep’t Commerce Oct. 10, 2018), P.R. 211 and accompanying Mem. from J. Maeder to G. Taverman, re: Decision Mem. for the Prelim. Results at 3–4 (Dep’t Commerce Oct. 3, 2018), P.R. 203.Consol. Court No. 19-00104 Page 4 PUBLIC VERSION pursuant to Rule 56.2 of the U.S. Court of Inte rnational Trade. DOSCO’s Mem. in Supp. of the R. 56.2 Mot. of Pl., DOSCO, for J. on Agency R., ECF No. 37 (“Pl.’s Br.”); Mem. in Support of the R. 56.2 Mot. of Consol. Pl., Kukje, for J. Upon the Agency Rec., ECF No. 38 (“Consol. Pl.’s Br.”). Specifically, Plaintiffs argue that Comm erce erred by (1) finding the existence of a particular market situation 2 (“PMS”) in Korea for hot rolled stee l coil (“HRC”), an input used to produce HWR; and (2) applying a cost-based PMS ad justment to Plainti ffs’ margin calculations - - under the auspices of TPEA -- outside the scope of a constructed value-to-price comparison. Pl.’s Br. at 1–2. See Consol. Pl.’s Br. at3. Plaintiffs addi tionally argues that Commerce improperly: (1) used DOSCO’s theoretical rather than actua l product weights; (2) det ermined that DOSCO was not entitled to a constructed export price (“CEP ”) offset; and (3) adjusted DOSCO’s reported raw costs to capture physical differen ces across product units. Pl.’s Br . at 2–4. See Consol. Pl.’s Br. at 3. The court grants, in part, P laintiffs’ motion for judgment on th e agency record and remands to Commerce its PMS determination and adjustment. The court sustains Commerce’s determinations on the remaining issues.
BACKGROUND I. Legal and Regulatory Framework Dumping occurs when a foreign company sells goods into the United States at a lower price than the company charges for the same pr oduct in its home market . Sioux Honey Ass’n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1047 (Fed. Ci r. 2012). To address the economic distortions

2 A particular market situation is any circumstan ce that “prevents a proper comparison” between a product’s normal value and its expo rt price. See 19 U.S.C. 1677b(a) (1)(B)(ii)(III). Under such circumstances, Commerce is authorized to use different methodologies to estimate normal value other than looking only at the e xporting country’s sales price, as is the normal method. For instance, Commerce may turn to th e product’s third country sales or constructed value instead. See Background infra Sec. I. B.Consol. Court No. 19-00104 Page 5 PUBLIC VERSION arising from such conduct, Congr ess enacted the Tariff Act of 1930, 3 which empowers Commerce to investigate potential dumpi ng activity and, if necessary, to issue orders imposing duties on subject merchandise. Id. When Commerce conclude s that AD duties are appropriate, the agency is required to determine margins as accurately as possible. Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990). Pursuant to 19 U.S.C. § 1673, Commerce im poses AD duties on foreign goods if it determines that the goods are being, or are likely to be, sold at less than fair value, and if the United States International Trade Commi ssion concludes that the sale of the merchandise below fair value “materially injures, threatens, or impedes the establishment of an industry in the United States.” Diamond Sawblades Mfrs. Coal. v. United St ates, 866 F.3d 1304, 1306 (Fed. Cir. 2017). Merchandise is sold at less than fair value when the product’s normal value is greater than the price charged for the product in the United Stat es (represented by the pro duct’s export price or the product’s CEP). Union Steel v. United States , 713 F.3d 1101, 1103 (Fed. Cir. 2013). The AD duty is calculated by determining the difference be tween the normal value and the export or CEP for the merchandise. 19 U.S.C. § 1673. A. Standard Normal Value Calculation Methodology Normal value is ordinarily computed by looking at the sales price of the subject merchandise in the exporting country. 19 U. S.C. § 1677b(a)(1)(B)(i). However, Congress

3 Further citations to the Tariff Ac t of 1930, as amended, are to the relevant provision of Title 19 of the U.S. Code, 2012 edition. Citations to 19 U.S.C. §§ 1677( 15), 1677b, and 1677m, however, are not to the U.S. Code 2012 edition, but to th e unofficial U.S. Code Annotated 2018 edition. The current U.S.C.A. reflects the amendments made to 19 U.S.C. §§ 1677(15), 1677b, 1677m (2012) by the Trade Preferences Extension Act of 2015, Pub. L. No. 114–27, § 502, 129 Stat. 362, 383– 84 (2015). The TPEA amendments ar e applicable to all determinations made on or after August 6, 2015, and therefore, are applicable to this proc eeding. See Dates of Application of Amendments to the Antidumping and Countervailing Duty Laws Made by the Trade Preferences Extension Act of 2015, 80 Fed. Reg. 46,793, 46,794 (Dep’t Commerce Aug. 6, 2015).Consol. Court No. 19-00104 Page 6 PUBLIC VERSION authorized Commerce to disregard the exporting c ountry’s sales price and to instead base the calculation of normal value on th ird country sales if Commerce determines that a PMS exists in the exporter’s home market. 19 U.S.C. § 1677b(a)(1)(C)(iii). 4 Alternatively, should Commerce find that normal value cannot be reliably determ ined from the exporting country’s sales price, Commerce may also use the product’s constructed value 5 (“CV”), calculated pursuant to 19 U.S.C. § 1677b(e), in lieu of normal value. 19 U.S.C. § 1677b(a)(4). This approac h, however, is similarly subject to a prior determination that the constr ucted value calculation would not be adversely distorted by the existence of an underlying PMS. Id.

4 In AD duty investigations, Commerce is direct ed to make a fair comparison between normal value and export price, pursuant to 19 U.S.C. § 1677b(a)(1)(B)(i), which provides: In determining under this title whether subjec t merchandise is being, or is likely to be, sold at less than fair value, a fair comparison sh all be made between the export price or [CEP] and normal value. In orde r to achieve a fair comparison with the export price or [CEP], normal value shall be determined [as] . . . the price at which the foreign like product is firs t sold (or, in the absence of a sale, offered for sale) for consumption in the exporting country. However, 19 U.S.C. § 1677b(a)(1)(C)(iii), spells out an exception when “[t]he particular market situation in the exporting country does not permit a proper comp arison with the export price or [CEP].” In such cases Commerce is directed to us e “third country sales” as the basis for estimating the product’s normal value. 19 U.S.C. § 1677b(a)(1)(B)(ii).

5 As specified in 19 U.S.C. § 1677b(e), constructed valu e represents: (1) “the cost of materials and fabrication or other processing of any kind [used] in producing the merchandise;” (2) “the actual amounts incurred and realized” for “selling, general, and administrative expenses, and for profits, in connection with the produc tion and sale of a forei gn like product, in the ordi nary course of trade, for consumption in the foreign country[;]” and (3 ) the cost of packing the subject merchandise. Further, 19 U.S.C. § 1677b(e) provides that: [I]f a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the co st of production in the ordinary course of trade, the administe ring authority may us e another calculation methodology under this part or any other calculation methodology. The meaning of “ordinary course of trade” is in turn drawn from 19 U.S.C. § 1677(15).Consol. Court No. 19-00104 Page 7 PUBLIC VERSION B. Particular Market Situation Deter minations and Adjustments under the TPEA. Broadly, a PMS exists when a market possesses a unique set of circumstances that “prevents a proper comparison” between a product’s normal valu e and its export price or CEP. See 19 U.S.C. § 1677b(a)(1)(B)(ii)(III). However, pr evious versions of the Tariff Act fell short of providing an explicit definition for a PMS. See Tariff Act, Pub. L. 103-465, § 773 (1994) (amended 2015). In 2015, Congress passed the TPEA , which, among other objectives, amended existing AD and countervailing duty statutes. Tra de Preferences Extension Act of 2015 § 504, 19 U.S.C. §§ 1677(15), 1677b(e). Secti on 504 of the TPEA in particul ar provided greater color to the meaning and scope of particular market situ ations and clarified the ci rcumstances under which Commerce may apply adjustments on the basis of a PMS determination. Specifically, section 504(a) incorporated PMS determinations as a circumstance existing outside of a country’s ordinary course of trade. 6 See 19 U.S.C. § 1677(15)(C). Concurrently, section 504(c) of the TPEA amended the calculation of constructed value to allow for PMS-specific adjustments. See 19

6 Section 1677(15) provides: The term “ordinary course of trade” mean s the conditions and practices which, for a reasonable time prior to the exportation of the subject merchandise, have been normal in the trade under cons ideration with respect to merchandise of the same class or kind. The administering author ity shall consider the following sales and transactions, among others, to be outside the ordinary course of trade: (A) Sales disregarded unde r section 773(b)(1) [regarding sales at less than cost of production]. (B) Transactions disregar ded under section 773(f)(2) [regarding special rules]. (C) Situations in which the administering authority determines that the particular market situation prev ents a proper comparison with the export price or cons tructed export price.Consol. Court No. 19-00104 Page 8 PUBLIC VERSION U.S.C. § 1677b(e). Here, the TPEAstipulates that a PMS exists wh en “the costs of materials and fabrication or other processing of any kind does no t accurately reflect the cost of production in the ordinary course of trade,” impeding Commerce’s ability to accurately estimate a product’s CV. See 19 U.S.C. § 1677b(e)(3). Under such a determination, the TPEAauthorizes Commerce to use “any other calculation methodology” to determine the cost of production in the exporting country for the purposes of calculating CV. Id. C. CEP Offset Determination Beyond correcting for the distortive effects of a PMS, part of Commerce’s statutory mandate to conduct a “fair comparison” of norma l value and export price also involves making: [T]wo types of adjustments to normal valu e based on differences in the level of trade. The first type is a level of trad e adjustment, 19 U.S.C. § 1677b(a)(7)(A), and the second type is a [CEP] offset, 19 U.S.C. § 1677b(a)(7)(B). Commerce will grant a [CEP] offset when “normal value is established at a level of trade which constitutes a more advanced stage of distribution than the level of trade of the [CEP], but the data availabl e do not provide an appropriate basis to determine . . . a level of trade adjustment.” Id. When th ese two conditions are present, Commerce must lower the normal value “by the amount of indirect selling expenses incurred in the country in which normal value is determined on sales of the foreign like product but not more than the amount of such expenses for which a deduction is made.” Id. Dong-A Steel Co. v. United St ates, 42 CIT __, __, 337 F. S upp. 3d 1356, 1374 (2018). In sum, Commerce may grant a CEP offset wh en it determines that an exporter’s home market is at a “more advanced stage” than its foreign markets, based inlarge part on the quantity and intensity of sales activities occurring at each market. 19 C.F.R. §§ 351.412(c )(2), 351.412(f)(1)( ii) (2020). Upon such a determination, Commerce is instructed to reduce its calculation of normal value to account for the difference in expenses that went towards the product’s sales. Simply put, when the home market level of trade (“LOT”) is more advanced th an the CEP LOT, but Commerce lacks the data to determine whether the difference will adve rsely impact price comparability, Commerce isConsol. Court No. 19-00104 Page 9 PUBLIC VERSION instructed to grant a CEP offset. See 19 U.S. C. § 1677b(7)(B); 19 C.F. R. § 351.412(f). “The party seeking a CEP offset bears the burden of establis hing that the differences in selling functions performed in the home and US markets are ‘s ubstantial.’” Hyundai Steel Co. v. United States, 43 CIT __, __, 365 F. Supp. 3d 1294, 1300 (2019) (citations omitted) (“Hyundai I”); see also 19 C.F.R. § 351.401(b)(1) (providing that the burden of establishing entitlem ent to a particular adjustment rests with the party in possession of the relevant information); Ad Hoc Shrimp Trade Action Comm. v. United States, 33 CIT 533, 556, 616 F. Supp. 2d 1354, 1374, (2009) (“While it is Commerce’s responsibility to determine if a petitioner qualifies for a CEP offset, it is the responsibility of the respondent requesting the CEP offset to pr ocure and present the relevant evidence to Commerce.”). II. Factual and Procedural History of the Case A. Commerce’s Administrative Review of HWR On August 17, 2015, Commerce initiated an investigation into HWR. See Initiation of Less-Than-Fair-Value Investigations, 80 Fed. Reg. 49,202, 49,203 (Dep’t Commerce Aug. 17, 2015). The investigation culminated in 2016 with an AD order on HWR pipe and tube from Korea. See Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Korea, Mexico, and the Republic of Turkey: Antidumping Duty Orders, 81 Fed. Reg. 62,865, 62,866 (Dep’t Commerce Sept. 13, 2016) (“the Order”). This action arises from Commerce’s Septem ber 2017 publication of a notice of opportunity to request review of the Order for the pe riod covering March 1, 2016, to August 31, 2017. Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 82 Fed. Re g. 41,595, 41,596 (Dep’t Commerce Sept. 1, 2017), P.R. 3. Following requests from domestic produ cers of HWR (including I ndependence Tube Corp.Consol. Court No. 19-00104 Page 10 PUBLIC VERSION and Southland Tube, Inc., Nucor companies; Atla s Tube, a division of Zekelman Industries; and Searing Industries) (collectively, “Petitioners ”), as well as from DOSCO and HiSteel, another Korean HWR manufacturer and exporter, Co mmerce commenced its 2016–2017 administrative review of the Order on November 13, 2017. See Ini tiation of Antidumpi ng and Countervailing Duty Administrative Reviews, 82 Fed. Reg. 52,268 (Dep’t Commerce N ov. 13, 2017), P.R. 5; Mem. from J. Maeder to G. Taverman, re: Decisi on Mem. for the Prelim. Results at 2 n.3 (Dep’t Commerce Oct. 3, 2018), P.R. 203 (“PDM”). For th is review, Commerce selected DOSCO and HiSteel as mandatory respondents. 7 See Mem. from A. Wood to M. Skinner, re: Selection of Resp’t for Individual Review (Jan. 12, 2018), P.R. 16. As part of their submissions, Petitioners ar gued that there existed a PMS in Korea that distorted the COP of Korean HWR. Letter from Wiley Rein LLP to Sec’y Commerce, re: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Korea: Particular Market Situation Allegation and Supporting Information (Aug. 31, 2018), P.R. 160 (“Petitioners’ PMS Allegation”). Petitioners cited four factor s in support of their PMS allegation: (1)

7 In AD duty investigations or administrative reviews, Commerce may select mandatory respondents pursuant to 19 U.S.C. § 1677f-1(c)(2), which provides: If it is not practicable to make indi vidual weighted average dumping margin determinations [in investigations or admi nistrative reviews] b ecause of the large number of exporters or pr oducers involved in the inve stigation or review, the administering authority may determine th e weighted average dumping margins for a reasonable number of exporters or producers by limiting its examination to- (A) a sample of exporters, producers, or types of products that is statistically valid based on the information availabl e to the administering authority at the time of selection, or (B) exporters and producers accounting fo r the largest volume of the subject merchandise from the exporting country that can be reasonably examined.Consol. Court No. 19-00104 Page 11 PUBLIC VERSION government subsidization of Kor ean hot-rolled steel products; (2) th e distortive pricing of unfairly traded HRC from China; (3) strategic alliances between Korean HRC suppliers and Korean HWR pipes and tubes producers; and (4) distortive government control over el ectricity prices in Korea. Id. DWí Petitioners claimed that earlier administrati ve reviews determined the existence of a PMS in Korea for products similar to HWR -- including oil country tubular goods (“OCTG”), welded line pipe (“WLP”), and circular welded pipe (“CWP”) -- based on the same four factors. Id. at 11. 8 Petitioners further alleged that Plaintiffs’ ho me markets should be considered not viable due to the PMS allegation, and that Commerce shoul d therefore use construc ted value as the basis for the product’s normal value calculation. IDM at 27 n.96 (citing Petitioners’ Letter, re: HeavyWalled Rectangular Welded Carbon Steel Pipes and Tubes from th e Republic of Korea: Market Viability Allegations as to DOSCO and HiSteel (Feb. 22, 2018)). B. Preliminary Results On October 10, 2018, Commerce published it s preliminary results. Heavy Walled Rectangular Welded Carbon Stee l Pipes and Tubes from the Re public of Korea: Preliminary Results of Antidumping Duty Administrative Re view and Preliminary Determination of No

8 See, e.g., Certain Oil Country Tubular Goods from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2014–2015, 82 Fed. Reg. 18,105 (Dep’t Commerce Apr. 17, 2017) and accompanying Issues and Deci sion Mem.; Certain Oil Country Tubular Goods from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2015– 2016, 83 Fed. Reg. 17,146 (Dep’t Commerce April 18, 2018) and accompanying Issues and Decision Mem.; Circular Welded N on-Alloy Steel Pipe from the Re public of Korea: Final Results of Antidumping Duty Administrative Review ; 2015–2016, 83 Fed. Reg. 27,541 (Dep’t Commerce June 13, 2018) and accompanying Issues and Decision Mem.; Welded Line Pipe from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2015–2016, 83 Fed. Reg. 33,919 (Dep’t Commerce July 18, 2018) and accompanying Issues and Decision Mem.; and Large Diameter Welded Pipe from the Republic of Korea: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 83 Fed. Reg. 43,651 (Dep’t Commerce Aug. 27, 2018) and accompanying Prelim. Decision Mem.Consol. Court No. 19-00104 Page 12 PUBLIC VERSION Shipments; 2016–2017, 83 Fed. Reg. 50,892 (Dep’t Commerce Oct. 10, 2018), P.R. 211 (“Preliminary Results”) and accompanying PDM. Commerce preliminaril y determined that the sale of Korean HWR in the U.S. had been ma de at prices below normal value. PDM at 1. Commerce also determined that a PMS in Korea distorted the cost of producing HWR, in line with Petitioners’ earlier allegations. Id. at 13. In reaching this conclusion, Commerce, as it had done in its previous determinations that found the existence of a PMS in Ko rea, analyzed the four factors raised by Petitioners based “on a totality of th e circumstances,” rather than relying on any one factor. Id. Though Commerce determined that th e PMS for Korean HWR resulted from the “collective impact” of the four factors, Commerce also determined that only the first factor -- government subsidization of HRC inputs -- could be properly quantified and therefore properly adjusted for. Id. Thus, Commerce applied a PMS adjustment based only on estimated subsidy rates obtained from prior studies of the Korean g overnment’s subsidizatio n of HRC calculated in a previous countervailing duty determination. Id . (citing Certain Hot-Rolled Steel Flat Products from Brazil and the Republic of Korea: Ame nded Final Affirmative Countervailing Duty Determinations and Countervailing Duty Orde rs, 81 Fed. Reg. 67,960 (Dep’t Commerce Oct. 3, 2016)). In so doing, Commerce adjusted DOSCO’s reported input costs in proportion to the company’s HRC purchases from subsidized supp liers. Id. at 20. However, Commerce disagreed with Petitioners that the PMS determination necessarily demonstrated a lack of market viability, and therefore Commerce used home market sales, rather than CV, as the basis for the normal value calculations. 9 See id. at 14. In its Preliminary Results, Commerce also calculated DOSCO’s AD

9 As noted by Commerce, the agency’s “viabil ity regulation is found at 19 C.F.R. § 351.404.” IDM at 29. Subsection (b) of the regulation in particular states: (1) The Secretary will consider the e xporting country or a third country as constituting a viable market if the Secretary is satisfied that sales of the foreignConsol. Court No. 19-00104 Page 13 PUBLIC VERSION margin based on its reported theore tical weights of sales of subject merchandise, rather than using DOSCO’s preferred “theoretical actual” (henceforth, actual) weights of sales. 10 See PDM at 9; see also IDM at 34. Additionally, Commerce pr eliminarily determined that DOSCO was not entitled to a CEP offset on the basi s of alleged differences in s ophistication of the LOTs between its home and export markets. PDM at 17–18.
C. Final Results In response to the Preliminary Results, Petiti oners, DOSCO, and HiSteel filed case briefs with Commerce in November 2018. See IDM at 2; Letter from DOSCO to Sec’y of Commerce, re: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from the Republic of Korea – Case Brief (Nov. 28, 2018), P.R. 218 (“DOSCO’s Ca se Brief”). Commerce received rebuttal briefs from the same parties one month later. IDM at 2; Letter from DOSCO to Sec’y of Commerce, re: Heavy Walled Rect angular Welded Carbon Steel Pipes and Tubes from the Republic of Korea – Rebuttal Brief (Dec. 3, 2018), P.R. 221 (“DOSCO’s Rebuttal Brief”). Commerce issued its Final Results in May 2019. Fina l Results; IDM. In it, Commerce sustained

like product in that country are of sufficient quantity to form the basis of normal value. (2) “Sufficient quantity” normally means that the aggregate quantity (or, if quantity is not appropriate, value) of the fore ign like product sold by an exporter or producer in a country is 5 percent or more of the aggregate quantity (or value) of its sales of the subject merchandise to the United States. 19 C.F.R. § 351.404(b)(1–2). And, “absent a reason to do otherwise, Commerce’s normal practice would be to use home market sales as th e basis for [normal value].” IDM at 29.

10 Both theoretical and “theore tical actual” weights are calc ulated by scaling the product’s dimensions by its density, using the same “standard industry formula,” with the only difference being the value used for the “thickness” component. IDM at 34. “Theoretical weight . . . is based on the thickness of the final HWR product and ‘theor etical actual’ weight us es the thickness of the input steel coil used to produce HWR.” Id. Neither metric captures the “actual measured weight” of the final HWR product itself, since “DOSCO does not weigh its products either after production or prior to shipment.” Id. Rather, both serv e as approximations for actual measured weight.Consol. Court No. 19-00104 Page 14 PUBLIC VERSION its earlier determination that a PMS existed with respect to the cost of HRC inputs for HWR from Korea. Id. Commerce also reaffirmed its view that a PMS adjustment to Plaintiffs’ cost of production was quantifiable and statutorily valid, but in a change from the Preliminary Results, reduced the PMS adjustment to more accurately reflect the net subsidy rate. IDM at 3. As part of the final PMS determination, Commerce affirmed its view that Korea did not lack home market viability. Id. In its case brief, DOSCO challenged Commerce’s PMS det ermination. DOSCO contended that the TPEA would allow Comm erce to apply a PMS adjustmentonly when using a price-toconstructed value comparison, but not to the ca lculation of COP as Commerce had done in its Preliminary Results. DOSCO’s Case Br. at 5–7. DOSCO further arguedthat Commerce’s PMS determination was unsupported by the record beca use Commerce reached this conclusion only after relying heavily on findings from prior ca ses involving different products. Id. at 7–13. DOSCO finally asserted that any PMS adjustment applied, should be drawn from the contemporaneous countervailing duty administrative review of Hot Rolled Steel from Korea to capture the most contemporaneous net subsidy rate data. Id. at 15–18. Petitioners by contrast argued that Commerce’s PMS adjustment, by only capturing the effect of the government subsidy, in fact failed to address the full extent of the distortions created by the PMS. IDM at 8–9 (summarizing Petitioners’ comments on PMS in Kor ea). Petitioners instead suggested alternative methodologies for calculating a more fulsome PMS adjustment value. See id. at 9. DOSCO responded that Petitioners’ proposed alternatives for estimating the appropriate PMS adjustment were untenable as a matter of law. DOSCO’s Rebuttal Br. at 9–11. Commerce likewise affirmed its use of theoretical rather than actual weights to estimate DOSCO’s dumping margin and restated its decisi on that a CEP offset wa s not warranted. Id. atConsol. Court No. 19-00104 Page 15 PUBLIC VERSION 304–35; 38–41. In its case brief, DOSCO contende d that Commerce introduced distortions into its AD margin calculations when it relied on the theo retical, rather than actu al, weight of DOSCO’s finished products, DOSCO’s Case Brief at 29–33, to which Peti tioners responded that DOSCO’s claim of such distortion was unsupported by compelling evidence, IDM at 33(summarizing Petitioners’ rebuttal comments). Finally, DOSCO argue d that it was entitled to a CEP offset as a result of a more advanced home market LO T than its CEP LOT, which DOSCO argued was evidenced by the different quantity, authority, and functions of its sales personnel in the home and U.S. markets. DOSCO’s Ca se Brief at 33–39. Petitioners responded by pointing to the “subjective” nature of DOSCO’s own assessments regarding the intensity of sales activity conducted for home market versus CEP LOTs. ID M at 37 (summarizing Petitioners’ comments on CEP offset). In a change from its Preliminary Results , Commerce altered Plaintiffs’ reported raw material costs in the Final Results, following Pe titioners’ comments regarding the differences in DOSCO’s reported COP figures for similar CONNUM s. Id. at 42. Petitioners noted that DOSCO reported different costs for products w ith similar control numbers (“CONNUMs”). 11 IDM at 42 (summarizing Petitioners’ comments regarding DOSCO’s reported CONNUMs). For this reason, Petitioners argued that Commer ce should apply an additional adjustment to the adjustments provided in the Preliminary Results. Id. DOSCO responded that no further adjustment was required, since the cost differences were either so small as to be negligible, or else could be explained by differences in the manufacturi ng process. DOSCO’s Rebuttal Brief at 18.

11 Sales of individual products are denominated by product control numbers denoted as “CONNUM” entries.Consol. Court No. 19-00104 Page 16 PUBLIC VERSION D. Procedural History DOSCO initiated this litigation on June 25, 2019, challenging the portions of Commerce’s Final Results pertaining to the calculation and ad justments of Plaintiffs’ AD margins. Summons, ECF No. 1; Compl. at 6, ECF No. 6. Kukje comm enced a separate action against the Government to challenge Commerce’s final determination, filing a summons and complaint on June 25, 2019. Kukje’s Summons, Kukje v. United States, N o. 19-105 (CIT filed June 25, 2019), ECF No. 1; Kukje’s Compl., Kukje, No. 19-105, ECF No. 6. On August 5, 2019, the court granted consent motions to allow Defendant-Inte rvenors Atlas Tube, Searing Industries, and Nucor Tubular Products Inc. (“Nucor”) to intervene in both ca ses. Kukje, No. 19-105, ECF Nos. 28, 29; Ct. Orders Granting Consent Mot. to Intervene as Def.-Inter., EC F Nos. 23, 24. On August 6, 2019, the parties filed a motion to cons olidate Kukje’s action (No. 19-105) with the lead case brought by DOSCO. Joint Mot. to Consol. Cases, ECF No . 25. The court granted the motion on August 13,
2019. ECF No. 26. On November 6, 2019, Plaintiffs filed a Ru le 56.2 motion for judgment on the agency record to challenge the Final Results. Pl.’s Br.; Consol. Pl.’s Br. The Government and DefendantIntervenor Nucor responded in opposition to Plainti ff’s motion. Def.’s Resp. to Pls.’ Mot. for J. Upon the Agency R., Mar. 3, 2020, ECF No. 43 (“Def.’s Br.”); Def.-Inter. Nucor’s Resp. Br., Mar. 3, 2020, ECF No. 44 (“Def.-Inter.’s Br.”). Plaintiffs subsequently replied. Reply of Pl., DOSCO, to Def.’s and Def.-Inters.’ Mem. in Opp’n to Pl.’ s’ Rule 56.2 Mot. for J. on the Agency R., Mar. 26, 2020, ECF No. 46 (“Pl.’s Reply”); Reply of Consol. Pl. Kukje, Mar 26, 2020, ECF No. 47 (“Consol. Pl.’s Reply”). In advance of oral argument, the court presented questions to which the parties responded in writing. See Ct.’s Letter Re garding Questions for Oral Arg., July 8, 2020, ECF No. 53; Pls.’ Resp. to Questions for Oral Arg., July 14, 2020, ECF No. 55; Def.’s Resp. toConsol. Court No. 19-00104 Page 17 PUBLIC VERSION the Ct.’s Questions for Oral Arg., July 14, 2020, ECF No. 58 (“Def.’s Resp. to the Ct.’s Questions”); Def.-Inter. Nucor’s Resp. to Ct.’s Questions for Oral Arg., July 14, 2020, ECF No. 57. Oral argument was held on July 16, 2020 via teleconference. ECF No. 59. Parties provided post-oral argument submissions on July 20, 20 20. Pls.’ Additional Comments Following Oral Arg., ECF No. 62; Def.’s Post-Oral Arg. Submission, ECF No. 60; Def.-Inter. Nucor Resp. to Ct.’s Req. for Additional Submission, ECF No. 61. JURISDICTION, STANDARD OF REVIEW , AND INTERPRETIVE FRAMEWORK The court has jurisdiction over this action pur suant to 28 U.S.C. § 1581(c), 19 U.S.C. § 1516a(a)(2)(A)(i)(II) and 19 U.S.C. § 1516a(a)(2)(B)(i). The standard of review in AD duty proceedings is governed by 19 U.S.C. § 1516a(b)(1)(B )(i), which provides that “[t]he court shall hold unlawful any determination, finding, or conclu sion found . . . to be unsupported by substantial evidence on the record, or othe rwise not in accordance with law.” Agency determinations must be supported by substantial evidence. Atl. S ugar, Ltd. v. United States, 744 F.2d 1556, 1559 (Fed. Cir. 1984). Substantial evidence “has been define d as ‘more than a mere scintilla,’ as ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’” Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed. Cir. 2002) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). The substantiality of evidence must account for anything in the record that reasonably detracts from its weight. CS Wind Vietnam Co. v. United States, 832 F.3d 1367, 1373 (Fed. Cir. 2016) (quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 720 (Fed. Cir. 1997)). This in cludes “contradictory ev idence or evidence from which conflicting inferences could be drawn.” Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 985 (Fed. Cir. 1994) (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 487 (1951)). Commerce must also examine the record and provide an adequateConsol. Court No. 19-00104 Page 18 PUBLIC VERSION explanation for its findings such that the record demonstrates a rational connection between the facts accepted and the determination made. See Moto r Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983); Ji ndal Poly Films Ltd. of India v. United States, 43 CIT __, __, 365 F. Supp. 3d 1379, 1383 (2019). Commerce’s fi ndings may still be found to be supported by substantial evidence despite the possibi lity that two inconsistent conclusions may be drawn from the record. Aluminum Extrusions Fair Trade Comm. v. United States, 36 CIT 1370, 1373 (2012). However, agencies act contrary to law if their decision-making is not reasoned. Burlington Truck Lines, Inc. v. United States 86í Additionally, to determine whether Commerce’s interpretation and application of a statute “is in accordance with the law,” the court must apply the two-step test laid out in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, In c., 467 U.S. 837 (1984). Under Chevron, [f]irst, always, is the question [of] wh ether Congress has directly spoken to the precise question at issue. If the intent of Congress is cl ear, that is the end of the matter; the court, as well as the agenc y, must give effect to the unambiguously expressed intent of Congre ss. If, however, the court determines Congress has not directly addressed the precise question at issue, the c ourt does not simply impose its own construction on the statute, as w ould be necessary in the absence of an administrative interpretation. Rather, if the st atute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute. 467 U.S. at 842–43. Deference to an agency’s inte rpretation of a statute is only required under Chevron when that interpretation is reasonab le. Koyo Seiko Co. v. United States, 36 F.3d 1565, 1573 (Fed. Cir. 1994).
DISCUSSION Plaintiffs moved for judgment on the agency record, arguing that: (1) Commerce’s PMS determination was unsupported by substantial evidence, Pl.’s Br . at 9; (2) even if the PMS determination was valid, Commerce improperly inte rpreted and applied section 504 of the TPEAConsol. Court No. 19-00104 Page 19 PUBLIC VERSION when imposing an additional cost-based PMS adjustment, id. at 10; (3) Commerce’s use of theoretical rather than actual weights for th e calculation of DOSCO’s AD margin introduced distortions in contravention of Commerce’s ob ligation to maximize accuracy, id. at 28; (4) Commerce erred in determining that DOSCO was no t entitled to a CEP offset, id. at 33; and (5) Commerce’s decision to adjust DOSCO’s reported raw costs in the calcul ation of DOSCO’s AD margin was unsupported by substantial evidence on the record, id. at 39. See also Consol. Pl.’s
Br. at 3. 12 Plaintiffs’ arguments are largely consistent with the points raised in the comments to the Preliminary Results. The Government responds that: (1) Commer ce’s PMS determination was supported by substantial evidence and in acco rdance with law, Def.’s Br. at 8; (2) Commerce properly determined that section 504 of the TPEA grants statutory authority to Commerce to make PMS adjustments to cost of production outside of a constructed value-to-pri ce comparison methodology, id. at 12; (3) Commerce’s calculation of DOSCO’s margins using theoretical rather than actual weights was supported by substantial evidence on th e record and in accordan ce with law, id. at 25; (4) Commerce properly determined that DOSCO was not entitled to a CEP offset, id. at 29; and (5) Commerce correctly found that DOSCO’s reported raw material costs warranted adjustment, id. at 34. See also Def.-Inter.’s Br. at 1. 13 The court grants Plaintiffs’ motion for judgment on the agency record with respect to the first two issues. For the re asons discussed below, the co urt holds that Commerce’s PMS

12 Kukje indicated its support for DOSCO’s motion and arguments before this court. Consol. Pl.’s Br. at 3. Kukje explained that it “was assigned a final [AD] duty margin that was an average of the rates assigned to mandatory respondents” and thus requests “any relief granted to DOSCO as a result of this appeal.” Id.

13 Nucor responds to Plaintiffs first issue and “inc orporate[s] by reference the arguments made by the United States in its Response Brief.” Def.-Inter.’s Br. at 2.Consol. Court No. 19-00104 Page 20 PUBLIC VERSION determination was not supported by substantial evidence. Thus, th e court remands to Commerce its PMS determination and adjustment. In the inte rest of judicial economy, the court also addresses the issue of statutory interpre tation. The court holds that Comm erce applied an impermissible interpretation of section 504 of the TPEA in a pplying the PMS adjustment; the plain meaning of the statute delineates narrow circumstances under which PMS adjustments may be applied. The first two issues notwithstanding, the court affirm s the remaining three determinations made by Commerce and challenged by Plaintiffs. I. Commerce’s PMS Determination Was Unsupported by Substantial Evidence. In its Final Results, Commerce determined that a PMS existed for HRC in Korea, which distorted the cost of production of Korean HWR. IDM at 13. Commerce reached this conclusion “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. In support of its PMS finding, Commerce drew on its recentdeterminations on OCTG, CWP, WLP, and large diameter line pipe (“LDWP”), in which “the same four factors” were found to support a PMS determination. Id. at 15 (citations omitted). Plaintiffs argue that Commerce’s PMS dete rmination was erroneous, as it relied “heavily” on Commerce’s prior determinations that this court determined were not based on substantial evidence. Pl.’s Reply at 7–8 (citing Nexteel Co. v. United States, 43 CIT __, 355 F. Supp. 3d 1336 (2019) (“Nexteel I”); Nexteel Co. v. United States, 43 CIT __, 392 F. Supp. 3d 1276 (2019) (“Nexteel II”); Hyundai Steel Co. v. United States, 43 CIT __, 415 F. Supp. 3d 1293 (2019) (“Hyundai II”)); Pl.’s Br. at 15–16. Plaintiffs cont end that Commerce thereby failed to meet the substantial evidence burden. Pl.’s Br. at 10. See al so Consol. Pl.’s Br. at 5 (“Because Commerce’s calculation of the final [AD] duty rate assigned to DOSCO was unsupported by substantialConsol. Court No. 19-00104 Page 21 PUBLIC VERSION evidence and otherwise not in accordance with law, Commerce’s calculation of the review-specific average rate assigned to Kukje[] as a non-examined company, which was based in part on DOSCO’s final [AD] rate, likewise was unsupporte d by substantial evidence and otherwise in accordance with law.”). The Government counters by arguing that the four factors it relied upon, viewed together, constitute substantial evidence. Def.’s Br. at 18. See also Def.-Inter.’s Br. at 18–
19. A. The Nonprecedential but Influential Nexteel Line of Cases, Involving First Impression of a PMS Determination Made by Commerce Under Section 504 of the TPEA, Are Persuasive. For a valid PMS determination, substantial ev idence must support a fi nding that “the costs 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 reby preventing Commerce from drawing accurate comparisons in its calculation of appropriate AD margins. 19 U.S.C. § 1677b(e). Caselaw involving PMS determinations under the TPEA is sparse. In fact, Nexteel I, on which Plaintiffs rely, is a case of first impression on the matter. In Nexteel I, plaintiff Nexteel challenged Commerce’s determination that a PMS existed w ith regard to Korean HRC. 355 F. Supp. 3d at 1346. In its 2014–2015 administrative review of OC TG imported from Korea, Commerce determined the existence of a single PMS in Kore a on the basis of four factors -- (1) government subsidization of Korean hot-rolled steel products; (2 ) the distortive pricing of unfairly traded HRC from China; (3) strategic alli ances between Korean HRC suppliers and Korean HWR pipes and tubes producers; and (4) distorti ve government control over electr icity prices in Korea. Certain Oil Country Tubular Goods from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2014–2015, 82 Fed. Reg. 18,105 (Dep’t Commerce Apr. 17, 2017) and accompanying Issues and Decision Mem. (“OC TG from Korea 14–15”). Commerce previouslyConsol. Court No. 19-00104 Page 22 PUBLIC VERSION declined to find the existence of four separate PMSs, one for each cited factor. Nexteel I, 335 F. Supp. 3d at 1346. The court at the time held it “ unreasonable that Commerce reversed its position and subsequently found a particular market situation based on the same evidence. It does not stand to reason that individually, the facts would not support a particul ar market situation, but when viewed as a whole, these same facts could s upport the opposite conclusion.” Id. at 1351. Consequently, the court held Commerce’s PMS de termination with respect to OCTG products from Korea to be unsupporte d by substantial evidence. Id. In its subsequent 2015–2016 administrative reviewof the same matter, Commerce again affirmed the existence of a PMS in Korea. Ce rtain Oil Country Tubular Goods from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2015–2016, 83 Fed. Reg. 17,146 (Dep’t Commerce Apr. 18, 2018) (“OCTG from Korea 15–16”) and accompanying Issues and Decision Mem. In so doing, “Commerce relie d on its prior finding of the existence of a particular market situation in the first admini strative review and continued to find in this administrative review that the circumstances re main ‘largely unchanged.’” Nexteel II, 392 F. Supp. 3d at 1287. As a result, the court again held that the PMS determination was unsupported by substantial evidence. Id. at 1288. The arguments raised by Plaintiffs here are similar in nature to those raised by the plaintiffs in Nexteel I and Nexteel II. Plaintiffs not e that, by Commerce’ s own admission, “the circumstances present during this review -- thatis, the PMS allegation itself and the record evidence concerning the allegation -- remained largely unchanged from those that led to the finding of a PMS in Korea in the other reviews.” I DM at 13 (citing OCTGfrom Korea 14–15; OCTG from Korea 15–16) (emphasis added). The langua ge used by Commerce in its administrative review of the Order here -- referencing the “largely unchanged” nature of the “record evidence” -Consol. Court No. 19-00104 Page 23 PUBLIC VERSION - identically mirrors the language used by Commerce in the administrative review that gave rise to Nexteel II. See 392 F. Supp. 3d at 1287. Thus, the r ecord evidence that Co mmerce relies upon to support its PMS determination here appears to be consistent with the evidence from prior administrative reviews, which the court has held to be insufficient to satisfy the substantial evidence burden. The Government argues in response that Next eel I and Nexteel II are distinguishable and non-binding. Def.’s Br. at 20–22. While it is true that those de cisions are non-binding, the court has determined that those earlier decisions are in formative and persuasive here. Moreover, the court notes that neither the Government nor Nucor offers more persuasive or binding case law as an alternative. B. Hyundai II is also Persuasive for Plaintiffs. Following Nexteel I and Nexteel II, the cour t was presented once more with a case involving a PMS determination under the TPEA . In its 2018 suit, plaintiff Hyundai contended that, in finding the existence of a PMS in Korea with regard to CWP, Commerce improperly relied on “the same insufficient facts and record ev idence” that had formed the basis for the PMS determination in OCTG from Korea 14–15, and since r ebuked by the court in Nexteel I and Nexteel II. Hyundai II, 415 F. Supp. 3d at 1297; Circular Welded Non-Alloy Steel Pipe from the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2015–2016, 83 Fed. Reg. 27,541 (Dep’t Commerce June 13, 2018) and accomp anying Issues and Decision Mem. In response to this claim, the court reiterated that “because Commerce’ s original finding of a [PMS] was not supported by substantial evidence [in Nexteel I], . . . Commerce’s finding of a [PMS] in the second administrative review wa s not supported by substantial evidence” in Nexteel II. Hyundai II, 415 F. Supp 3d at 1299. It follows that, as “Commerce’s finding ofConsol. Court No. 19-00104 Page 24 PUBLIC VERSION a [PMS] in the instant review was based upon ‘the same evidence . . . on the record,’ the court is compelled to conclude that Co mmerce’s finding of a [PMS] in th e instant review is also not supported by substantial evidence. ” Id. at 1300 (citations omitted). Plaintiffs in the immediate ac tion raise a nearly identical claim as the plaintiff in Hyundai II. Plaintiffs first note that the PMS allegation in Hyundai II w as “substantively the same” as the PMS allegation raised in OC TG from Korea 14–15. Pl.’s Repl y at 8 (citing Hyundai II, 415 F. Supp. 3d at 1300). Plaintiffs then observe that, in Co mmerce’s own words, “the facts in this review are largely identical to the facts in [OCTG fr om Korea 14–15].” Id. (quoting IDM at 15). Under the court’s holding in Hyundai II, record evidence that is “largely identical” or “virtually the same” to that raised in OCTG from Korea 14–15 will not support a PMS determination. 415 F. Supp. 3d at 1300. Since “the same evidence is on the record” here, Commerce’s PMS determination with respect to this administrative review appear s likewise unsupported by su bstantial evidence. See IDM at 15. While the Government correctly argues that Hyundai II is non-precedential, Def.’s Br. at 21–22, the court finds it to be persuasive. Again, the Government nor Nucor offers any more persuasive or binding ca se law on the matter. C. The Government’s Arguments Are Uncompelling. The Government argues that, despite this court’ s earlier rulings, the court should find the “confluence” of the four factors, viewed in “totality of the record evidence,” to meet the requisite evidentiary burden, even though only one of the factors is directly quantifiable. Def.’s Br. at 18, 20. The Government here articulates the view that the four factors, though spelled out individually, are necessarily interrelated and that they “r epresent[] facets of a single [PMS].” Id. at 18. Similarly, Nucor argues that no standard exists which requires Commerce to quantify and analyze each factor individually. Def.-Inter.’s Br. at 19–20.Consol. Court No. 19-00104 Page 25 PUBLIC VERSION The Government further argues that, in a ddition to being non-bi nding, Nexteel I and Nexteel II, as well as Hyundai II, can all be distin guished from the immediate case. Id. at 21. In Nexteel I, the court found it “unreasonable that Commerce reversed it s position,” between the publication of the preliminary and final results as to the existence of a PMS in Korea. Nexteel I, 355 F. Supp. 3d at 1351. The Government contends th at the reversal of posi tion, rather than the evidentiary support for a PMS finding (or lack thereo f), constituted the crux of the Nexteel holding. Def.’s Br. at 21. Under the Government’s view, since Commerce here made an affirmative PMS determination in its Preliminary Results, which it sustained in its Final Results, there was no reversal of position, and “notwithstanding that Co mmerce compared the record here to that of Nexteel I, this is a fundamentally different case. ” Id. The Government further argues that, since the outcomes of Nexteel II and Hyundai II were both derived from the holdi ng in Nexteel I, the latter cases also turned on the reversal of Commerce’s initial PM S determination, rather than on the record evidence. Id. The Government’s argument here is unpersuasive. Though the court indeed found it “unreason able that Commerce reversed its pos ition,” the court’s holding (that the PMS determination was unsupported by substantial ev idence) was ultimately based on the lack of record evidence, which did not change betw een the preliminary and final results of the administrative review. Nexteel I, 355 F. S upp. 3d at 1349–51 (“Commerce failed, however, to substantiate its finding of one particular market situation with evidence on the record.”). The record evidence (or rather, lack thereof) which was the underlying basis for the court’s decisions in Nexteel II and Hyundai II also serves as the record evidence in the immedi ate case. This overlap is more dispositive than any reversal in positio n made by Commerce between the preliminary and final results.Consol. Court No. 19-00104 Page 26 PUBLIC VERSION While Commerce acknowledged that “the same evid ence is on the record of this review,” IDM at 12, it argued that the facts available here are more complete than in previous proceedings, a claim that the Government repeats. IDM at 18–19; Def.’s Resp. to the Ct.’s Questions at 5 (“[T]his record contains additional informati on supporting the four fact ors upon which Commerce determined a PMS exists”). This alone is in sufficient -- the Governme nt must additionally demonstrate that Commerce actually relied on the more expansive factual evidence in reaching the PMS determination. Hyundai II, 415 F. Supp. 3d at 1300 (“Despite the more expansive record, . . . Commerce relied upon virtually th e same record evidence that wa s present in the [earlier] OCTG record”). Commerce is entitled to a presumption thatit has “considered all of the record evidence,” absent a showing to the contrary. Jacobi Carbons AB v. United States , 43 CIT __, __, 422 F. Supp. 3d 1318, 1325 n.10 (2019) (citing Siemens Energy, In c. v. United States, 38 CIT __, __, 992 F. Supp. 2d 1315, 1324 (2014), aff’d, 806 F.3d 1367 (Fed. Cir. 2015)). However, a presumption of consideration differs markedly from a demonstration of actual relian ce on the evidentiary record. Here, Commerce did place the evidence on the r ecord, but, despite what Commerce or the Government may argue, it is clear from the r easoning provided by Commerce itself that the PMS determination was predicated on the “largely unchanged,” “largely identical,” “same” record evidence from the prior proceedings. IDM at 13, 15; see Background supra Sec. I. (A.–B.). Even barring Commerce’s “large ly unchanged” language in the IDM, it is apparent that Commerce nonetheless drew heavily on the same record evidence from prior administrative reviews to reach its determination here. Compare Petitioners’ PMS Allegation at 11 (arguing that “[a]s it found with respect to OCTG, WLP, and CWP . . . , and preliminarily for LDWP from Korea, [Commerce] here should find that a PSM exists in Korea” for HWR), id. at 15–23 (describing the nature of the e xhibits associated with the PMS allegation, including that many fromConsol. Court No. 19-00104 Page 27 PUBLIC VERSION earlier administrative proceedings implicated in Nexteel I, Nexteel II, and Hyundai II), and id. at 23 (acknowledging that “evidence for this review [includes] evidence considered by [Commerce] in the first and second administrativ e reviews of OCTG from Korea, the first administrative review of WLP from Korea, the 2015–2016 administrativ e review of CWP fr om Korea, and the investigation on LWP from Kor ea”) with IDM at 12–19 (relying on the PMS Allegation exhibits, which refer back to the prior administrative review s, or directly invoking the prior administrative reviews to defend the PMS determination with regard to Korean HWR). D. The Original Record Evidence Was and Remains Insufficient To Constitute Substantial Evidence. Commerce, by its own admission an d contrary to the arguments raised by the Government, relied on substantially the same record evidence in reaching its PMS determination here as underlay earlier administrative reviews. Applying the court’s reasoning in Nexteel I, Nexteel II, or Hyundai II the court therefore finds , again, that the record eviden ce fails to meet the substantial evidence burden. As an example of the overlap in record evidence, the court takes Commerce’s argument that the distortive influx of cheaply pri ced Chinese HRC contributes to the existence of a PMS. IDM at 13. As evidence that this infl ux “plac[es] downward pressure on Korean domestic steel prices,” Commerce relied upon Exhibits 2–5 of the Petitioners’ PMS Allegation. Id. Problematically, each of these exhibits simply constitutes portions of the record evidence from Commerce’s prior administrative reviews (Exhibit 2 is the IDM for OCTGfrom Korea 14–15; Exhibit 3 is the IDM for OCTG from Korea 15–16; Exhibit 4 is the IDM for Commerce’s 2015– 2016 administrative review of CWP from Korea; Exhibit 5 is the IDM for Commerce’s first administrative review of WLP from Korea). Pe titioners’ PMS Allegation at 17–20. By relying on previous record evidence that the court alread y deemed insufficient to meet the substantial evidence standard, Commerce merely incorporates and accentuates the flaws the court previouslyConsol. Court No. 19-00104 Page 28 PUBLIC VERSION identified. Regarding the unfairl y traded HRC from China, for example, Commerce previously, and again here, neglected to clarify whether the ri se in steel exports from China is a trend “unique to Korea.” See Nexteel I, 355 F. Supp. 3d at 1350 (citation omitted). Otherw ise, “[t]he potential broad effect on prices creates a situation outside the scope of a [PMS], as the impact of Chinese exports in the Korean market [may ] also [be] reflected in other markets across the world.” Id. (quotation omitted). By the same logic, similar fl aws may be identified regarding the other three factors. 14 Accordingly, the court grants Plaintiffs’ mo tion as to the PMS determination and remands this determination to Commerce.

14 The Government contends that the record evidence “contains additional information supporting the four factors upon which Commerce determined a PMS exists.” Def.’s Resp. to the Ct.’s Questions for Oral Arg. at 5. The Government provided examples of such additional record evidence available to Commerce:

x Global Trade Monitor reports on stee l exports (Exhibits 40 and 41);

x Global Trade Atlas data on Chinese exports of hot-rolled steel and Korean imports of hot-rolled stee l (Exhibits 44–47);

x Additional articles and reports on the gl obal overcapacity of steel (Exhibits 54, 57, 59, 60);

x POSCO’s earnings during the period of review (Exhibits 55, 67),

x Information about POSCO’s and Hyunda i steel merger (Exhibits 71, 72);

x Regression analysis to estimate the effect of global excess capa city of steel on Korean hot-rolled steel imports (Exhibit 82); and

x Decisions of the Korea Fair Trade Co mmission (Exhibits 95–103), and information on electricity rates (Exhibits 106–108) and operating losses of Korean electricity providers (Exhibits 104, 105, and 118). Id. However, Commerce did not invoke these exhi bits, except the Decisions of the Korea Fair Trade Commission, in explaini ng its PMS determination in the IDM. See IDM at 15–17 nn.54– 55 (citing to Exhibit 9, a memorandum from the earlier Hot Rolled Steel from Korea countervailing duty investigation), n.57 (citing to Exhibits 2–5) , n.65 (citing to Exhibit 9) , n.67 (citing to Exhibits 31, 77, materials from the earlie r LDWP and OCTG investigations), and n.69 (citing to Exhibit 4, the IDM from CWP).Consol. Court No. 19-00104 Page 29 PUBLIC VERSION II. Commerce’s Application of Section 504 of the TPEA To Impose a PMS Adjustment Outside the Context of a Price-to-Constructed Value Comparison Is Not in Accordance with Law. On the basis of its PMS determination, Comme rce applied an upward adjustment to the AD margin calculations. Plaintiffs argue that, even if the PMS determination was valid, the adjustment was procedurally deficient under rele vant provisions of the TPEA. Pl.’s Br. at 9, 11. The Government and Nucor contend in response that Congress intended the TPEA to broadly empower Commerce to make PMS adjustments. Def.’s Br. at 13; Def.-Inter.’s Br. at 3–4. The question of procedural adequacy only becomes an issue if, upon remand, Commerce determines that its PMS determination was support ed by substantial evid ence beyond the evidence cited in the IDM and that Commerce actually relied on that evidence. Nevertheless, in the interests of judicial economy, the court addresses the issue here. A. Section 504 of the TPEA May Not Be Applied to Commerce’s AD Calculations Outside of a Price-to-CV Calculation

. Plaintiffs, the Government, and Nucor are correct that the crux of this issue will largely turn on the interpretation and scope of the TPEA ’s provisions, in particular section 504. Under Chevron, the court must first consider whethe r Congress has “directly spoken to the precise question at issue.” 467 U.S. at 842–43. To do s o, the court may take into account the statutory structure and legislative hist ory. See Timex V.I., Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998). Both are raised by the part ies and are discussed in turn below. Plaintiffs advocate for a reading of the statute that aligns with the scope-of-subparts

canon. 15 Plaintiffs assert that TPEA section 504 authorizes Commerce to adjust a producer’s

15 The scope-of-the-subparts canon advo cates for a reading of statutor y text such that “[m]aterial within an indented subpart relates only to that subpart; material contained in unindented text relates to all the following or preceding indented subparts.” Antonin Scalia & Bryan A. Garner, READING L AW : T HE INTERPRETATION OF L EGAL T EXTS xii (2012).Consol. Court No. 19-00104 Page 30 PUBLIC VERSION actual cost of production following a PMS allegati on only when calculating an AD margin based on a price-to-constructed value metric. Pl.’s Br . at 11–12. Plaintiffs note that, since Commerce found the Korean home market viable in the Final Results, a price-to-price comparison methodology was appropriate. Id. at 10–11. Plaintiffs allege that Commerce acted improperly by deriving the PMS adjustment to the Plaintiffs’ AD margin calculations by comparing “net U.S. prices to above-cost, net home market prices (i.e ., ‘price-to-price comparisons’)” rather than priceto-constructed value comparisons. Id. Plaintiffs draw this c onclusion by pointing to the text of the TPEA. Section 504(a) of the TPEA incor porated PMS determinations as a circumstance existing outside of the ordinary course of trade (as set forth in 19 U.S.C. § 1677(15)(C)). Section 504(b) amended the calculation of co nstructed value as defined in 19 U.S.C. § 1677b(e) to likewise allow for PMS-specific adjustments. 19 U.S.C. § 1677b(e)(3). Plaintiffs argue that since the TPEA did not alter other statutory provisions, including the provisions sp ecifically governing the calculation of cost of producti on for sales-below-cost purpos es, Congress “unambiguously signaled” its intent to limit PMS adjustments ofcost of production to cases involving only CVbased calculations. Pl.’s Br. at 12. In contrast, the Government argues that th e court should apply the whole-text and harmonious-reading canons to its interpretation of the TPEA. Unde r this approach, the focus of the court should be the statute’s bigger picture. The Government argues generally that Commerce acted with proper statutory authority when it impo sed the PMS adjustment. Def.’s Br. at 12. The Government and Nucor note that 19 U.S.C. § 1677b mandates Commerce to achieve a fair comparison between normal value and export price, and that this “broader stat utory purpose of fair comparison” requires Commerce to refrain from usi ng distorted values in it s margin calculations. Id. at 13; Def.-Inter.’s Br. at 3. More specifically, the Government contends th at the language ofConsol. Court No. 19-00104 Page 31 PUBLIC VERSION these provisions broadly tasks Comme rce to use “non-distorted values in its comparisons of normal value and export price, regardless of whether normal value is based on sales prices or a constructed value.” Def.’s Br. at 13. Thus, under the Governme nt’s view, Plaintiffs ignore the forest for the trees. Additionally, the Governme nt refers to the TPEA language allowing Commerce to employ “any other calculation methodology” to estimate c onstructed value upon dete rmining the existence of a PMS. Id. at 16 (citing 19 U.S.C. § 1677(b)). It then argues it would be “illogical” to conclude that Congress intended for Comme rce to correct PMS distortions in the context of constructed value but to disregard similar distortions when considering cost of production or the sales-belowcost test, especially as “distortions prevent pr oper comparison whether normal value is based on home market prices or constructed value.” Id. 16 See also Def.-Inter.’s Br . at 8–9 (arguing that Commerce did not intend to limit Commerce’s flexibili ty in adjusting for a PMS, but instead that it required Commerce to adjust for PMS”). The Government also advances the view that , by incorporating PMS determinations into the definition of ordinary course of trade (sp elled out in 19 U.S.C. § 1677(15)), Congress implicitly authorized PMS determinations -- and corresponding PMS adjustments -- to be incorporated into all portions of the statute that cite to 19 U.S.C. § 1677(15) or th at invoke the “ordinary course of

16 To further support its claim, the Government refe rs to the TPEA’s legislative history, arguing it demonstrates Congressional intent to give Co mmerce great “flexibility” over methodology so as to avoid distortions in the calculation of prices and costs. Def.’s Br. at 14 (citing S. Rep. No. 114- 45, at 37 (2015)). The legi slative history, the Government observes, “does not di stinguish between calculating a duty based on sales pric es or constructed value.” Id. P laintiffs argue in response that the legislative history cited by the Government c onstitutes “cherry-picked statements” that support their conclusion only when coupled w ith “a tortured analysis of various statutory provisions,” but decline to present an alternative interpretation. Pl.’s Reply at 2. Even so, the Government’s argument is not persuasive. Where a statute is unambiguous, its interpretation need not turn on legislative intent. Chevron, 467 U.S. at 842–43; Timex V.I., Inc. , 157 F.3d at 882. Here, the statute clearly describes the circ umstances under which Commerce is authorized to find and adjust for PMS determinations. As such, any debate ov er legislative history do es not alter the outcome.Consol. Court No. 19-00104 Page 32 PUBLIC VERSION trade” language. Def.’s Br. at 16. See also Def.-Inte r.’s Br. 3. However, as noted by Plaintiffs, the TPEA limited its definition of “outside the ordi nary course of trade” to those “[s]ituations in which the administering authority determines that the [PMS] prevents a proper comparison with the export price or [CEP].” 19 U.S.C. § 1677(15) (emphasis added). Thus, under Plaintiffs’ reading, the inclusion of the PMS cl ause into the statutory definiti on of “ordinary course of trade” would be limited to circumstances where the PMS interferes with fair comparisons with export price or CEP, but not with cons tructed value or other metrics. Although the interpretations rais ed by the parties appear defensible to a degree, the court has previously adopted the narrower view advanc ed by the Plaintiffs, as discussed further below. The court is also bound by preced ent dictating that, “where ‘Congr ess includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.’” Thomas v. Nicholson, 423 F.3d 1279, 1284 (Fed. Cir. 2005) (ci ting Russello v. United States, 464 U.S. 16, 23 (1983)). This is complementary to the scope-of- subparts canon that Plaintiffs indirectly invoke. Under such a presumption Plaintiffs’ narrower inte rpretation is compelling, as it is presumed that Congress intended to limit the circumstances under which a PMS determination would authorize Commerce to apply an adjustment. Plaintiffs’ vie w is also more congruent with the purpose of statutory interpretation as articulated by the Supreme Court. Bd. of Governors of Fed. Reserve Sys. v. Dimension Fin. Corp., 474 U.S. 361, 373–74 (1986) (“Invocation of the “plain purpose” of legislation at the expense of the terms of the st atute itself takes no account of the processes of compromise and, in the end, prev ents the effectuation of congr essional intent.”) (citations omitted).Consol. Court No. 19-00104 Page 33 PUBLIC VERSION B. Plaintiffs’ Argument that the PM S Actually Constitutes Part of the “Ordinary Course of Trade” Is Unconvincing Plaintiffs observe that: Commerce first concluded that a PMS ex isted in [OCTG from Korea 14–15]. POR for the review at issue in this action ended in August 2017. Thus, for a minimum of 37 months, Commerce has found that a PMS has existed in Korea that has distorted the cost of pro duction. In other words, Comm erce itself has determined that for a period of three years and perhaps longer, the market situation in Korea is not unusual, but rather, actually represents “the conditions and practices which, for a reasonable time prior to the exportation of the subject merchandise, have been normal. Pl.’s Br. at 17–18 (citation omitted). On the basis of th e longevity of this determination, Plaintiffs suggest that the very market situation that Commerce deems unus ual is actually “normal” and therefore requires no correction. Id. However, Plaintiffs do not provide any statutory basis for this conclusion, and the Government notes that “[ t]he statute contains no temporal limit for how long a PMS may exist.” Def.’s Br. at 23. Nowhere in the language of the Tariff Act or the TPEA does Congress provide a maximum duration requirement for PMS determinations. Moreover, a PMS by its very definition exists outside the “o rdinary course of trade.” See 19 U.S.C. § 1677(15)(C). Rather, Plaintiffs w ould read in an implied limitation to PMS determinations, whereby a sustained determination would eventual ly render itself void. See Pls.’ Resp. to Questions for Oral Arg. at 8–9. Lacking a statutor y basis for this conclusion, Plaintiffs’ line of argument is not convincing. C. Persuasive Caselaw Supports Plaintiffs’ Position. Plaintiffs also bolster their position -- “that Commerce is stat utorily permitted to modify a respondent’s reported costs under 19 U.S.C. § 1677b because of a PMS only when calculating normal value using [constructed value] under 19 U.S.C. § 1677b(e)” -- by referring to recent decisions by the court. See, e.g., Pl.’s Reply at 3 (citi ng Saha Thai Steel Pipe Public Co. v. UnitedConsol. Court No. 19-00104 Page 34 PUBLIC VERSION States, 43 CIT __, __, 422 F. Supp. 3d 1363, 1369 ( 2019) (citations omitted) (holding “unsupported in the law” the “contention that Section 504 [of the TPEA] authorized Co mmerce’s comparison of U.S. prices to home-market sales instead of CV ”)). The court finds Saha Thai to be persuasive here. As the court discussed in Saha Thai, th e TPEA did not amend 19 U.S.C. § 1677b(b)(3) defining cost of production; rather, it only dire ctly modified 19 U.S.C. § 1677b(e) defining CV. 422 F. Supp. 3d at 1368. For this reason, the court the re held that PMS determinations made under TPEA Section 504 do not authori ze Commerce to make PMS adjustments outside the scope of a price-to-constructed value calculation. Id. The Government offers little in way of reply, other than to note that the Saha Thai decision is non- binding. Def.’s Br. at 17–18. However, neither the Government nor Nucor presents more persuasive alternative case law. Similarly, Plaintiffs rely on Husteel Co. v. United States. Pl. ’s Br. at 4 (quoting Husteel Co. v. United States, 44 CIT __, __, 426 F. Supp. 3d 1376, 1387 (2020) (“[N]othing in the statutory scheme . . . can be read to grant Commerce the authority to modify the below cost sales test to account for a PMS. Indeed, the st atute precludes a PMS adjustment to [cost of production] for the below cost sales analysis.”) (citations omitted)). The court in Husteel held that “Commerce is not authorized to tinker with the below cost sales calc ulation because of a PMS. No part of the [TPEA] allows Commerce to use ‘any othe r methodology’ when market sales are used for normal value. The ‘any other methodology’ language is reserved so lely for when normal value is determined by constructed value.” 426 F. Supp. 3d at 1388. Th e court in Borusan Mannesmann Boru Sanayi v. Ticaret A.S., moreover, adopted the same reasoning, holding that Commerce’s PMS adjustment was contrary to law. 44 CIT __, __, 426 F. Supp. 3d 1395, 1411 (2020). As the court noted, in “recent and thorough opinions[,] the court has explained that no adjustment for a PMS is permitted for the sales below cost test.” Id. (citing Husteel, 426 F. Supp. 3d 1376, and Saha Thai, 422 F.Consol. Court No. 19-00104 Page 35 PUBLIC VERSION Supp. 3d 1363). The court determines that Husteel and Borusan are persuasive here. As in Saha Thai, the court in Husteel and Borusan applied a narrow interpretation of the circumstances under which Commerce may make PMS adjustments. As noted above, the Government similarly declines to suggest any alternative case law. The court in Husteel also held, re garding the ordinary course of trade language, that “[i]f a PMS prevents a proper comparison with export price or CEP, sales would indeed be considered outside the ordinary course of trad e; as such, they shall be disreg arded. Alternatively, the existence of the PMS would justify Commerce using third country sales or constructed value.” Husteel, 426 F. Supp. 3d at 1388. In either case, Commerce woul d not be allowed to adjust the sales-belowcost calculation on account of a PMS determination. Because of the similar facts present here, the court reaches the same conclusion. In sum, the court determines that Saha Thai, Husteel, and Borusan are persuasive for the determination of the case at bar. Moreover, ther e is binding precedent th at supports Plaintiffs’ narrower interpretation of the statutory limits of the TPEA. See Thomas, 423 F.3d at 1284; Russello, 464 U.S. at 23. Accordingly, if Commer ce decides on remand that a PMS exists, the court remands the PMS adjustment determinatio n to Commerce for a determination in accordance with this opinion. III. Substantial Evidence Supports Commerce’s Decision to Use Theoretical Rather than Actual Weights. In its Final Results, Commerce chose to use DOSCO’s theoretical rather than actual product weights. IDM at 34–35. 17 DOSCO alleges that Commerce not only failed to adequately

17 In justifying its deci sion, Commerce provided: First, we are able to compare sales and costs on a consistent weight basis for DOSCO, as it provided theoretical weight data for its home market and U.S. sales,Consol. Court No. 19-00104 Page 36 PUBLIC VERSION justify its use of theoretical weights, but that in relying on the theoretical metric, Commerce actually distorted its own calculation of DOSCO’s AD duty margins in contravention of its obligations under 19 U.S.C. § 1677b( a) to administer AD duty laws based on a “fair comparison . . . between the export price or [CEP] and normal value.” DOSCO’s Br at 26, 30. In particular, DOSCO reported that it agrees to quantity toleran ces for its U.S. sales that are [[ ]] times larger than tolerances for its home market sales, indi cating the presence of me aningful variation in theoretical weights. 18 Id. at 31. DOSCO also notes that its specific internal operating standards tended to produce actual weights that erred, on the whole, toward the [[ ]] of the tolerance spectrum. Id. at 32. Therefore, DOSCO argues that using theoretical weights overinflates the true weight of the merchandise to which the AD duty margin is applied.

and cost databases based upon those theore tical weights. Second, DOSCO’s U.S. customers order products based on nomi nal dimensions, and are invoiced on a theoretical weight basis ( not a “theoretical actual” weight basis). Third, the CONNUM, which is used to match sales inthe home and U.S. markets, is created from the nominal product dimensions as reported by DOSCO in its responses to Commerce’s questionnaire, and theoretical weight is derived from nominal dimensions. Accordingly, there is a correspondence between the product CONNUM, i.e., the basis for market comp arisons, and theoretical weight. This correspondence does not exist between th e product CONNUM and “theoretical actual” weight. Finally, Commerce’s methodology in this case has been upheld by the CIT. IDM at 34–35 (citations omitted).

18 The weighted average tolerance captures the average percentage difference between the product’s aggregate theoretical and aggregate act ual quantities. In pr actice, the tolerance represents the variance between the product’s th eoretical and actual weight -- a lower tolerance indicates that the theoretical and actual weights will be more similar, while a higher tolerance indicates that the theoretical and actual weight s will differ more meaningfully. According to DOSCO’s submitted databases, the weighted-avera ge tolerance over the period of review was [[ ]] percent for the home market but [[ ]] for th e U.S. market. Pl.’s Br. at 31. Further, DOSCO asserts that its home market consumers generally agree to a tolerance within [[ ]] percent while its sales to U.S. customers genera lly have a [[ ]] percent tolerance agreement. Id.Consol. Court No. 19-00104 Page 37 PUBLIC VERSION In response, the Government notes that Comm erce successfully relied on theoretical weights in past proceedings. Def .’s Br. at 26. Moreover, the Government emphasizes that “DOSCO’s U.S. customers order products base d on nominal dimensions (used to calculate theoretical weight), and are invoiced on a theoretical weight basis. Thus, the use of theoretical weight is consistent with Comm erce’s general preference for making sales comparisons on the basis on which U.S. sales [are] made.” Id. (ci tations and quotations omitted). The Government also argues that DOSCO’s claims suffer on two counts: first, by failing to show that actual weights are any more accurate than theoretical weights, a nd second, by failing to demonstrate the precise nature or dimension of the distortions allege dly arising from Commerce’s use of theoretical weights. Id. at 28. Finally, the Government argues that, barring a clear mandate from Congress, Commerce is free to “perform its duties in the way it believes most suitable,” including in the selection of theoretical or actual weights for the calculation of AD margins. Id. (citing JBF RAK LLC v. United States, 790 F.3d 1358, 1363 (Fed. Cir. 2015)). The reasonable exercise of Commerce’s discretion, however, remains subjectto the substantial evidence standard. A. Persuasive Case Authority of Dong-A Steel The parties note that Commerce has in prior instances relied on theoretical weights and actual weights alike and has successfully conve rted between the two without issue. See DOSCO’s Case Brief at 29–33; Def.’s Br. at 26. Give n this pattern, DOSCO argued that Commerce “does not have a stated preference” for using either actual or theoreti cal weights, but rather uses whichever metric best serves its mandate for drawing a fair comparison. DOSCO’s Case Brief at 33. In response, the Government notes Commer ce’s preference for comparing prices based on U.S. sales. Def.’s Br. at 26. Further, the Government cites to this cour t’s previous holding, on nearly identical facts, that “C ommerce’s decision to use theore tical weight is supported byConsol. Court No. 19-00104 Page 38 PUBLIC VERSION evidence on the record that U.S. customers ordered and were billed using nominal values.” Def.’s Br. at 26 (citing Dong-A Steel Co., 337 F. S upp. 3d at 1373). There, based on identical facts -- that DOSCO’s American customers placed orders and received invoices on a nominal (theoretical) basis -- the court was convinced that Commerce met its substantial evidence burden. Dong-A Steel Co., 337 F. Supp. 3d at 1373. The court agrees . That DOSCO’s client s continue to place orders and receive invoices on the same nomina l, theoretical basis, is therefore compelling evidence for finding Commerce’s determination to be supported by substantial evidence in the current proceeding. Consequently, the court finds th at Commerce’s use of theoretical weights was supported by substantial evidence. 19 B. Commerce Did Not Fail To Respond to All Material Issues Next, DOSCO argues that, because it negotiates selling prices on an actual weight basis, the “commercial reality” is that “the theoretical weight stated on the invo ice [is] presented solely for the customer’s purpose.” Pl.’s Br. at 29. In response to a similar point raised by DOSCO in its case brief, Commerce originall y argued that “the record demonstrate[s] that such information is not readily available.” IDM at 35. The Gove rnment, too, responds that“DOSCO did not cite to any record evidence, other than its own statements,” in support of its cl aim “that the theoretical actual weight was more reasonable than the theo retical weight used on the invoices.” Def.’s Br. at 27 (citation omitted). DOSCO takes issue with th e Government’s response, arguing that it

19 DOSCO similarly argued that Commerce has, in past instances, “converted a respondent’s U.S. sales from the basis on which the sales were ma de.” DOSCO’s Case Br. at 30 (internal quotation and citation omitted). While Plaintiffs are able to provide several examples of this behavior, they fall short of showing conclusively that Commerce, in certain cases, is compelled to convert a respondent’s U.S. sales. By DOSCO’s own ar gument, Commerce has no preference for either actual or theoretical wei ghts. Id. at 33. Thus, Plaintiffs sh ow at most that Commerce may, not that it must, convert DOSCO’s invoiced theoreticalweights to actual weights for the purpose of calculating AD marginsConsol. Court No. 19-00104 Page 39 PUBLIC VERSION provided “narrative explanations in questionnaire responses, which are certified as accurate by company officials, [and which] constitute record evidence.” Pls. Reply at 14. By disregarding such evidence, DOSCO seems to contend, Commerce failed to fulfill its obligation to discuss all arguments made by interested parties involving “i ssues material to the agency’s determination.” See Itochu Bldg. Products, 40 CIT __, __,163 F. Supp. 3d 1330, 1337 (2016). Commerce, however, is not required to address every piece of evidence submitted by participating parties, and its determinations ma y be found to be supported by substantial evidence despite the possibility that two inconsistent conclusions may be drawn from the same record. Aluminum Extrusions Fair Trade Comm. v. United States, 36 CIT 1370, 1373 (2012). For this reason, DOSCO’s claim is unavailing. As discussed above, the simple fact that DOSCO transacted with clients on a theoretical weight basis is sufficient to constitute substantial evidence. That DOSCO’s narrative explanations suggest a differentconclusion does not detract from the weight of the former evidence. Moreover, as ment ioned previously, Commerce is entitled to a presumption that it has, “absent a showing to the contrary, considered all of the record evidence.” Jacobi Carbons, 422 F. Supp. 3d at 1325 n.10 (citations omitted). Neither Commerce’s nor the Government’s statements demonstrate that Co mmerce affirmatively ignored DOSCO’s proffered narrative evidence. Indeed, the Government assert s that Commerce was in fact aware that DOSCO provided its “own statements” as evidence, ye t nonetheless reached a different conclusion, suggesting that Commerce considered, but was un convinced by, said evidence. Def.’s Br. at 27.

20

20 The Government raises some issues to which Plaintiffs provide no reply. For instance, the Government notes that “DOSCO uses theoretica l weight in its normalbooks and records” and argues that it would be “highly unusual [for] DOSCO to use such a method in its bookkeeping if, as it alleges, that method led to distortion.” Def. ’s Br. at 28. DOSCO, in its reply brief, skirt thisConsol. Court No. 19-00104 Page 40 PUBLIC VERSION In similar fashion, DOSCO challenges the Government’s contention that “DOSCO fails to identify the precise nature of the distortion that purportedly results from the use of theoretical weight.” Def.’s Br. at 28. DOSCO argues that C ommerce overlooks the “specific mathematical distortions that Plaintiff demonstrated to the agency using real examples.” Pl.’s Reply at 15. Commerce indeed recognized that DOSCO provided suchan analysis as part of its evidence, since the Government is able to cite to and recognize th e relevant portions of DOSCO’s Case Brief. See Def.’s Br. at 28. That Commerce nonetheless f ound that evidence uncompelling when making its final determination is not dispos itive of a failure to meet the substantial evidence burden. Rather, it merely points to a disagreement between the parties as to the meaning of what constitutes the “precise nature” of an alleged distortion. Id. F or this reason, the court finds that Commerce responded to all material issues in determining to use theoretical weights. In light of the above, the court sustains Commerce’s determination to use converted theoretical weights rather than actual wei ghts in the calculation of DOSCO’s AD duties. IV. Commerce’s CEP Offset Determin ation Is Reasonable and Supported by Substantial Evidence. Plaintiffs contend that “DOSCO performed signi ficantly more selling activities to support its sales to home market customers than to support it s sales to its U.S. affili ate . . . both in terms of number of selling activities and the intensity of the selling activities performed” and therefore deserved a CEP offset from Commerce for havi ng home marketing that wa s more meaningfully developed than its foreign marketing. Pl.’s Br. at 3, 34. The term “marketi ng stage” is not defined by statute. Rather, Commerce’s regulations provid e that, “The Secretary will determine that sales are made at different [LOTs] if they are made at different marketing stages. Substantial differences

issue, contending only that it provided evidence of “specific mathematical distortions” that, it alleges, Commerce overlooked. Pl.’s Reply at 15.Consol. Court No. 19-00104 Page 41 PUBLIC VERSION in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stage of marke ting.” See 19 C.F.R. § 351.412(c)(2). 21 That is, the regulation requires there to exist a difference in LOTs before differences in marketing stages may be found. However, a difference in LOTs may not, in and of itself, be enough to prove that differences in marketing stages exist. Id. Conversely, neithe r will common sales activity across LOTs necessarily preclude a findi ng that an exporter’s home market sa les were at a diffe rent stage than the exporter’s foreign market sales. Id. The party seeking a CEP offset ultimately bears the burden of demonstrating substantial differences in sel ling activities across the LOTs. See also 19 C.F.R. § 351.401(b)(1). The court is unpersuaded by Plaintiffs’ arguments and finds that Commerce reasonably concluded, based on the re cord evidence, that the differences in LOTs -- and therefore, in marketing activities -- was not substantial enough to warrant a CEP offset. A. DOSCO’s Arguments Are Not New, and the Same Reasoning that Supported the Court’s Decision in Dong-A Steel Also Applies Here. DOSCO argues that it engaged in three times as many selling activities at home than abroad (in other words, that its HM LOT was significantly greater than its CEP LOT). Pl.’s Br. at 35. To demonstrate this, DOSCO provided Commerce w ith data on its marketing activities, which Commerce grouped into four cat egories spanning sales and marketing, freight and delivery, inventory maintenance and warehousing, and warranty and technical support. IDM at 38; see also Pl.’s Br. at 35. Each category in tu rn consisted of specific activities: order input and processing, for example, constituted one activity within sales and marketing. IDM at 38. Within each

21 Further, 19 C.F.R. § 351.412(c)(1) pr ovides that LOTS will be based on: (i) In the case of export price, the starting price; (ii) In the case of constructed export pri ce, the starting price, as adjusted under section 772(d) of the [Tariff] Act; and (iii) In the case of normal value, th e starting price or constructed value.Consol. Court No. 19-00104 Page 42 PUBLIC VERSION category, DOSCO summed up the number of acti vities corresponding to that category and organized the activities by intensity (high, me dium, or low). Pl.’s Br. at 35. Among these activities, DOSCO documented that at the home market, it engaged in [[ ]] “high” intensity, [[ ]] “medium” intensity, and [[ ]] “low” intens ity sales and marketing activities, whereas it performed [[ ]] “high” and [[ ]] “low” intensity activity at the CEP LOT within the same category. Id. In total, under DOSCO’s reported figures, the company performed [[ ]] activities at the HM LOT of varying intensities, but [[ ]] at the CEP LOT, giving rise to the three-times diffe rence in LOT activity. Id. Furthermore, of the four categories of sales activities, DOSCO asserts that it engaged in three at the HM LOT. Id. In contrast, DOSCO reports that it engaged in only two categories of sales activities at the CEP LOT. Id. These arguments mirror claims raised by DOS CO in the earlier case, Dong-A Steel, in which, based on virtually the same facts, the co urt held that “Commerce acted reasonably when it determined that the record did not support” gran ting a CEP offset adjustment. 337 F. Supp. 3d at 1373–76. Specifically, the court held that, ev en though “DOSCO reported additional selling activities: sales forecasting, strategic/economic planning, personnel training/exchange, advertising, inventory maintenance, sales/marke ting support, and market research in the home market . . . [Commerce reasonably found that] these activities were not substantially different from those performed with respect to DOSCO’s U.S. sales.” Dong-A Steel, 337 F. Supp. 3d at 1375. As in the prior Dong-A Steel case, DOSCO once more reported additional sale s activity at the HM LOT, including “annual sales forecasting, annual strategic/economic planning, training of new employees, using stock ledgers and brochures to advertise and promote sales, monitoring raw material prices and exchange rate trends, and making or der sheets.” IDM at 39. And once again, Commerce “acknowledge[d] that the selling functi ons performed for home market customers mayConsol. Court No. 19-00104 Page 43 PUBLIC VERSION have entailed additional activities, [but] disagree[d] that these activities were substantial or so significant that they constitute a different marketing stage.” Id. DOSCO argues specifically that, among other flaws in its reasoning, Commerce “attempted to dismiss” significant pieces of the evidentiar y record when reaching its conclusion that a CEP offset was not warranted, especially as it pert ained to inventory management. Pl.’s Br. at 37. Under DOSCO’s view, the record evidence de monstrates that DOSCO expended significant resources on inventory maintenance activities only at the home market LOT. Id. By contrast, Commerce found that, based on th e record evidence, “DOSCO fa iled to demonstrate that maintaining home market inventory required si gnificant resources . . . .” IDM at 41. As noted, Commerce is entitled to a presumption that it has considered all of the record evidence, absent a showing to the contrary.” Jacobi Carbons AB, 422 F. Supp. 3d at 1325 n.10 (citations omitted). Here, in fact, DOSCO readily admits that Comm erce had considered the evidence by virtue of “attempting to dismiss” it. Pl.’s Br. at 37. At this point, then, the interpretation of the record evidence becomes a matter of disagreement be tween DOSCO and Commerce. This disagreement persisted in this litig ation. For instance, in responding to the court’s questions the Government reaffirmed its position that: Commerce found that the company’s [DOSCO’s ] review of its inventory (including the use of stock ledgers) and creation of ho me market order sheets appear to be basic administrative functi ons that involved little actual selling activity, and this evidence does not support DOSCO’s cl aim that the home market inventory maintenance activities were extensive. Def.’s Resp. to the Court’s Questions at 11 (citations omitted). The court may find that substantial eviden ce supports Commerce’s findings despite the possibility that two inconsistent conclusions may be drawn from the record. Aluminum Extrusions Fair Trade Comm, 36 CIT at 1373. Commerce acted r easonably in finding DOSCO’s evidence toConsol. Court No. 19-00104 Page 44 PUBLIC VERSION be uncompelling. As evidence of the cost of ma intaining a warehouse to store inventory, DOSCO referred to DOSCO’s Section B Response and accomp anying exhibits. Pl.’s Br. at 37. Exhibit B15, showing “inventory carrying co sts,” simply provides for the “calculation of the inventory carrying period,” which represents the averag e duration for which a business holds onto its inventory. Letter from DOSCO to Sec’y of Commerce, re: DOS CO’s Sec. B–D Questionnaire Resps. at B-36–B-37; Exh. B-15 (March 12, 2018), C.R. 25–35, P.R. 56–61. The inventory carrying period is estimated from averaged sales and inventory amounts. Id. While Exhibit B-15 indeed contains the data on DOSCO’s sales and inventory values measured monthly and quarterly, it does not provision explicit data on the actual costs associated w ith maintaining the inventory storage. Id. at Exh. B-15. Rather, DOSCO’s [[ ]] inventory carrying period for HWR must be scaled by an “applicable short term interest rate” to estimate the inventory carrying costs, or the costs associated with maintaining the inventor y balance. Id. at B-36–B-37; Exh. B-15. Faced with this approach to inventory carrying cost estimate s, the court affords “tremendous deference” to determinations drawn from Comm erce’s technical expertise, including determinations of definitions and appropriate methodologies. See F ujitsu Gen., 88 F.3d at 1039. Under such a view, it was reasonable for Commerce to conclude based on substantial evidence that “DOSCO failed to demonstrate that maintaining home market inventor y required significant resources or indeed, any resources beyond placing products in its own storag e area at the factory and then removing them once it sold the products.” See Def.’s Br. at 32; Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d at 1335 (quotation omitted). Further, even assuming the validity of DOSCO’s proffered methodology and evidence for the calculation of the inventory carrying costs, Commerce is still entitled to draw its own conclusions over what cons titutes a sufficiently “significant” difference in LOTs so as to merit a CEP offset. See 19 C. F.R. § 351.412(c)(2) (“Substantial difference . . . areConsol. Court No. 19-00104 Page 45 PUBLIC VERSION a necessary, but not sufficient, c ondition”). This being the case, it was reasonable for Commerce to determine, as it did, that DOSCO failed to meet its evidentiary burden onthe inventory aspect. Beyond inventory management, similar disput es arise between DOSCO’s and Commerce’s interpretation of the record. For instance, Plaintiffs note that DOS CO had only [[ ]] sales personnel dedicated to the U.S. market but had [[ ]] salespersons and staff servicing the home market. Pl.’s Br. at 36. The Gove rnment argues that Commerce acknowledged the difference in the sizes of the respective sales forc es, but based on the record evidence determined that the HM staff’s activities -- consisting primarily of producing an annu al business plan and a sales forecasting report -- did not “pertain[] exclusively to the home market.” Def.’s Br. at 32 (quoting IDM at 40). Rather, under Commer ce’s view, the work produced by what DOSCO pointed to as regional-specific sta ff in fact related to “high level annual sales strategies” that guided and impacted both the home and CEP markets. Id. As for the other evidence raised by DOSCO to demonstrate the difference between its HM and CEP LOTS -- for example the “education system” DOSCO set up to train salespeople, th e cultivation of regi onal clientele and the development of regional research -- Commerce reas onably determined either that the evidence was insufficient to reach DOSCO’s desired conclu sion, IDM at 40, or else was overrepresented by DOSCO, IDM at 41. 22 In short, Commerce did not find the reco rd to be deficient, merely that DOSCO’s reasoning -- based on the same evidence -- was uncompelling.

22 Similarly, DOSCO’s contention th at “Commerce never requested any additional information or clarifications regarding DOSCO’s CEP offsetclaim in any supplemental questionnaire or otherwise indicated that any deficiency existed in the record regarding this issue” is misplaced and lacks muster. Pl.’s Reply Br. at 18. The burden falls to the party seeking the CEP offset to provide the requisite evidence that would allow Commerce to determine that a CEP offset adjustment is warranted. See, e.g., Hyundai II, 365 F. Supp. 3d at 1297; 19 C.F.R. § 351.401(b). That Commerce did not request any ad ditional information beyond wh at was provided by DOSCO does not discredit the validity of the conclusion drawn from that evidence. Furthermore, Commerce had no obligation under 19 U.S.C. § 1677m(d) to work with DOSCO to correct for “deficiencies”Consol. Court No. 19-00104 Page 46 PUBLIC VERSION For these reasons, the court affirms Commerce’ s determination with respect to the denial of the CEP offset claim. V. Commerce’s Adjustment of Reported Co sts Is Supported by Substantial Record Evidence. Following a comment submitted by petitioners in response to the Preliminary Results, Commerce updated the Final Results to reflect an additional adjustment to the calculation of DOSCO’s AD margin, by compensating for the f act that “DOSCO has reported significantly different [HRC input] costs for similar CONNUMs. ” IDM at 42 (discussing “cost differences unrelated to defined physical characteristics”). Specifically, Commerce “adjusted the reported CONNUMs that are identical in al l of Commerce’s physical charac teristics except for painting . . . to reflect the same HRC cost.” IDM at 4 2. DOSCO contests that the adjustment was unreasonable and unsupported by substantial evidence, since, as DOSCO asserts, the decision lacked quantitative support and ran afoul of Commerce’s statut ory obligations to eliminate distortions in its calculations wherever possible. Pl.’s Br. at 39. A. Basis for the Adjustment At the start of every investigation, Commerce defines the key physical characteristics for the product under investigation. The characteristic s represent the elements that “define unique products, i.e., the CONNUMs, for sales comparis on purposes.” IDM at 43. In the case at hand, Commerce identified the key characteristics of HWR to be the “steel input type, quality, metal coating, painting, perimeter, wall thickness, sc arfing, and shape.” Id. Differences among each product’s reported costs “should reflect meaningful differences attributable to these different

in the record, since as discussed above, it does not appear that deficien cies existed in the first place. See Pl.’s Reply Br. at 18. Rather, the fundame ntal difference in conc lusions reached by DOSCO and Commerce derived not from any shortcomings in the data, but rather fr om differing yet equally reasonable interpretations of the evidence.Consol. Court No. 19-00104 Page 47 PUBLIC VERSION physical characteristics.” Id. (citations omitted) . Here, however, Commerce found that “the large fluctuation in costs between [DOSCO’s] CO NNUMs cannot be explained by the physical characteristics of those CONNUMs. Rather, the differences are linked to production time and quantities, and trial runs in some instances.” Id . To correct for the “arbitrary cost differences between nearly identical CONNUMs which are i ndependent of the physic al characteristics,” Commerce saw fit to apply an additional adjustment to DOSCO’s reported cost figures. Id. at 44. DOSCO argues two points. DOSCO contends fi rst, that Commerce’s “determination was devoid of any quantitative analys is,” and second, that “Commerc e’s determination undermined the statutorily required difference-in-merchandise (“DIFMER”) adjustment.” Pl.’s Br. at 39–40. The Government contends that DOSCO’s two claims lack merit while Commerce’s decision is supported by substantial evidence. Id. 23 B. Commerce’s Determination Is Supported by Substantial Evidence. Firstly, DOSCO claims that Commerce erred by not providing quantitative analysis to support its determination to adjust the reported raw material costs. Pl.’s Br. at 39. DOSCO itself asserts that there existed a cost variation of [[]] percent between two given CONNUM pairs, which DOSCO holds out to be so small as to be negligible. Id. at 40. However, as DOSCO correctly argued, Commerce has an obligation to be as accurate as possible in the computation of

23 The Government, in a one-sentence assertion, argu es that DOSCO has waived its right to raise either argument. Def.’s Br. at 35 (citi ng Sandvik Steel Co. v. United States, 164 F.3d 596, 599 (Fed. Cir. 1998)). Though the Government does not directly say so, it effectively argues that DOSCO failed to exhaust administrative remedies. Failure of exhaustion is simply not the case here. See Timken Co. v. United States, 26 CIT 434, 460, 201 F. Supp. 2d 1316, 1340–41 (2002). DOSCO successfully points to several occasions where it advanced its challenges, and where Commerce incorporated those conc erns through its responses. Se e DOSCO’s Resp. to Questions for Oral Arg. at 18 (citing DOSCO’s Rebuttal Br. at 17–19); IDM at 42 (discussing the points raised in DOSCO’s Rebuttal Brief, including the si ze of some of the cost differences being so small as to “require no explan ation” and “differences in pr oduction time and quantity,” among others).Consol. Court No. 19-00104 Page 48 PUBLIC VERSION AD margins. See Pl.’s Br. at 25 (citing Rhone Poul enc, 899 F.2d at 1191). In the interest of maximizing accuracy, even a [[ ]] per cent variation should not be overlooked. 24 Moreover, the Government accurately and compellingly point s out that DOSCO provi des no authority or statutory basis explicitlyrequiring Commerce to jus tify a finding of cost differences with a robust quantitative analysis, or indeed any quantitative anal ysis at all. Def.’s Br. at 35. The Government also notes that Commerce’s determinations of a pplicable adjustments (as evidenced here with regard to cost adjustments) are consistent wi th practices previously sustained by the courts, including a holding that “Commerce’s methodology is ‘presumptively correct ’. . . [insofar as plaintiff] has not shown that Comm erce lacked authority to adjust costs based on differences in physical characteristics.” Id. at 36 (quoting Thai Plastic Bags Industries Co. v. United States, 746 F.3d 1358, 1368 (Fed. Cir. 2014)). Secondly, DOSCO argues that, under the prov isions of 19 U.S.C. § 1677b(a)(6)(C)(ii): Commerce is required to increase or decrea se normal value -- as the case may be - - to account for . . . the DIFMER adjustme nt to the net selling prices in the comparison market, . . . to account for the differences in the physical characteristics of the merchandise sold in the United St ates and the comparison market, and is calculated as the difference between th e variable costs of manufacturing (“VCOM”) of the two similar CONNUMs. Pl.’s Br. at 40 (citing IDM at 43). “If the VCOM of the U.S. model is lower than the VCOM of the similar comparison market model, normal valu e is reduced by the difference in those VCOMs.” Id. Under DOSCO’s view, “by smoothing the costs s uch that the HRC costs were the same for CONNUMs that are identical but for whether the finished product is painted . . . Commerce

24 Plaintiffs posit that “Commerce failed to arti culate the circumstances under which a cost variation is ‘significant,’ failed to explain what is the signifi cance threshold above which cost variations rise to the level of a distortion that must be corrected, and, most importantly, failed to explain why the cost variations between DOSCO’s painted and non-painted products were so ‘significant’ that an adjustment was warranted.” Pl.’s Reply at 20. However, Plaintiffs present no alternatives for defining si gnificance, beyond asserting that Commerce failed to do so.Consol. Court No. 19-00104 Page 49 PUBLIC VERSION introduced rather than eliminated distortions into the calculations.” 25 Id. In this manner, DOSCO argues that the adjustment imposed by Commerce actually violated the underlying purpose of the DIFMER adjustment -- “to capture physical diffe rences in merchandise.” Pl.’s Reply at 20 (quoting IDM at 36); see also 19 C.F.R. § 351.4 11(b). However, DOSCO does not provide any evidence of the purported distorti ons resulting from Co mmerce’s determination. The Government, in response, asserts that Commerce’ s adjustments “ensure that differe nces in cost were related only to differences in physical characteristics (here, pa inting),” and therefore fall squarely within the defined purpose of the DIFMER adjustment. Def.’s Br. at 36. Because DOSCO has not demonstrated the scope or extent of the a lleged distortion and 19 C.F.R. § 351.411(b) gives Commerce the discretion to adjustfor variations in “costs associated with the physical differences,” the court sustains Commerce’s adjustments.
CONCLUSION For the reasons discussed above, the court sustains (1) Commer ce’s use of DOSCO’s theoretical weights for the calculation of DOSC O’s dumping margin; (2) Commerce’s denial of DOSCO’s CEP offset claim; and (3) Commerce’s decision to adjust DOSCO’s reported raw material costs as supported by substantial evidence and in accordance with law. However, because the court finds: (1) Commerce’s PMS determinati on to be unsupported by substantial evidence and not in accordance with law; and (2) Commerce’ s PMS adjustment to be improper under the provisions of the TPEA, the cour t remands to Commerce its PMS determination and adjustment

25 As DOSCO describes it, smoothing th e costs eliminated the “true variations in the VCOMs” that would have otherwise beencaptured in the selling prices. Pl.’s Br. at 40 . Without adjusting the sales prices commensurately, DOSCO purports that Commerce effectively introduced a distortion into their margin calculations. Id.Consol. Court No. 19-00104 Page 50 PUBLIC VERSION and calculation of dumping margin s consistent with this opinion. 26 Commerce shall file with the court and provide to the parties its remand results within 90 days of th e date of this order; thereafter the parties shall have 30 days to submit briefs addressing the revised fina l determination with the court, and the parties shall have 30 days thereafter to file reply briefs with the court.
SO ORDERED. /s/ Gary S. Katzmann Judge Dated: September 29, 2020 New York, New York

26 As appropriate, Commerce should also recalculate the AD margin applied to Kukje in line with this opinion.