Steel Importer Blasts Section 232 Exclusion Process, Claims Objector Lied to Commerce

U.S. steel manufacturer Maverick Tube lied to the Commerce Department when it objected to importer Maple Leaf Marketing's Section 232 steel and aluminum tariff exclusion requests, MLM told the Court of International Trade in a March 18 brief. As such, Commerce's Bureau of Industry and Security's decision to deny these requests cannot be sustained, MLM argued. It urged the trade court to remand the case so Commerce can add communications the agency had with a subject matter expert on whose word the exclusion requests were denied (Maple Leaf Marketing v. United States, CIT #20-00125).

MLM initially requested the two Section 232 exclusions for certain steel tubing imports, called EndurAlloy. After they were denied, the importer took its case to CIT, where Commerce asked for a remand for further consideration of the exclusion denials. In its remand motion, Commerce cited as a possibility that it could grant one or both of Maple Leaf's exclusion requests. BIS maintained its initial decision and rejected MLM's exclusion requests. The International Trade Administration found Maverick can make an identical product of sufficient quantity within eight weeks of the order being placed (see 2110190041).

MLM argued in its motion for judgment that Maverick's objection is filled with "contradictory claims that are irreconcilable" and can't be solved on remand. For instance, MLM said Maverick merely copied the exact metallurgical chemical composition of its EndurAlloy products in its exclusion objection. "This copying is especially absurd because Maverick could not even trouble itself to accurately copy the entire EndurAlloy metallurgical profile," the brief said. "Instead, Maverick overlooked the blank text box where a requestor can elect to add chemicals that are not listed in BIS’ default listings of elements sought to be identified."

As a result, the remand upholding the exclusion denials cannot be sustained, MLM argued. Maverick certified it doesn't and couldn't make a "substitute product" for the EndurAlloy goods, the brief said. MLM said it hasn't seen what Maverick offered as a substitute product but said EndurAlloy goods are made through a highly technical process that employs a proprietary mix of chemical powders. "This alone puts paid Maverick's claims that it can manufacture a product with an identical metallurgical profile -- how the Department or the unidentified SME determined that Maverick presented credible claims in its objection is difficult to understand," the brief said.

MLM also said Commerce made its remand decision based in part on the word of a subject matter expert, but the communications with the unknown expert are themselves unknown and not a part of the record. A further remand is needed to find this expert, evaluate the person's qualifications, look at the communications between Commerce and the expert and look at what facts were reviewed, the brief said. "The failure to include in a record ex parte communication which communicate new and material information to the deciding official -- which was apparently the case here -- constitutes a due process violation as well," the plaintiff said.