Arguments Claiming Section 232 Duties Are 'Remedial' Fall Flat, Nucor Tells Trade Court
Section 232 national security tariffs are not remedial and should not be deducted from an antidumping duty respondent's U.S. price, and their inclusion in that price does not constitute double counting of duties, AD petitioner Nucor Corp. argued in a May 13 reply brief that came in response to arguments to the contrary from Nippon Steel Corp. (Nippon Steel Corporation v. U.S., CIT #21-00533).
The case concerns the third administrative review of the antidumping duty order on hot-rolled steel flat products from Japan, in which Commerce ultimately assigned Nippon an 11.7% dumping rate, partly due to Commerce's reduction of Nippon's U.S. price by the amount of Section 232 duties paid on its products.
Previously, the court has looked to three factors on whether the steel and aluminum duties are "United States import duties" and can thus be deducted: whether the duties are remedial, are temporary and deducting them from the U.S. price would not amount to a double remedy. If all three are answered yes, the duties are U.S. import duties and can be deducted. While finding that the duties aren't temporary, the court found that deducting them wouldn't amount to a double remedy and that they're not remedial. The court's analysis was partially based on Commerce's previous analysis, which found that Section 201 safeguard duties are not U.S. import duties.
Nippon filed its case at CIT seeking to make new arguments in its bid to not have its Section 232 duties deducted from its U.S. price (see 2203030034). First, the exporter argued that Section 232 duties are remedial since they serve a special remedial purpose as opposed to a general revenue purpose. In its reply, Nucor said that Nippon's argument runs counter to Federal Circuit precedent that found the term "United States import duties" to be ambiguous.
To succeed, Nippon has to show that U.S. import duties include Section 232 duties and that U.S. import duties as a term covers all duties that meet a narrow set of criteria, Nucor argued. The petitioner said that NSC cannot do this by simply saying that Section 232 duties are generally remedial, as established in a prior CIT opinion. The real question NSC must answer is not whether Section 232 duties are remedial but for what purpose the import duties are deducted from the U.S. price and whether the deduction by the amount of Section 232 duties serves that purpose.
"To the extent that NSC attempts to answer this question by arguing that what it terms 'ordinary customs duties' exist solely for the function of raising revenue, while Section 232 duties have the 'overarching purpose' of 'protecting the bottom line of domestic producers,' [Nippon] fails,'" the brief said. Section 232 duties do not have to be preceded by a finding of damage to the domestic industry, as Nippon suggests. "Section 232 also makes clear that imports' impact on domestic industries is only relevant in relation to national security -- and not in relation to the viability or success of a domestic industry in its own right," Nucor argued.
Nippon also argued that deducting Section 232 duties constitutes a double remedy, despite prior court rulings to the contrary. While CIT has previously held that there is no statutory interplay between Section 232 duties and antidumping duties, an interplay actually exists, rendering Section 232 duties akin to Section 201 and antidumping duties.
"[Nippon] is wrong," Nucor said. "Despite [Nippon]'s characterizations, the statute does not predicate the imposition of Section 232 duties on a finding of injury to a domestic industry. Moreover, Section 232 makes clear that any impact that investigated imports have on domestic industries is only relevant in relation to national security. ... By contrast, the 'statutory interplay' between Section 201 and antidumping duties is clear -- and goes beyond the predicate ITC injury determination that both of these types of duties require. The statutory provisions authorizing Section 201 duties expressly require the ITC to consider whether dumping and/or subsidization is taking place when conducting a Section 201 investigation."