Steel Exporter Claims Section 232 Tariffs Unlawful in Fighting Deduction From Price in AD Case

Mexican steel exporter Deacero S.A.P.I. de C.V. says that since Section 232 tariffs on Mexican steel and aluminum were made in violation of certain procedural requirements, they should not be deducted from the exporter's U.S. price when determining its antidumping margin. In a May 10 motion for summary judgment in a case at the Court of International Trade, Deacero also argued that since the tariffs are remedial and temporary, they are not ordinary customs duties and are thus excluded from antidumping duty calculations (Deacero S.A.P.I. de C.V. v. U.S., CIT # 20-03924).

Deacero brought the case to CIT to challenge the final results of an antidumping administrative review of steel concrete reinforcing bar from Mexico covering entries made 2017-18. In its motion for summary judgment, Deacero piggybacks on a recent CIT decision that found that President Donald Trump's Section 232 tariff expansion onto steel "derivatives" violated procedural time limits (see 2104050049). The plaintiff in that case, PrimeSource Building Products, successfully argued that the tariffs were announced well after the 105-day deadline for tariff action following the Commerce Department's report that led to the initial imposition of Section 232 steel tariffs in 2018.

Citing the PrimeSource decision, Deacero claims that the president's announcement of the Section 232 tariffs on goods from Mexico was made within the allotted 90-day window following the report from Commerce but that Trump's plan to implement the duties fell outside the 15-day gap allotted to put the tariffs in place. There's also a provision governing the procedural requirements of Section 232 which states that the president is not beholden to the 105-day limitation if he or she decides to engage in negotiation of an agreement and none is reached after 180 days or an agreement is reached but determined to be ineffective. By having pursued negotiations and implementing the tariffs, the president was attempting to have his cake and eat it too in violation of the exception, Deacero argued.

Deacero also argued that Commerce should not be allowed to deduct the Section 232 duties from its U.S. price since the duties are not ordinary customs duties -- a question already considered by CIT in an April 17 opinion (see 2102170040). In the decision, the court found that Section 232 tariffs are a form of normal import duties that should be deducted from foreign exporters' U.S. prices in AD duty rate calculations. The trade court held that, unlike Section 201 safeguard duties and AD/CV duties, which are not deducted, the national security-based Section 232 tariffs have a different purpose unrelated to remediating injury from an import surge or underpriced imports.

Attempting to escape a similar fate, Deacero argued that the Section 232 duties on Mexico were different due to the clear intent of the duties to remedy harms associated with dumped and subsidized products. "Deacero respectfully submits that in this case, the language of Proclamation 9894 makes Commerce’s already weak position untenable," the exporter argued. "Proclamation 9894 directly establishes a link between Section 232 duties and dumped and subsidized goods, and indicates Section 232 duties were viewed as a tool to remedy concerns over dumped and subsidized products from Mexico."