In Oral Argument, CIT Appears Unconvinced Negative AD/CVD Determinations Preclude Circumvention Inquiries

Exporter SeAH Steel VINA Corp. brought three cases in 2023 to contest the Commerce finding that its Vietnamese-origin steel pipe, made from hot-rolled steel from China, South Korea and India, are circumventing the AD/CVD orders on pipe from those countries (see 2401050019). It claims Commerce couldn’t make that determination because it had found previously that SeAH’s pipe was neither subsidized nor dumped in the United States (see 2501220092).

Barnett said he didn’t find importer SeAH’s argument to be very strong (see 2401050019). He said the circumvention statute doesn’t say anything about why Commerce can’t open an inquiry into “any product from any country,” regardless of whether it reached a negative determination in an investigation on the product in the past.

Another thing that Barnett said struck him about the argument, although it wasn’t “the relevant issue at this point,” was that the investigations had concluded several years ago and “we all know things change.”

SeAH’s counsel, Amrietha Nellan, answered that, under 19 U.S.C. 1677j(b)(1)(3), Commerce may take action if it finds it necessary to prevent evasion. The department based its evasion finding regarding Vietnamese steel pipe on the three factors in 1677j(b)(3), but those factors aren’t exhaustive, she said. Because “[t]he overall general requirement that Commerce needs to look at all relevant information still applies,” the department also should have considered the negative investigation determinations, she said.

“This court has found that even in a negative determination, that determination extends into the future and can only be overturned by judicial review or if that original investigation is replaced,” she said.

Commerce’s practice, until this case, has been that an investigation can only be replaced by a new investigation, she said.

Barnett also said he was “a little concerned” that the exporter was being disingenuous when it said that the U.S. had, in its own briefing, conceded that the circumvention statute doesn’t apply to products that have already been found to be dumped or subsidized. That was based on an interpretation of the government’s brief, but it didn’t go far enough that the exporter could argue the point had been conceded, he said.

In turn, government attorney Tate Walker said that the department did consider the prior investigation determinations.

But Barnett said that Commerce’s multi-factor analysis hadn’t actually fully broken down all of the factors. The department concluded that several were “close,” or “mixed,” but it didn’t say “what makes them mixed,” he said. Because it didn’t explain why it had reached those conclusions, Barnett said he wasn’t sure the findings were supported by substantial evidence.

Jeff Gerrish, counsel for the defendant-intervenors, said that those explanations appeared in the department’s preliminary determinations.

Barnett also said that he felt that the “biggest weakness” in each of Commerce’s three circumvention findings was that all three were the same, “largely word-for-word,” even though their records were somewhat distinct.

Another of SeAH’s counsel, Vi Mai, said that the Chinese and Korean circumvention inquiries saw that the importation of hot-rolled steel into Vietnam “went down significantly” during the review period. Indian imports of the input rose slightly at the same time, she said. And throughout the period, imports of the subject merchandise into the U.S. dropped, she said.

And he expressed a general worry that the circumvention inquiry could go too far.

“Why stop at hot-roll pouring?” he asked. “Why not go back to the, you know, the mines, the coking coal, and the iron and so on?”