United States Court of Appeals 

for the Federal Circuit ______________________ 

MEYER CORPORATION, U.S.,

Plaintiff-Appellant

v.

UNITED STATES,

Defendant-Appellee

______________________ 

2021-1932

______________________ 

Appeal from the United States Court of International 

Trade in Nos. 1:13-cv-00154-TJA, 1:13-cv-00181-TJA, 1:13-

cv-00182-TJA, 1:13-cv-00226-TJA, 1:13-cv-00227-TJA, 

1:13-cv-00258-TJA, 1:13-cv-00259-TJA, 1:13-cv-00266-

TJA, 1:13-cv-00322-TJA, 1:13-cv-00323-TJA, 1:13-cv00405-TJA, 1:14-cv-00118-TJA, 1:14-cv-00277-TJA, 1:15-

cv-00018-TJA, 1:15-cv-00019-TJA, 1:15-cv-00091-TJA, 

1:15-cv-00092-TJA, 1:15-cv-00191-TJA, 1:15-cv-00332-

TJA, 1:16-cv-00112-TJA, 1:16-cv-00271-TJA, 1:17-cv00186-TJA, Senior Judge Thomas J. Aquilino, Jr.

______________________ 

Decided: August 11, 2022

______________________ 

JOHN MICHAEL PETERSON, Neville Peterson LLP, New 

York, NY, argued for plaintiff-appellant. Also represented 

by PATRICK KLEIN; JOHN DONOHUE, Philadelphia, PA; 

RICHARD F. O'NEILL, Seattle, WA.

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2 MEYER CORPORATION, U.S. v. US

 BEVERLY A. FARRELL, International Trade Field Office, 

United States Department of Justice, New York, NY, argued for defendant-appellee. Also represented by BRIAN M.

BOYNTON, PATRICIA M. MCCARTHY, JUSTIN REINHART 

MILLER; PAULA S. SMITH, Office of the Assistant Chief 

Counsel, Bureau of Customs and Border Protection, United 

States Department of Homeland Security, New York, NY. 

 ______________________ 

Before MOORE, Chief Judge, CLEVENGER and HUGHES,

Circuit Judges.

HUGHES, Circuit Judge. 

This appeal involves two issues related to duties assessed on cookware that Meyer Corporation, U.S. imported. First, Meyer sought duty-free treatment for 

cookware manufactured in Thailand. Thailand is a beneficiary developing country under the Generalized System of 

Preferences, so certain products manufactured there with

35% or more Thai inputs are eligible for duty-free treatment. Materials imported to Thailand from other countries 

must undergo a “double substantial transformation” in 

Thailand to count toward the 35%. The United States 

Court of International Trade ruled that Meyer’s pots and 

pans manufactured in Thailand are not eligible for dutyfree treatment because they were made of steel discs from 

China that underwent only one substantial transformation. The Court of International Trade did not clearly 

err in finding only one substantial transformation, so we 

affirm.

Second, Meyer sought to establish the dutiable value of 

its cookware using the “first-sale” price from affiliated 

manufacturers to affiliated distributors. Relying on language from our decision in Nissho Iwai American Corp. v. 

United States, 982 F.2d 505 (Fed. Cir. 1992), the Court of 

International Trade required Meyer to prove that these 

first sales were not only at arm’s length but were also 

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MEYER CORPORATION, U.S. v. US 3

unaffected by China’s status as a nonmarket economy. 

Finding that Meyer did not prove the absence of “nonmarket influences” for its cookware imported from China or 

produced with Chinese inputs, the trial court did not allow 

Meyer to rely on its first-sale prices. The trial court misinterpreted Nissho Iwai to impose a requirement beyond 

what the statute and regulations demand, so we vacate and 

remand for the trial court to reconsider whether Meyer 

may rely on its first-sale prices. 

BACKGROUND

This appeal concerns duties that U.S. Customs and 

Border Protection assessed on cookware imported by 

Meyer Corporation, U.S. (Meyer). Some cookware was 

manufactured in Thailand, and some was manufactured in 

China.

Each piece of cookware manufactured in Thailand began as a steel disc imported from China. In Thailand, the 

manufacturer used a deep drawing process to produce 

“shells” having the rough shape and size of the finished 

cookware. Then, the manufacturer turned the shells into 

finished cookware in a series of steps including trimming 

the edges, removing grease, polishing, flattening the bottom, wrapping in plastic, marking with the product’s specifications, punching holes for the handle, and attaching the 

handle. 

The manufacturers in Thailand and China sold finished cookware to distributors in Macau and Hong Kong, 

respectively, and then to the U.S. importer, Meyer. The 

manufacturers, distributors, and importer are all related, 

with common parent/shareholder Meyer International 

Holdings, Ltd. 

Meyer requested duty-free treatment for the cookware 

produced in Thailand, based on Thailand’s status as a beneficiary developing country under the Generalized System 

of Preferences. Meyer Corp., U.S. v. United States, No. 13-

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4 MEYER CORPORATION, U.S. v. US

00154, 2021 WL 777788, at *3 (Ct. Int’l Trade Mar. 1, 2021) 

(Decision). Meyer also asked Customs to value its cookware

based on the first-sale price that its affiliated distributors

paid to the manufacturers. Id. Following an audit, Customs 

ultimately denied duty-free treatment. Id. at *4; Summons 

at 2, Meyer Corp., U.S. v. United States, No. 13-00154 (Ct. 

Int’l Trade Apr. 16, 2013), ECF No. 1. Customs also assessed duties based on the second-sale price that Meyer 

paid to its distributors, rejecting Meyer’s request to use the 

first-sale price. Decision at *4; Summons at 2, Meyer, No. 

13-00154. 

Meyer protested Customs’ decisions and then appealed 

to the Court of International Trade. Decision at *4. Following a bench trial, the trial court ruled that Meyer failed to 

prove it was entitled to duty-free treatment for the 

cookware manufactured in Thailand. Id. at *50. It explained that under Torrington Co. v. United States, 764 

F.2d 1563, 1567 (Fed. Cir. 1985), raw materials from nonbeneficiary developing countries must undergo a “double 

substantial transformation” in the beneficiary developing 

country to count toward duty-free treatment. Decision at 

*3, *36–37. It found that Meyer had shown that the manufacturer substantially transformed steel discs once, “when 

a flat blank [wa]s deep drawn into a shell that [wa]s an 

unfinished pot or pan.” Id. at *37. But, in the trial court’s 

view, the manufacturer did not substantially transform the 

input a second time by converting the shell into a finished 

pot or pan. Id. Further, the trial court found that Meyer 

failed to show that an unfinished shell is a “distinct article 

of commerce” that is “readily susceptible to trade,” as Torrington also requires. Id. at *38 (citing Torrington, 764 

F.2d at 1570). Having found that Meyer failed to satisfy the 

requirements of Torrington, the trial court concluded that 

the steel discs could not count toward the value added in 

Thailand, and thus Meyer failed to prove its cookware was 

eligible for duty-free treatment. Id. 

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MEYER CORPORATION, U.S. v. US 5

The trial court also affirmed Customs’ decision “to deny 

‘first sale’ treatment.” Judgment, Meyer Corp., U.S. v. 

United States, No. 13-00154 (Ct. Int’l Trade Mar. 1, 2021), 

ECF No. 187. It held that, under our decision in Nissho 

Iwai, an importer wishing to rely on the first-sale price

bears the burden to show that the first sales were “(1) bona 

fide sales that are (2) clearly destined for the United States 

(3) transacted at arm’s length and (4) absent any distortive 

nonmarket influences.” Decision at *1, *5 (citing Nissho 

Iwai Am. Corp. v. United States, 982 F.2d 505 (Fed. Cir. 

1992)). The trial court suggested that Meyer could prove 

the absence of nonmarket influences with “the factors used 

by entities located [in China] to obtain a duty rate other 

than the country-wide rate” in antidumping proceedings. 

Id. at *2. For both Meyer’s Chinese-manufactured products 

and its Thai-manufactured products made in part from 

Chinese inputs, the trial court found that Meyer had not 

provided adequate information to prove that its first sales 

met the last requirement: that they were free of “marketdistortive influence, either with respect to the plaintiff directly or the provision of inputs generally.” Id. at *6, *51.

It thus concluded that Meyer could not rely on the first-sale 

prices. Id. at *50–51. 

Meyer appeals the trial court’s determinations that its 

products manufactured in Thailand were not eligible for 

duty-free treatment and that it could not rely on first-sale 

prices. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

ANALYSIS

“We review the Court of International Trade’s conclusions of law de novo.” Ford Motor Co. v. United States, 286 

F.3d 1335, 1340 (Fed. Cir. 2002). “Following a trial, we review the court’s findings of fact for clear error.” Id.

I 

The Generalized System of Preferences statute “represents the United States’ participation in a multinational 

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6 MEYER CORPORATION, U.S. v. US

effort to encourage industrialization in lesser developed 

countries through international trade.” Torrington, 764 

F.2d at 1565. Under the Act, the President “prepare[s] a 

list of beneficiary developing countries” and designates eligible products from those countries. Id. (citing 19 U.S.C. 

§ 2462). “A designated product imported from a listed country may enter the United States duty free.” Id. (citing 19 

U.S.C. § 2461).

To be eligible, the sum of “the cost or value of the materials produced in the beneficiary developing country” and 

“the direct costs of processing operations performed in such 

beneficiary developing country” must be at least 35% of the 

appraised value of the article. 19 U.S.C. § 2463(a)(2)(A)(ii). 

Regulations define materials “produced in the beneficiary developing country” to include materials imported

from other countries but “[s]ubstantially transformed in 

the beneficiary developing country into a new and different 

article of commerce.” 19 C.F.R. § 10.177(a)(2). 

In Torrington, we interpreted the statute and regulation to require a “dual transformation.” 764 F.2d at 

1567–68. A raw material from another country must be 

substantially transformed once to become an intermediate 

article “produced in the beneficiary developing country” 

under 19 C.F.R. § 10.177(a), and then a second time to be 

considered an input into the final product—rather than the 

final product itself—under 19 U.S.C. § 2463(a)(2)(A)(ii)(I).

Torrington, 764 F.2d at 1567–68.

The intermediate article cannot be the output of any 

arbitrary step in the manufacturing process. Instead, under 19 C.F.R. § 10.177(a), it must be an article “of commerce.” The “regulation imposes the requirement that the 

‘new and different’ product be commercially recognizable 

as a different article, i.e., that the ‘new and different’ article be readily susceptible of trade, and be an item that persons might well wish to buy and acquire for their own 

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MEYER CORPORATION, U.S. v. US 7

purposes of consumption or production.” Torrington, 764 

F.2d at 1570.

To find a “substantial transformation,” we consider 

whether “an article emerges from a manufacturing process 

with a name, character, or use which differs from those of 

the original material subjected to the process.” Id. at 1568. 

“The name element . . . has received less weight and is considered ‘the weakest evidence of substantial transformation.’” Koru N. Am. v. United States, 12 C.I.T. 1120, 

1126 (1988) (citation omitted). 

The trial court found “no change in character” from a 

shell to a finished pot or pan. Decision at *37. Analyzing 

the manufacturing steps after deep drawing, the trial court 

noted “that there [wa]s no annealing or galvanizing performed or any change in chemical composition or mechanical properties.” Id. (citing Ferrostaal Metals v. United 

States, 11 C.I.T. 470 (1987)). “Nor was there any significant 

change in shape or form” because “the drawing process 

g[ave] the article its final form, not the subsequent finishing operations.” Id. (citing Nat’l Hand Tool Corp. v. United 

States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 

1993) (per curiam)). 

Meyer argues that those specific types of changes are 

not required; the change in character here is from “producers’ goods” to “consumers’ goods” as discussed in Torrington, 764 F.2d at 1571, and Midwood Industries, Inc. v. 

United States, 64 Cust. Ct. 499, 507 (1970). But Meyer 

takes references to producers’ and consumers’ goods out of 

context. In Torrington and Midwood, the articles changed

from “producers’ goods” to “consumers’ good” because of 

substantial changes in shape, form, chemical properties, 

and mechanical properties. Torrington, 764 F.2d at 1571 

(citing Midwood, 64 Cust. Ct. at 504–07). For example, in 

Torrington, creating the consumers’ needles from the producers’ swages required changing the shape and form by 

cutting the swage to the right length, adding a hole, and 

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8 MEYER CORPORATION, U.S. v. US

sharpening the tip. Id. at 1566, 1571. It also involved 

changing the chemical and mechanical properties by hardening, tempering, and plating the needle. Id. Because of 

these changes, the court considered swages to be producers’ 

goods distinct from finished needles. 

Here, the trial court correctly focused its inquiry on 

manufacturing steps that changed the shape, form, chemical properties, and mechanical properties. It did not clearly 

err in finding no substantial change in character from the 

shells to the final product. 

The trial court also found “no change in use” because 

“the use of the [shells] [wa]s predetermined; they w[ould]

be finished and used as a specific pot or pan.” Decision

at *37 (citing Nat’l Hand Tool, 16 C.I.T. at 311–12). Meyer 

argues that the district court relied on the wrong test to 

identify a change in use—rather than consider whether 

each shell’s use is predetermined, the court should have 

considered whether a consumer can use a shell as a pot or 

pan. The shells have no handles, making them useless as 

pots and pans, so Meyer argues that adding a handle

changes the use. 

The trial court got the test right. In both Torrington

and National Hand Tool, the court considered whether the 

intermediate article was useful only for producing a specific finished product, not whether it was usable as the finished product. Compare Torrington, 764 F.2d at 1566 

(finding a change in use because although “the swage is 

useful solely in the production of sewing-machine needles 

with a predetermined blade diameter, . . . the resulting 

needle may vary in other respects (e.g., eye placement, eye 

size, and needle length)”), with Nat’l Hand Tool, 16 C.I.T. 

at 311 (finding no change in use because “[e]ach component 

was intended to be incorporated in a particular finished 

mechanics’ hand tool”). Applying this test, the trial court 

found, and Meyer does not now contest, that each shell was 

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MEYER CORPORATION, U.S. v. US 9

meant to be finished into a specific model of pot or pan. Decision at *37.

Although the record does suggest that the article underwent a change in name, that is not dispositive. Both 

parties called the intermediate article a “‘work in progress’ 

shell[],” id. at *42, *30–31, or just a “shell,” id. at *37. The 

finished product was a pot or pan. But it is unclear from 

the record whether “shell” is a convenient term adopted for 

this litigation or for Meyer’s internal use, or if instead it is 

a common term across the industry. Even so, this difference in name, the least important factor, is not enough to 

show clear error in the district court’s conclusion that there 

was no second substantial transformation. See Koru, 12 

C.I.T. at 1126.

The trial court did not clearly err in finding only one 

substantial transformation. We thus affirm the trial court’s 

denial of duty-free treatment for the cookware manufactured in Thailand. We need not reach Meyer’s argument 

that it satisfied the separate requirement that the shells be 

an article of commerce susceptible to sale.

II

Customs primarily uses the “transaction value” of imported merchandise as the dutiable value. 19 U.S.C. 

§ 1401a(a)(1). The transaction value “is the price actually 

paid or payable for the merchandise when sold for exportation to the United States,” plus specified additions. 

19 U.S.C. § 1401a(b)(1). 

To be viable as a basis for valuation, a transaction must 

meet the requirements of 19 U.S.C. § 1401a(b)(2), including, for transactions “between a related buyer and seller,” 

that either “an examination of the circumstances of the sale 

of the imported merchandise indicates that the relationship between such buyer and seller did not influence the 

price actually paid or payable” or “the transaction value 

. . . closely approximates” a test value. 19 U.S.C. 

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10 MEYER CORPORATION, U.S. v. US

§ 1401a(b)(2)(B). The corresponding regulation, 19 C.F.R. 

§ 152.103(l)(1), lists ways for Customs to find that the relationship between the buyer and seller did not influence the 

price, for example, by finding that “the price has been settled in a manner consistent with the normal pricing practices of the industry in question,” or that “the price is 

adequate to ensure recovery of all costs plus a profit which

is equivalent to the firm’s overall profit.”

In Nissho Iwai American Corp. v. United States, we addressed which price Customs should use in a multi-tiered 

import scheme in which all the entities are related—the 

first-sale price the distributor paid to the manufacturer, or 

the second-sale price the importer paid to the distributor. 

982 F.2d 505, 508–11 (Fed. Cir. 1992). “[O]nce it is determined that both the [first- and second-sale] price[s] are 

statutorily viable transaction values, the rule is straightforward: the manufacturer’s [first-sale] price, rather than 

the [distributor’s second-sale] price . . . , is used as the basis for determining transaction value.” Id. at 509. Our decision elaborated on the meaning of “statutorily viable”: 

“[t]he manufacturer’s price constitutes a viable transaction 

value when the goods are clearly destined for export to the 

United States and when the manufacturer and middleman 

deal with each other at arm’s length, in the absence of any 

non-market influences that affect the legitimacy of the 

sales price.” Id. 

Here, the trial court articulated four requirements for 

a viable transaction under Nissho Iwai, including that the 

sale be “(3) transacted at arm’s length and (4) absent any 

distortive nonmarket influences.” Decision at *1. The court 

noted that the fourth factor “has generally been neglected” 

but was relevant here because China “presumptively remains a non-market economy in this and other proceedings,” id. at *1, *6. The court placed the burden on Meyer 

to prove that the first sale met these requirements, including to prove “the absence of any market-distortive influences” arising in a nonmarket economy. Id. at *2, *5–6 

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MEYER CORPORATION, U.S. v. US 11

The trial court misinterpreted our decision in Nissho 

Iwai to require any party to show the absence of all “distortive nonmarket influences.” There is no basis in the statute 

for Customs or the court to consider the effects of a nonmarket economy on the transaction value. The statute requires only that “the relationship between [the] buyer and 

seller did not influence the price actually paid or payable.” 

19 U.S.C. § 1401a(b)(2)(B). This provision concerns effects

of the relationship between the buyer and seller, not effects

of government intervention, and especially not with government intervention that affects the industry as a whole.

Neither Nissho Iwai nor the government’s briefing identifies other statutes or regulations that could require Customs or the Court of International Trade to consider 

whether the goods were sold in a nonmarket economy or 

were otherwise affected by a nonmarket economy. 

When Congress wants to distinguish between market 

and nonmarket economies in the trade laws, it does so expressly. E.g., 19 U.S.C. §§ 1677b(c), 1671(f)(2), 1677f-1(f)(1) 

(providing special rules for nonmarket economy countries 

in antidumping and countervailing duty investigations). 

Congress has not provided for differing treatment in 

19 U.S.C. § 1401a. Further, the trade laws “must be interpreted to be consistent with [international] obligations, absent contrary indications in the statutory language or its 

legislative history.” Allegheny Ludlum Corp. v. United 

States, 367 F.3d 1339, 1348 (Fed. Cir. 2004) (alteration in 

original) (citation omitted). The General Agreement on 

Tariffs and Trade (GATT) requires that all Member States 

be treated equally unless a specific provision authorizes 

differing treatment. GATT at Art. 1, Oct. 30, 1947, 61 Stat. 

A-11, 55 U.N.T.S. 194. The GATT valuation agreement, on 

which § 1401a is based, does not distinguish between “market economy” and “nonmarket economy” countries and says

that valuations should be made “without distinction between sources of supply.” Agreement on Implementation of 

Article VII of the General Agreement on Tariffs and Trade 

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12 MEYER CORPORATION, U.S. v. US

1994 (Customs Valuation Agreement), 1868 U.N.T.S. 279 

(1994). The trial court’s reading of Nissho Iwai creates a 

risk that Customs will value goods from different countries 

unequally, even though neither the valuation code nor another specific provision authorizes differing treatment. 

With all this in mind, we read Nissho Iwai as merely 

restating the statutory requirements for a transaction 

value, rather than introducing a new requirement separate 

from the arm’s-length requirement. The decision lays out 

two requirements, both enumerated in the statute, and 

then elaborates on the second: 

The manufacturer’s price constitutes a viable 

transaction value when [1] the goods are clearly 

destined for export to the United States 

[§ 1401a(b)(1)] and [2] when the manufacturer and 

the middleman deal with each other at arm’s 

length [§ 1401a(b)(2)(B)], in the absence of any

non-market influences that affect the legitimacy of 

the sales price. 

982 F.2d at 509. In context, “nonmarket influences” just refers to influences growing out of the relationship of buyer 

and seller that distort the “price paid or payable,” which 

Customs must consider under 19 U.S.C. § 1401a(b)(2)(B). 

Because the Court of International Trade relied on its 

misreading of Nissho Iwai to reject Meyer’s first-sale price, 

we vacate and remand for the court to reconsider whether 

Meyer may rely on the first-sale price. We need not reach 

Meyer’s alternative argument that the court should have 

subjected Meyer’s second-sale price to the same nonmarket-influences requirement it imposed on the first-sale 

price. 

* * * 

For the reasons set forth above, the decision of the 

Court of International Trade is

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MEYER CORPORATION, U.S. v. US 13

AFFIRMED-IN-PART, VACATED-IN-PART, AND 

REMANDED

COSTS

No costs.

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