Oil Pipe Producer Files Lawsuit Challenging Section 232 Exclusion Denials on Imported Inputs

A U.S. producer of pipe used in the oil and gas industry filed a lawsuit Jan. 17 challenging the denial of exclusions from Section 232 tariffs on imported steel pipe it uses as inputs. Borusan Mannesmann Pipe U.S. says the Commerce Department relied on incomplete and inaccurate statements in objections from other steel producers to find that the company’s imports could be replaced by domestic production and should not be excluded from Section 232 duties.

Borusan, the subsidiary of a Turkey-based conglomerate, needed the welded green tube it imported from Turkey for production of oil country tubular goods at its pipe mill in Baytown, Texas. It filed 19 requests for exclusions from Section 232 tariffs, which ranged up to 50 percent as a result of a tariff increase that affected only Turkish steel products, covering 135,000 metric tons of unfinished tube.

Each of the 19 exclusion requests prompted objections from other domestic producers. U.S. Steel, IPSCO Tubulars, Maverick Tube, Boomerang and Zekelman said they could produce equivalent products in a “sufficient and reasonably available amount,” which under Commerce regulations means within eight weeks. Commerce denied each of the requests, finding Borusan could source the green tube it needed domestically. Borusan filed suit at the Court of International Trade.

Borusan says the objections relied upon by Commerce were faulty, and should not have resulted in the denial of its exclusion requests. First, it said none of the steel companies said they could produce what Borusan required within eight weeks. Some did not say how long they would take, and others gave time frames of 10 weeks or more. Another even said it could supply Borusan, but would not because it is a competitor.

The objectors also failed to note that they could not produce equivalent products to those required by Borusan. Some admitted that they could not meet quality standards set by Borusan, while others did not provide quality control statistics so their ability to supply Borusan could be evaluated. U.S. Steel told Commerce it could produce equivalent green tube at two facilities, but noted that one of its facilities was idled, and failed to inform Commerce that the other facility made seamless pipe, not the welded pipe used by Borusan.

Borusan seeks a court order declaring that the denials of its exclusion requests were improper, and ordering Commerce to instruct CBP to refund the Section 232 tariffs it has paid as a result of the denials. In the alternative, it asks CIT to order Commerce to reconsider the denial of its exclusion requests “in accordance with the standards set forth” in Commerce’s own regulations. Commerce and the Justice Department did not comment.

Email ITTNews@warren-news.com for a copy of the complaint.

(Borusan Mannesman Pipe U.S., Inc. v. U.S., CIT # 20-00012)