'Enough Is Enough,' NLMK Says, Urges CIT to Order Commerce to Grant Section 232 Exclusions

The Court of International Trade should circumvent the remand process and order the Commerce Department to grant exclusions to Section 232 steel and aluminum duties, steel company NLMK Pennsylvania argued in a July 22 brief. Likening its experience with the exclusion process at Commerce to "a bad remake of Groundhog Day," the plaintiff argued that Commerce has repeatedly ignored the record evidence which plainly shows that the U.S. companies do not have the capacity to fill NLMK's requests (NLMK Pennsylvania v. United States, CIT #21-00507).

Administratively, NLMK sought exclusions for two different types -- 10-inch thick and 8-inch thick -- of semi-finished stainless steel slab from Russia via its 54 exclusion requests. Commerce's Bureau of Industry and Security rejected the requests, finding that the domestic industry was capable of timely making the slabs in quantities sufficient to fill NLMK's orders. At CIT, NLMK argued that Commerce did not provide sufficient analysis to deny the exclusion requests.

In response, Commerce offered a remand for 15 of the 54 exclusions to conduct a "new and independent review" of the record limited to the original exclusion request; the parties' original objections, rebuttals and sur-rebuttals; and any other information the decision-maker considers (see 2112230047). The remand offer followed the trade court's ruling in JSW Steel v. U.S., in which the court found another set of Commerce exclusion request denials "devoid of explanation" and frustrating judicial review (see 2008050066). BIS returned with the remand results in May, continuing to deny the exclusion requests (see 2205190046).

NLMK continued its case against the exclusion denials following the remand results with the July 22 brief. The plaintiff argued that "despite the uncontroverted evidence" that the U.S. steel companies and objectors to the exclusion requests did not have the capacity nor the capability to make NLMK's needed slab, "Commerce yielded to the Objectors and issued boilerplate decisions devoid of any reasoning, denying every one of NLMK’s requests." Beginning in 2018, NLMK said that it has repeatedly tried to get Section 232 exclusions only to see BIS ignore record evidence and reject its requests in a process that has "been both puzzling and frustrating."

"If anything is clear from this pattern over the last four years, it is that the Objectors are committed to making certain that NLMK cannot obtain the slab it needs without paying tariffs, even though they themselves cannot supply the slab," the brief said. "Their motives, while obvious, are irrelevant because the sad truth is that so far they have effectively realized their goal. They have succeeded because of Commerce’s inexplicable, rote acceptance of the Objectors’ unsupported assertions, in total disregard of the record evidence."

NLMK spent the bulk of its brief going over the evidence which purportedly shows that the objectors cannot supply the plaintiff's slab orders. For instance, the first of NLMK's 2021 requests included two requests of 200,000 tons of 8 inch slab. Nucor and U.S. Steel objected to the requests, though Nucor later admitted it doesn't produce slab. NLMK then said the record revealed that U.S. Steel has historically failed to supply enough quantities of 8 inch slab to NLMK and had actually eliminated its capacity to supply the slab to the importer. Commerce still denied the exclusion requests, declaring the decision was based on the ITA's recommendations -- recommendations NLMK characterizes as "conclusory and devoid of reasoning or analysis."

The recommendations said that U.S. Steel can make 100% of the requested slab. "That was it," NLMK said. "That was the sum and substance of ITA’s recommendation. There was no indication how it reached this conclusion, nor why a finding that USS could produce 8-inch slab supported a finding that it could produce enough 8-inch slab to meet its own requirements and also supply NLMK." As such, the rejection of the importer's exclusion requests was arbitrary and capricious and should be reversed, the brief said.

The plaintiff argues that this process clearly violates the Administrative Procedure Act and the constitutional right to due process. "Commerce has, we submit, an obligation to both appear to do justice and to do justice," the brief said. "Here it has done neither." To counter this alleged perversion of justice, NLMK wants the trade court to circumvent the remand process and order that the exclusions be remanded under the "well-known 'doctrine of enough is enough.'"