Commerce's Denial of Section 232 Product Exemption Requests Is Part of Larger Pattern, Steel Importer Says
The Department of Commerce routinely made minimal effort to verify claims that imported specialty steel products easily could be supplied by domestic producers and therefore incorrectly denied product exclusions from Section 232 steel tariffs, LE Commodities said in an Aug. 24 complaint to the Court of International Trade (LE Commodities, LLC v. United States, CIT # 22-00245)
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The California-based importer of stainless, tool and high-speed steel semi-finished products is challenging denials of 14 exclusion requests it submitted between December 2019 and November 2020 covering stainless steel welded sanitary tubing. After the requests were filed, United Industries Inc. filed objections to each, claiming "without support" that it could manufacture the subject steel in the quality and quantity required by LE Commodities. In its rebuttals to Commerce, LE Commodities submitted "industry information" that indicated that United had lead times well beyond those asserted in its objections. All 14 requests were ultimately denied by Commerce. As a result of the denials, "LE Commodities paid substantial amounts in Section 232 steel tariffs from which it should have been exempt," the company said.
In the complaint, LE Commodities argued that Presidential Proclamation 9705 "expressly directed the Department of Commerce to grant exclusions from the Section 232 tariffs to U.S.-based businesses for imported steel products that are not immediately available in sufficient quality or quantity in the U.S.," noting that Commerce's regulations place the burden on the objector to demonstrate that it can produce a substitute product within the requisite time frame (the time required for LE Commodities to obtain the entire quantity of the product from its foreign supplier or eight weeks), but that Commerce took "no effort to verify the objector’s claims" regardless of the standards established by the proclamation or the department’s own regulations. The denials are "part of a pattern in which Commerce has rotely rejected hundreds of exclusion requests," the company said. The use of the same generic "conclusory language" in all of the exclusion denials without any explanation is part of a larger pattern of pro forma denials, LE Commodities argued.
The company says that the denials, in spite of United's failure to provide evidence that it was capable of producing and delivering the requested quantities of the subject steel in the time frames asserted, means that Commerce failed its burden of analysis with regard to the exclusion requests. The company has therefore asked the court to declare that Commerce's denials of LE Commodities’ exclusion requests were unlawful, to grant the exclusions from the Section 232 steel tariffs, and to refund Section 232 duties already paid in addition to legal fees. Alternatively, it has asked the court to remand the matter to Commerce for proper treatment.