US Company Blasts Commerce's Cumulation Decision Over Brazilian Steel Injury Review

The International Trade Commission was wrong not to cumulate imports of cold-rolled steel flat products from Brazil with imports from China, India, Japan, South Korea and the U.K. in a five-year sunset review of the antidumping and countervailing duty orders on the products, U.S. company Cleveland-Cliffs argued in an Oct. 5 complaint the Court of International Trade. The ITC further erred by focusing on the likely volume of the Brazilian imports in its cumulation analysis in the injury investigation, resulting in an "impermissible circular" injury analysis, the complaint said (Cleveland-Cliffs Inc. v. United States, CIT #22-00257).

The ITC ultimately found that imports from China, India, Japan, South Korea and the U.K., but not from Brazil, are likely to injure the domestic industry should the orders be revoked. The commission was divided on Brazilian imports. In the review, the ITC chose not to cumulate Brazil's with the rest of the reviewed countries' imports, saying Brazil's goods would compete under different conditions of competition.

This conclusion was based on Brazil being subject to a quota of 57,251 short tons for Section 232 steel and aluminum tariffs. The ITC imports from the other countries were in a position to compete for much larger sale volumes because Brazilian producers must share the quota limits. The majority at the ITC bolstered this claim by finding that the quota is not likely to be reversed.

Cleveland-Cliffs argued that South Korea also had a Section 232 quota that was larger than Brazil's. Further, Cleveland-Cliffs argued that there was "substantial evidence" to indicate the quotas could be reversed, saying that in the months leading up to the injury determination, the president revised the Section 232 tariffs for the EU, the U.K. and Japan while Brazil and South Korea were urging the administration to weaken Section 232 relief for those countries.

"Despite the strong evidence submitted by domestic producers on this issue, the Commission did not address this evidence at all when finding that 'nothing in the record of these reviews indicates that the section 232 indicates that the section 232 trade action, an absolute quota, as it relates to imports of CRS from Brazil will be terminated in the reasonably foreseeable future,'" the brief said. "Given this failure, the Commission’s decision not to cumulate Brazil with the other subject countries was not supported by substantial evidence as a whole."

In prior reviews, the ITC "had typically not" looked to Section 232 tariffs, quotas and tariff rate quotas as the grounds to not cumulate the subject imports. As such, the ITC failed to explain its departure from this practice in looking to the quotas to make a decision on cumulation, the brief said.

The ITC also erred by "focusing almost exclusively on the likely volume of the Brazilian imports in its cumulation analysis in the cold-rolled steel investigation," the brief said. The trade court has previously found that the commission cannot base its conditions of competition analysis on the likely volumes of the imports since it engaged in an "impermissible circular" analysis. By focusing on the likely volume of the Brazilian imports, the ITC carried out this same circular analysis, the complaint said.