# United States **Court of Appeals**  **for the Federal Circuit**

______________________ MUELLER COMERCIAL DE MEXICO, S. DE R.L.

DE C.V. AND SOUTHLAND PIPE NIPPL ES CO., INC., Plaintiffs

- Appellants,

v.

UNITED STATES, Defendant

- Appellee,

AND

TMK IPSCO TUBULARS AND ALLIED TUBE AND COND UIT, Defendants

- Appellees,

AND

UNITED STATES STEEL CORPORATION, Defendant

- Appellee.

______________________

2013

- 1391

______________________ Appeal from the United States Court of International Trade in No. 11

- CV

- 0319, Judge Leo M. Gordon.

______________________
Decided: May 29, 2014

______________________MUELLER COMERCIAL DE MEXICO v. US 2

Y OHAI B AISBURD , White & Case LLP, of Washington, DC, argued for plaintiffs

- appellants. With him on the brief were D AVID E. B OND , J AY C. C AMPBELL and T ING

T ING K AO

.

D OUGLAS G. E DELSCHICK , Trial Attorney, Commercial Litigation Branch, Civil Division, United States Depar tment of Justice, of Washington, DC, argued for defendant

appellee United States. With him on the brief were S TUART F. D ELERY , Assistant Attorney General, J EANNE E. D AVIDSON , Director, and F RANKLIN E. W HITE , J R

. , Assistant Director. Of counsel was N ATHANIEL J. H ALVORSON , Attorney, Office of the Chief Counsel for Import Administration, United States Department of Commerce , of Washington, DC

.

R OGER B. S CHAGRIN , Schagrin Associates, of Washin gton, DC, argued for defendants

- appellees TMK I PSCO Tub u lars, et al. With him on the brief was J OHN W. B OHN

.

E LLEN J. S CHNEIDER , Skadden Arps, Slate, Meagher & Flom LLP, of Washington, DC, argued for defendant

appellee United States Steel Corporation. With h er on the brief were R OBERT L IGHTHIZER and J EFFREY D. G ERRISH . Of counsel were J AMES C. H ECHT and L UKE A. M EISNER

.

______________________
Before N EWMAN , D YK , and T ARANTO , Circuit Judges.MUELLER COMERCIAL DE MEXICO v. US 3

D YK , Circuit Judge.

Plaintiff s Mueller Comercial de Mexico, S. de R.L. de C.V., and Southland Pipe Nipples Company, Inc. 1 (colle ctively, “Mueller”) appeal from a decision of the Court of International Trade sustaining the United States D epartment of Commerce’s (“Commerce”) antidumping determination . We vacate and remand

. B ACKGROUND
The Tariff Act of 1930 (the “Act”) , as amended, pe rmits Co mmerce to levy antidumping duties on goods “sold in the United States at less than

. . . fair value.” 19 U.S.C. § 1673. A ntidumping duty orders are issued for imported merchandise that is sold in the United States below its fair value and materially inju res or threatens to injure a domestic industry. Id

. An antidumping duty reflects the amount by which the “normal value” of a product ( typically

, the home market price

— the price of the merchandise when sold for consumption in the expor ting country ) , 19 U. S.C. § 1677b(1), exceeds the “ export price ” of the merchandise. 19 U.S.C. §§ 1673, 1677(35)(A). This difference is called the dumping margin

. The imp osition of the antidumping duty , equal to the dumping margin, is intended to ensure that merchandise is not sold in the United States below its fair value.
Commerce periodically reviews and reassess es ant idumping duties imposed in earlier proceedings . 19 U.S.C. § 1675(a). On November 2, 1992, Commerce published an antidumping duty order on certain circular welded non

1 Southland Pipe Nipples Company, Inc. is Mueller’s importer

- of

- record for direct sales in the United States and is a wholly

- owned subsidiary of Mueller Indu stries, Inc.MUELLER COMERCIAL DE MEXICO v. US 4

alloy steel pipe from Mexico. On November 2, 2009, Commerce published a notice of opportunity to request an administrative review of the antidumping duty order

. Commerce received requests for adm inis tra tive review from appellant Mueller; Tuberia Nacional, S.A. de C.V. (“TUNA”) ; and Ternium Mexico, S.A. de C.V. (“Ternium”)

, and from defendant

- appellees Allied Tube and Conduit Corporation and TMK IPSCO Tubulars

. On December 23, 2009, Commerce initiated an ant idumping administrative review concerning the period spanning from November 1, 2008, to October 31, 2009

, issuing questionnaires to three mandatory respondents : (1) Mueller, an exporter, which purchased the majority of its subject merchandise from T UNA and Ternium

, (2) TUNA and (3) Ternium , both producers of subject me rchandise

. TUNA’s review was rescinded ( because there

were no direct shipments), and Ternium opted not to participate in its own margin calculation. As a result, Commerce drew an adve rse inference against Ternium pursuant to 19 U.S.C. § 1677e(b) , assigning an adverse facts available (“AFA”) dumping margin of 48.33 percent, “which is the highest calculated transaction

- specific margin from the most recently

- completed administrative review of this antidumping duty order in which a rate was calculated.” J .A. 63 (Preliminary Results)

. Ternium’s dumping margin is not at issue in this appeal

. For Commerce to calculate Mueller’s antidumping rate, it was required to determine the difference between the “normal value” of Mueller’s goods ( typically “home market” price) and the “export price” at which Mueller ’s goods were sold in the United States

. 19 U.S.C. §§ 1677(35)(A) , 1677b(a)

. The “normal value” is ordinarily the price at which the goods were first sold for consum ption in the exporting country

— in this case, in Mexico. Id

. § 1677b(a)(1)(B)(i). Here, Mueller had sufficient volume of home market sales such that they could be used toMUELLER COMERCIAL DE MEXICO v. US 5

calculate “normal value .” See id . § 1677b(a)(1)(B)(ii)(II)

. However, w here an exporter’s home market price is less than th e cost of production for the goods it sells

, Co mmerce “may” disregard the below cost sales to calculate “normal value

. ” Id. § 1677b(b)( 1). Therefore, Commerce must determine the cost of production of the subject merchandise. Id . § 1677b(b)(3). Such production costs are

no rmally “calculated based on the records of the exporter or producer of the merchandise, if such records are kept in accordance with the generally accepted accounting princ iples of the exporting country

. . . and reasonably reflect the costs associated with the production and sale of the merchandise.” Id . § 1677b (f) (1)(A). If the cost of produ ction is greater than the home market price, home market sales below production cost may be disre g arded in calc ulating the normal value

. 2 Id . § § 1677b(b)(1)(A); 1677b(b)(2)(C)

. A lthough Mueller fully cooperated with Commerce’s review, Mueller did not possess all of the production cost information necessary to calculate its antidumping ma rgin. See 19 U.S.C. § 1677b(b)(3). To calculate cost of production, Commerce requested data directly from Mueller’s two principal suppliers, TUNA and Ternium.
TUNA fully cooperated with the data requests, r e por ting cost of production on a product

- specific basis. Howe ver, Ternium did not “provide detailed product

- specific calcul ations that allocate[d] costs based on pro d uct d imensions. ” J.A. 47 ( Memorandum from Mark Flessner, Case Analyst, Dep’t of Commerce, to Richard Weible, Office Director, Dep’t of Commerce

, Certain Circular

2 Production cost data is also used to calculate “co nstructed value” in lieu of home market sales. 19 U.S.C. § 1677b(e).MUELLER COMERCIAL DE MEXICO v. US 6

Welded Non

- Alloy Steel Pipe from Mexico: Use of [A FA] for Final Results 2 (June 13, 2011) ) (“AFA Mem

. ”) ( inte rnal quotation marks omitted )

. Ternium stated that it did not provide the data because it was not “readily avail able .” As a result, Commerce did not have the data nece ssary to calculate margins that took into account cost differences associated with the different physical chara cteristics of the goods.

For its preliminary analysis, Commerce simply relied on the submitted data and calculated a weighted

- average dumping margin of 4.81 percent for Mue ller. But because Ternium did not submit necessary cost data before the time for a final determination

, in making the final calc ulations, Commerce used “facts otherwise available” to calculate Mueller’s margin under 19 U.S.C. § 1677e( a ) of the statute

. S pecifically, Commerce concluded that the production costs of the goods M ueller acquired from Ternium (data that was unavailable) were related to acquisition costs (data that was available). Commerce identified the three sales transactions between TUNA and Mueller made at the greatest discount to Mueller —where Mueller’s acquisition cost was the furthest below TUNA’s production cost

. Commerce then inferred that all of Ternium’s pipe that was sold to Mueller involved this discount for acquisition cost

. This enabled Commerce to calculate Ternium’s cost of production from Mueller’s cost of acquisition from Ternium. Although there were other sales transactions between TUNA and Mueller that were not discounted as significantly , C ommerce chose not to use tha t data. In its Final Results

, Commerce used data f rom the three transactions to calculate a new weighted

average dumping rate for Mueller of 19.81 percent.
On August 22, 2011, Mueller filed suit in the Court of International Trade (“Trade Court”) seeking to overturn Commerce’s Final Results, noting that Mueller had fully cooperated and all eging that Commerce’s application ofMUELLER COMERCIAL DE MEXICO v. US 7

“Ternium’s AFA to its calculation of the margin for Mueller, ” despite Mueller’s full cooperation with Co mmerce’s requests

, was improp er . J .A. 1 97

. Mueller a rgued that

, instead

, Commerce should have calculated production costs using the entire TUNA data set

. 3 The Trade Court found that Commerce’s application of facts available was reasonable , and sustained the Final R esults. Mueller appealed. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

D ISCUSSION

I
As discussed, Mueller’s antidumping rate was based on the difference between the “normal value” of the su bject merchandise (typically, the “home market” price) and the “export price” of the goods sold in the United States. See 19 U.S.C. § 1677(35)(A). But Mueller’s data alone could not be used to determine whether its home market sales were below the cost of production for the goods. Commerce requested data from Mueller’s two primary suppliers, TUNA and Ternium, to calculate the cost of production for the subject merchandise

. See 19 U.S.C. § 1677b(b)(3). Ternium did not provide product

- specific cost data that would enable Commerce to calculate Tern ium’s cost of production for each product , failing to account for different costs based on nominal pipe size and pipe wall thickness

. Therefore, Commerce did not have sufficient information to calculate Mueller’ s anti dumping rate

. When Commerce is missing necessary data, the sta tute provides two options to secure data that can be used

3 Mueller argued alternatively that Commerce should have used Mueller’s acquisition cost s from Tern ium or extrapolated from Ternium’s limited cost data.MUELLER COMERCIAL DE MEXICO v. US 8

as a substitute for the missing information

. See 19 U.S.C. § 1677e. The first is “facts otherwise available

. ” The
statute provides : (a) In general

If

— (1) necessary information is not available on the record, or (2) an interested party or any other pe rson — (A) withholds information that has been requested by [Commerce] under this subtitle, (B) fails to provide such info rmation by the deadline s for su bmission of the information or in the form and manner requested

. . . [Commerce] shall

. . . use the facts otherwise available in reaching the applicable determination under this subtitle.

19 U.S.C. § 1677e(a) (emphases added). The second is the

“ adverse facts available” approach. In this respect, the
statute provides : (b) Adverse Inferences If [Commerce] finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information from [C ommerce], [Commerce], in reaching the applicable determination under this subtitle, may use an inference that is adverse to the interests of that party in selecting from the facts otherwise available. Such adverse inference may include r eliance on informa tion derived from —MUELLER COMERCIAL DE MEXICO v. US 9

(1) the petition, (2) a final determination in the investig ation under this subtitle, (3) any previous review under section 1675 of this title or determination under section 1675b of this title, or (4) any other information placed on the record.

19 U.S.C. § 1677e(b) (emphasis added).

These two sub sections have different purposes. Su bsection 1677e(a) (“sub section (a)”) may be used whether or
not any party has failed to cooperate fully with the agency in its inquiry. See Zhejiang DunAn Hetian Metal Co. v. United States , 652 F.3d 1333, 1346 (Fed. Cir. 2011) (“ ‘[ T] he mere failure of a respondent to furnish requested information— for any reason

— requires Commerce to resort to other sources of information to complete the factual record . . . .’ ” (emphasis added) (quoting Nippon Steel v. United States , 337 F.3d 1373, 1381 (Fed. Cir. 2003) )). In contrast, sub section 1677e(b) (“sub section (b)”) authorizes an inference adverse to an interested party when “Commerce makes the separate determination that [ the party] has failed to cooperate by not acting to the best of its ability.” Id. (quoting Nippon Steel , 337 F.3d at 1381) (internal quotation mark s omitted). In this case, Mueller is a cooperating party , while Ternium is not

. II
Initially we note that there is no contention here that Commerce

, acting primarily under subsection (a) in setting a margin for Mueller

, erred in using TUNA’s data as a surrogate for Ternium’s missing data. Mueller’s primary complaint is that Commerce limited its anal ysis to a small and unfavorable subset of the TUNA data. As stated above, Commerce used the three highest

- marginMUELLER COMERCIAL DE MEXICO v. US 10

transactions instead of taking the total number of tran sactions from the TUNA cost of production data , which resulted in a higher normal value , and therefore, a higher dumping margin. Mueller argues Commerce arbitrarily cherry

- picked the data to achieve this higher dumping margin.

We separately address the two rationales that Co mmerce used to justify its approach. Commerce relied on the two rationales in combination, not on either one as an independent ground. If one fails, as we conclude it does, Commerce’s ruling cannot stand. SEC v. Chenery Corp.

, 332 U.S. 194, 196

– 97 (1947).
First, Commerce concluded that the use of the adverse inference to calculate Ternium’s surrogate production cost actually yielded the most accurate calculation of Mueller’s antidumping rate. 4

4 See J.A. 40 (Memorandum from Christian Marsh, Deputy Ass istant Sec’y, Dep’t of Commerce, to Ronald K. Lorentzen, Deputy Assistant Sec’y, Dep’t of Commerce, Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review: Certain Circular Welded Non

- Alloy Steel Pipe from Mexico 16 (Jun e 13, 2011) ) (“Decision Memorandum”) (“[Commerce] has selected from the facts otherwise available, the best information to use in place of Ternium’s withheld data.” (emphasis added)); J.A. 44 (Decision Mem. 20) (“The Department considers that if it ignores the fact that Ternium chose to withhold necessary information and fails to apply an adverse inference in the selection of the facts available, the resulting dumping margin would not reflect accurately the rate at which Muel[l]er’s sales of merchandise produced by Ternium was sold at less than normal value.” (emphasis added)).MUELLER COMERCIAL DE MEXICO v. US 11

Mueller argues that this rationale is arbitrary and capricious or not supported by substantial evidence. We
agree.
There is no support for Commerce’s claim that using the three least

- favorable TUNA transactions would produce the most accurate dumping margin for Mueller. Even calculating Mueller’s dumping margin based on the TUNA transactions where Mueller purchased the subjec t merchandise at below cost prices showed that Mueller received an average discount that was approximately half of the Commerce rate. An analysis based on all of the TUNA data showed that Mueller received, as a weighted average, less than a ten percent discount on the subject

me r chandise. Finally, an unweighted average of all the TUNA data showed that overall, Mueller’s acquisition
costs were higher than TUNA’s production costs. Co mmerce has not explained why using a larger data set would produce a less accurate dumping margin. Co mmerce’s rationale that Ternium would have cooperated if disclos ing its actual cost s to Commerce had been favor able to it s interests does not support a conclusion that the particular TUNA data Commerce ultimately chose to rely

on accurately estimated those costs. There is no showing that Ternium , in the hypothesized benefit calculus

, could have anticipated that

, i f i t chose non

- disclosure of its actual costs, Commerce would rely on TUNA’s three least favorable transactions to calculate Mueller’s rate ; indeed, there is no showing that Ternium would even have know n what TUNA’s data contained , given Commerce’s oblig ation to keep TUNA ’s data confidential

. 19 C.F.R. §§ 351.10 5, 351.303

– 06

. Therefore, we find that Co mmerce’s accuracy rationale for its calculation of Mueller’s antidumping rate was unsupported by substantial ev idence.

Because Commerce’s calculation of Mueller’s rate r elied in part on this accuracy rationale, this decision mustMUELLER COMERCIAL DE MEXICO v. US 12

be set aside. There is no conte ntion that the use of the particular TUNA data relied on by Commerce was som ehow required by the antidumping statute

. See, e.g.

, ICC v. B h d of Loco motive Eng’ rs , 482 U.S. 270

, 283 (1987); Koyo Seiko Co. v. United States , 95 F.3d 1094, 1101 (Fed. Cir. 1996 )

. However, a reversal is also not appropriate because, as we conclude below, Commerce’s second r ational e provides a possible factor supporting the rate that Commerce adopted.

Commerce’s second rationale rested on policy considerations unrelated to accura cy of the determination to be made on the already

- developed record

. Commerce found that Mueller could and should have induced Ternium’s cooperation by refusing to do business with Ternium, and Ternium would not be sufficiently deterred if Mueller

were unaffected by Ternium’s non

- cooperation, stating that Ternium could otherwise evade its antidumping rate by funneling its goods through Mueller. 5 We conclude

5 See J.A. 42

– 43 (Decision Mem. 18

– 19) (“[W]e seek to induce compliance and to ensure that Ternium does not benefit from its non

- compliance. As a general matter, companies that choose to do business with uncooperative parties may also be impacted.”); J.A. 43

– 44 (Decision Mem. 19

– 20) (“[I]f we were to ac cept Mueller’s arguments, the subject merchandise produced and exported by Tern ium would be subject to a total adverse facts available rate of 48.33, while the Ternium

- produced merchandise e xported by Mueller would be subject to the much lower weighted- ave rage rate of Mueller, such as the rate of 4.81 from the Preliminary Results . Accordingly, Ternium could continue to produce and sell the subject mercha ndise for prices less than its normal value to the U.S. market by directing it[s] merchandise through Mu eller,MUELLER COMERCIAL DE MEXICO v. US 13

that Commerce may rely on such policies as part of a margin determination for a cooperating party like Mueller, as long as the application of those policies is reasonable on the particular facts and the predominant interest in accuracy is properly taken into account as well.

Th is analysis is justified and required, even if Co mmerce is viewed as acti ng entirely under subsection (a) in determining Mueller’s rate . B ut Mueller argues that because these adverse inferences and related rationales are the same as those that support the use of AFA under sub section (b)

, they cannot support a “facts otherwise available” determination under sub section (a). Mueller is mistaken . Sub section (a) does not provide for the specific facts that should be used as a gap

- filling mechanism

. The statute on its face does not preclude Commerce from relying on the same consid era tions under sub section (a) for an AFA determi nation as used under sub section (b). U nder Chevron , Commerce’s interpretation of sub sections (a) and (b) otherwise governs as long as it is reasonable and a permissible statutory construction

. United States v. Eurodif S.A. , 555 U.S. 305, 316 (2009); Timken Co. v. United States , 354 F.3d 1334, 1342 (Fed. Cir. 2004). Consideration under subsection (a) of facts found or rationales applicable under subsection (b), in the way Commerce may be viewed as having done here, passes muster under Chevron

. This result is wholly consistent with our precedents applying subsection (b) itself, which is properly directed to

non

- cooperating parties. T his Court’s decision in F.lli De Cecco Di Filippo Fara S. Martino S.p.A. v. United States

, 216 F.3d 1027, 1032 (Fed. Cir. 2000), required that, even

where it would have no obligation to ever provide cost of production information, under Mueller’s argument.”).MUELLER COMERCIAL DE MEXICO v. US 14

for a non

- cooperating party, subsection (b) be applied to arrive at “a reasonably accurate estimate of the respon dent’s actual rate, albeit with some built

- in increase i ntended as a de terrent to noncompliance.” All the more so for a cooperating party, for which the equities would suggest greater emphasis on accuracy in the overall mix. Moreover, this Court’s decision in Changzhou made clear that, in the case of a cooperating party, Commerce cannot confine itself to a deterrence rationale and also must carry out a case

- specific analysis of the applicability of deterrence and similar policies. Changzhou , 703 F.3d at 1379. And those principles were in no way questioned in Fine Furniture (Shanghai) Ltd. v. United States , No. 2013

- 1158, 2014 WL 1613883, at *4 (Fed. Cir. Apr. 23, 2014), which simply rejected a contention that a counte rvailing duty rate for a cooperating importer could not be based on adverse inferences drawn against a non

c ooperating foreign country (about the country’s subsidi zing of an input into the importer’s product). Fine Furn iture involved no issue about the application of the De Cecco and Changzhou analysis to the selection of the particular rate for the cooperating party. Contrary to Mueller’s contention, consideration of va rious factors in calculating the rate of a cooperating party is not precluded by Changzhou

. In Changzhou

, Co mmerce concluded it was necessary to use an adverse rate against a cooperating party b ecause other rates “would not be sufficiently adverse as to effectuate the purpose of the facts available rule to induce respondents to provide [Commerce] with complete and accurate information”

— in other words, they would not have sufficient deterrent effe ct. Changzhou , 701 F.3d at 1378 (internal quotations omitted) . But there was no support in the statute for imposing any deterrent effect on cooperating parties in that case

. Id . at 1379. The cooperating parties could not have induced the non

- cooperating party to provide co m-MUELLER COMERCIAL DE MEXICO v. US 15

plete and accurate information, thus “there was no need or justification for deterrence

. ” Id . Nor was there a claim that the non

- cooperating party was likely to evade its own antidumping duty through the cooperating parties. Id

. We concluded that it was unreasonable to rely on a dete rrence rationale. We reversed and remanded to Commerce to “ act non

- arbitrarily” in calculating the separate rate for the cooperating parties. Id

. T here is potentially greater support for Commerce’s

use of an evasion or inducement rationale in this case than in Changzhou

. While the cooperating plaintiffs in Changzhou did not have any mechanism to force the non

cooperating party’s cooperation (since the cooperating parties did not purchase goods from the non

- cooperating party ), id. at 1370

– 71
, Mueller had an existing relatio nship with supplier Ternium. Therefore, Mueller could potentially have refused to do business with Ternium in the future as a tactic to force Ternium to cooperate. In fact, the relat ionship between Mueller and Ternium is similar to the relationship between the importer and exporter in KYD, Inc. v. United States , 607 F.3d 760, 768 (Fed. Cir. 2010) . There, King Pac and KYD had an exis ting relationship as importer

- exporter, and this cou rt found that KYD could have used this relationship to induce King Pac to cooperate

. Id

. (“In the aggregate, however, the importers’ exposure to enhanced antidum ping duties seems likely to have the effect of either directly inducing cooperation from the exporters with whom the importers deal or doing so indirectly, by leaving uncoo perative exporters without importing partners who are willing to deal in their products.”) ; see also Fine Furn iture , 2014 WL 1613883, at *7 (“Fine Furniture is a co mpany within the country of China, benefitting directly from the subsidies the government of China may be providing [and] a remedy that collaterally reaches Fine Furniture has the potential to encourage the governmentMUELLER COMERCIAL DE MEXICO v. US 16

of China to cooperate so as to not hurt its overall indu stry.”) . So too with Mueller and Ternium

— if Mueller and other entities were not willing to export goods produced by Ternium, this would potentially induce Ternium to cooperate. On the other hand , if the cooperating entity has no control over the non

- cooperating suppliers, a resulting adverse inference is potentially unfair to the cooperating party. SKF USA Inc. v. United States , 630 F.3d 1365, 1375 (Fed. Cir. 2011)

. In addition, as Commerce recognize d , there is the po ssibility that Ternium could evad e its own AFA rate of 48.33 percent by exporting its goods through Mueller if Mueller were assigned a favorable dumping rate. In this respect, too, this case is different from Changzhou and similar to KYD . We noted there that “KYD’s argument would allow an uncooperative foreign exporter to avoid the adverse inferences permitted by statute simply by selecting an unrelated importer, resulting in easy evasion of the means Congress intended for Commerce to us e to induce cooperation with its antidumping investigations.” KYD , 607 F.3d at 768. Mueller argued that there was no evidence that Mueller was likely to act on Ternium’s behalf and reasoned that Commerce could investigate such false exports and impose T ernium’s own antidum ping rate on them. See, e.g.

, Tung Mung Dev. Co. v. United States , 354 F.3d 1371, 1381 n.10 (Fed. Cir. 2004)

. But the fact that Commerce has alternative methods for addres sing evasion does not mean that the particular chosen method is arbitrary. Commerce can use all of the met hods provided in the Act for enforcement of the anti dumping provisions.

III
In summary, o n the remand, Commerce should reca lculate Mueller’s rate . In doing so, Commerce must have as its primary objective the ca lculation of an accurate rateMUELLER COMERCIAL DE MEXICO v. US 17

for Mueller

— as we said in Changzhou —“ [w]e find no support in our caselaw or the statute’s plain text for the proposition that deterrence, rather than fairness or acc uracy, is the overriding purpose of the antidumping statute

w hen calculating a rate for a cooperating party.” 701 F.3d at 1378 (internal quotation marks omitted). But we do not foreclose Commerce from also relying on the policy considerations that motivated the decision under review

— namely, its desire to encourage Mueller to induce Tern ium’s cooperation and Commerce’s concern that calcula ting too low a rate for Mueller might allow Ternium to evade its own dumping duty by channeling sales through Mueller.

Commerce must take into account that Mueller itself

was a c ooperating party and that Commerce’s induc ement/evasion approach to Mueller’s rate calculation could discourage Mueller’s own cooperation. See id

. To the extent that Commerce chooses to rely on induc ement/evasion considerations, its approach must be re as onable. We do not today decide whether relying on inducement /evasion rationales to calculate Mueller’s rate would be reasonable in the circumstances of this case . We only hold that the statute does not preclude reliance on inducement or evasion considerations in calculating Mueller’s rate, and that such an approach is not for eclosed by Changzhou

. We leave it to Commerce in the first instance to determine the relevant considerations and balance the need to calculate an accurate rate for Mueller a nd Mueller’s status as a cooperating party with other potentially relevant concerns

. Finally, we wish to be clear that under subsection (b) we do not bar Commerce from drawing adverse inferences against a non

- cooperating party that have collateral

conseq uences for a cooperating party. Where an adverse inference is used to calculate the rate of a non

- cooperating party that rate may sometimes be used in calculating theMUELLER COMERCIAL DE MEXICO v. US 18

rate of a cooperating party and thus have collateral consequences for the cooperating pa rty. KYD , 607 F.3d at 768. That is not the situation here. Commerce drew two adverse inferences against Ternium. The first adverse inference was used to calculate Ternium’s own antidum ping rate of 48.33 percent under subsection (b). The second adverse inference against Ternium , used to approximate Ternium’s cost of production, was not used in calculating Ternium’s rate, but only in calculating Mueller’s rate. So too this is unlike Fine Furniture where the government of China provided a subsidy to Fine Furniture. Fine Furn iture , 2014 WL 1613883, at *5– 6. China was an “interested party” as defined by the statute and the adverse inference applied was “adverse to the interests of that party.” 19 U.S.C. § 1677(9)(B); see also Fine Furniture , 2014 WL 16138 83, at *4. The use of an adverse inference was contrary to the interest of China because it directly offset the subsidy that China provided. Here, there is no direct adverse effect on Ternium from using an adverse infe rence as facts otherwise available i n computing Mueller’s dumping margin. Under these circumstances Commerce must proceed in the manner we have described.

VACATED AND REMANDED

C OSTS

No costs.