Jan 4th, 2024

Trade Updates for Week of January 3, 2024


Before the Court in Jilin Bright Future Chem. Co., v. United States, Court No. 22-00336, Slip Op. 23-189 (December 21, 2023) was a challenge to the final results of the U.S. Department of Commerce in the fourteenth administrative review of the antidumping duty order on certain activated carbon from the People’s Republic of China (“China”) for the period of review (“POR”) April 1, 2020, through March 31, 2021. See Certain Activated Carbon From the People’s Republic of China, 87 Fed. Reg. 67,671. The challenge was aimed at Commerce’s selection of surrogate values for bituminous coal and coal tar pitch. However, the Court ultimately sustained Commerce’s final results.

In June 2021, Jilin Bright was selected, along with Daton Juqiang Activated Carbon Co., Ltd. (“DJAC”) as the mandatory respondents to the fourteenth administrative review of the antidumping duty order on certain activated carbon from China. On May 6, 2022, Commerce preliminarily determined that certain activated carbon from China was sold at less than fair value in the United States during the POR. Certain Activated Carbon From the People’s Republic of China, 87 Fed. Reg. 27,094. Commerce preliminarily selected Malaysia as the primary surrogate country, valuing bituminous coal using Malaysian import data under Harmonized Tariff Schedule (“HTS”) 2701.12 and coal tar pitch using Malaysian import data under HTS 2706.

With respect to its bituminous coal valuation, Commerce also requested that the parties supply information about the calculation of gross calorific value to aid its determination as to whether respondents’ inputs meet the requirements of bituminous coal under HTS 2701.12.

The issue turned on Jilin Bright’s challenges to these two preliminary surrogate values, and subsequently to the Final Results. First, Jilin Bright disputed the surrogate value for bituminous coal, arguing that because of heat value, the coal it used falls under HTS 2701.19, “other coal,” rather than HTS 2701.12, “bituminous coal.” Second, relying on the Global Coal Tar and Coal Tar Pitch Report (“UMR Coal Tar Report”)5 as a benchmark, Jilin Bright argued that Malaysian import data under HTS 2706 for coal tar pitch was anomalous. In the alternative, Jilin Bright proposed that Commerce use data for Russian imports under HTS 2706 as the surrogate value for coal tar pitch. However, for the Final Results, Commerce selected a formula to convert the heat value of Jilin Bright’s bituminous coal and, based on that conversion, rejected Jilin Bright’s argument that such coal did not meet the standards for HTS 2701.12. Commerce also continued to value coal tar pitch using the Malaysian import data under HTS 2706 because the UMR Coal Tar Report did not include an adequate explanation of the methodology used to obtain and report the data therein. As to the Final Results, Jilin Bright argued that Commerce’s surrogate value selections for bituminous coal and coal tar pitch are not supported by substantial evidence.

The court reviewed the challenge pursuant to section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c). The standard for assessing substantial evidence “. . . is not whether the information Commerce used was the best available, but rather whether a reasonable mind could conclude that Commerce chose the best available information.” Jiaxing Brother Fastener Co. v. United States, 822 F.3d 1289, 1300–01 (Fed. Cir. 2016) (citation omitted). Substantial evidence requires Commerce to “explain the basis for its decisions,” and “the path of Commerce’s decision must be reasonably discernable.” NMB Sing. Ltd. v. United States, 557 F.3d 1316, 1319 (Fed. Cir. 2009). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “Substantial evidence . . . means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 217 (1938).

As to the bituminous coal, the Court concluded that Jilin Bright was required to raise its arguments to the agency in the first instance. The Court found the record to clearly establish that Jilin Bright, as much as the petitioners and DJAC, had notice of this issue but failed to contest the conversion formula before Commerce. It therefore, declined to review the challenge now. As to the benchmark data, the Court reinstated that Commerce will compare potential surrogate values against appropriate benchmark data for “a product whose price roughly correlates with the price of an input assigned a surrogate value.” Blue Field, 37 CIT at 1622, 949 F. Supp. 2d at 1317. When using import prices as a surrogate value, Commerce will exclude from its surrogate value calculation imports from nonmarket economy countries and from countries providing export subsidies or found to have engaged in dumping. See, e.g., 19 U.S.C. § 1677b(c)(5); Fresh Garlic Prods. Ass’n v. United States, 39 CIT __, __, 121 F. Supp. 3d 1313, 1318 (2015). The court concluded that Plaintiff failed to persuade the court that it should impose an additional burden on the agency to disaggregate its selected surrogate value data and test it against data from noncomparable or nonproducing countries. Lastly, as to the valuation of coal tar pitch, the Court was also unpersuaded by the argument that Russian impot data should be used as the surrogate value. The Court said concluded that Commerce reasonably determined to rely on Malaysian import data under HTS 2706 to value coal tar pitch, and its decision to reject Plaintiff’s arguments against such reliance was based on substantial evidence.