Commerce 'Privileges Objectors' in Section 232 Exclusion Cases, Manufacturer Argues

The Commerce Department wrongly denied Section 232 exclusion requests for tin mill products despite a lack of domestic supply, Seneca Foods Corporation said in its Feb. 28 motion for judgment at the Court of International Trade. The motion challenges eight decisions by Commerce denying Seneca’s requests for exclusions from Section 232 tariffs for tin mill products consisting of steel (Seneca Foods Corp. v. United States, CIT # 22-00243).

Seneca, a U.S. food product manufacturer, said Commerce believed U.S. Steel's claims of available capacity despite the company's refusal to sell Seneca the relevant products over a multiyear period. Commerce's denials fail to explain why it ignored U.S. Steel's consistent refusals to supply Seneca, the food manufacturer said. "Commerce went so far as to claim that there was no evidence to contradict USS’s implausible claims of available capacity, despite mountains of evidence," Seneca said.

Seneca said it requires tin mill products in consistent quantities to manufacture its own cans. "Due to domestic supply shortages, and despite continuous attempts to source from domestic suppliers," Seneca said that it has been forced to turn to imported steel. Under the Section 232 exclusion process, these imports should be excluded from tariffs because no domestic sources were able to supply the requested volumes in an acceptable timeline, Seneca said.

Commerce denied Seneca’s exclusion requests in spite of "overwhelming" evidence that U.S. Steel was incapable of supplying Seneca at the time of its orders and had not supplied Seneca with any tin mill product for over two years previous, Seneca said. It is also "undisputed" that the steel company made "material misstatements" to Commerce about its past sales to Seneca, Seneca said. The view that U.S. Steel could provide the products in a timely manner is "so implausible" that "it must be set aside," argued Seneca said.

Commerce also failed to consider or explain its decision to ignore evidence of the steel company's refusals to supply Seneca, the company argued. In its own regulations, Commerce "expressly aims to avoid" situations in which "domestic parties object to an exclusion request and then refuse to fill orders," Seneca said. Therefore, Commerce procedures allow the exclusion request to document past activity with an objector.

Seneca said that it did just that only to have that evidence ignored by Commerce. The Administrative Procedure Act required Commerce to "carefully discuss and analyze USS’s material misstatements, USS’s years of unavailability and failures to supply Seneca, and USS’s repeated refusals to offer any tin mill products." Instead, Seneca argued, Commerce "ignored all contrary evidence" and "gave no explanation or consideration to USS’s repeated refusals to supply Seneca."