Opinion ID: 867987
Heading Depth: 2
Heading Rank: 4

Heading: Affirmative Likely Injury

Text: Appellants also request that we overturn the Court of International Trade’s decisions in NSK IV, NSK V, and NSK CORPORATION v. ITC 27 NSK VI and reinstate the Commission’s affirmative determinations for the U.K. and Japan. In its Second Remand Determination, the Commission concluded “that revocation of the antidumping duty orders covering imports of the subject ball bearings from Japan and the [U.K.], when cumulated with other subject countries, will result in the recurrence or continuation of material injury to the domestic bearings industry.” 2010 ITC LEXIS 431, at -99. According to Appellants, substantial evidence supported the Commission’s affirmative determinations, and the Commission provided a reasonable explanation of how its conclusions followed from its factual findings. Thus, Appellants contend that the Court of International Trade inappropriately remanded the Commission’s determinations and left the Commission with no choice but to issue negative determinations that did not align with its reasonable conclusions. The Commission set out a number of findings indicating that the revocation of the antidumping orders covering subject imports from the U.K. and Japan, when cumulated with those of the other subject countries, “would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.” 19 U.S.C. § 1675a(a)(1). The Commission observed that subject producers had sufficient excess capacity to increase their exports to the United States significantly. Second Remand Determination, 2010 ITC LEXIS 431, at . Further, the Commission determined that the United States—the second largest importer of ball bearings— is an attractive market that offers sellers higher prices for ball bearings than they could receive in foreign markets. Id. at -85. Thus, the Commission set out facts indicating that the cumulated subject countries had strong incentives, as well as the ability, to ship significant amounts of ball bearings to the United States. Paying particular attention to the competitive interplay among subject imports, non-subject imports, and 28 NSK CORPORATION v. ITC domestic product, the Commission made a number of findings supporting its conclusion that the domestic bearings industry likely would be materially injured if the orders at issue were revoked. The Commission reiterated its determination that “the industry is in a vulnerable condition” based on its observation that “the domestic industry continued to experience significant declines in capacity utilization, productivity, profitability, and market share levels over the course of the [POR] and saw its cost structure continue to erode.” Id. at -100. Thus, according to the Commission, the domestic industry is “susceptible to material injury from the cumulated subject imports if the orders covering the cumulated subject imports are revoked.” Id. at . Further, the Commission again stressed that there is a high degree of substitutability among domestic bearings, subject imports, and non-subject imports, making price a very important factor in purchasers’ decision-making. Id. at . With respect to the likely impact of revocation of the orders on pricing and competition, the Commission determined that “subject imports were likely to significantly undersell the domestic products and were likely to have significant adverse effects on domestic prices upon revocation of the orders.” Id. at . The Commission found that subject imports frequently undersold domestic ball bearings, even with the orders in place, suggesting that “the cumulated subject imports are likely to become more aggressive on price when competing with domestic bearings.” Id. at . The Commission also concluded that “subject imports have the ability to undersell the domestic like products as frequently and significantly as the nonsubject imports did during the second period of review” based on its examination of the underselling done by subject and non-subject imports. Id. at . In particular, the Commission observed that, “[d]uring the first period of review, subject imports undersold domestic like products in 67.3 percent of comparisons, at an average NSK CORPORATION v. ITC 29 underselling margin of 34.0 percent with margins as high as 87 percent.” Id. at  (footnotes omitted). “[D]uring the second period of review, non-subject imports undersold domestic like products in 66.0 percent of comparisons, at an average underselling margin of 35.8 percent with margins as high as 83.4 percent.” Id. The Commission further noted that “once the orders are revoked and the subject imports will resume a more aggressive pattern of underselling, it is likely that they will thereby take market share primarily from the domestic industry rather than the non-subject imports, given that the non-subject imports are priced lower than the domestic bearings.” Id. at . Accordingly, the Commission concluded “that the record establishes that, notwithstanding the significant presence of low-priced, non-subject imports in the U.S. market, the subject imports are likely to be more than a minimal or tangential factor in the material in jury to the domestic industry that is likely to continue or recur upon revocation of the orders.” Id. at -02. Appellees allege that, in reaching these conclusions, the Commission did not consider adequately the impact of imports from non-subject countries. As a consequence, they assert that the Court of International Trade appropriately remanded the Commission’s determinations for further explanation. In NSK IV, the court observed that “[n]on-subject imports have become a significant and price-competitive factor in the United States ball bearings market” and concluded that “non-subject imports may prevent the subject imports from achieving the requisite level of causation and, therefore, serve as an impenetrable barrier that precludes the agency from affirmatively finding injury in this sunset review.” 712 F. Supp. 2d at 1368. Appellees argue that remand for further consideration was appropriate in light of considerable record evidence indicating that subject imports would cause, at most, a minimal or tangential injury to the domestic market if the orders at issue were revoked. 30 NSK CORPORATION v. ITC Appellees suggest that, even if the orders affecting imports from the subject countries were revoked, any harm to the domestic bearing industry would result from non-subject imports, as opposed to imports from the subject countries. In particular, Appellees point to the rapid growth of non-subject imports’ market share, which increased from 5.2 percent in 1987 to 23.6 percent in 2005. Appellees also highlight the Commission’s finding that price is an essential factor in purchasing decisions and stress that non-subject imports were typically priced lower than imports from subject countries. Appellees further assert that producers in subject countries would not be able to lower their prices sufficiently to be pricecompetitive with non-subject importers. In sum, Appellees contend that the subject imports would be unable to compete effectively with non-subject imports and thus would not be able to alter the market place significantly or cause material harm to the domestic industry. Having reviewed the record as a whole, we conclude that the Commission appropriately determined that revocation of the orders covering the subject countries, in all likelihood, would materially injure a vulnerable domestic industry. Appellees are correct that numerous record facts detract from the Commission’s conclusion. Non-subject imports had a significant presence in the domestic market during the relevant periods of review and were often sold at lower prices than domestic bearings and bearings from subject countries. These facts, however, do not detract from the Commission’s findings to such an extent that we can say the Commission’s determinations were not supported by substantial evidence. Instead, the Commission set out a sound factual basis for its conclusion that subject countries had the ability and incentive to cause material injury to the domestic industry if the relevant antidumping orders were revoked. As this court has noted in the past, “it is the role of the expert factfinder—here the majority of the PresidentiallyNSK CORPORATION v. ITC 31 appointed, Senate-approved Commissioners—to decide which side’s evidence to believe.” Nippon Steel, 458 F.3d at 1359. Where, as here, “there is an adequate basis in support of the Commission’s choice of evidentiary weight, the Court of International Trade, and this court, reviewing under the substantial evidence standard, must defer to the Commission.” Id. Further, the Commission specifically addressed and rejected Appellees’ theories regarding the impact of nonsubject imports, noting that significant portions of the record cast doubt on the interpretation of the facts that Appellees espouse. See id. at -32. The Commission observed that, “even with the restraining effects of the orders in place, the subject imports have remained a substantial and price-competitive factor in the market. . . . [T]heir share of the market has ranged between 11.5 and 14.2 percent during the first and second periods of review.” Id. at . The Commission also observed that, although subject imports experienced declines in market share after the antidumping orders were put in place, “the subject imports retained a significant market share throughout the second period of review” and “increased their share of the market over the final three years” of the second period of review. Id. Thus, despite Appellees’ assertion to the contrary, substantial evidence supports the Commission’s analysis, which showed that subject imports could, and did, compete with non-subject imports. Consequently, we reverse the Court of International Trade’s decisions in NSK V and VI and judgment affirming the Commission’s negative determinations regarding the orders on the U.K. and Japan, and we order the Court of International Trade to reinstate the Commission’s affirmative material injury determination reached in the Second Remand Determination. 32 NSK CORPORATION v. ITC