ITC Discretion Over Cumulation Decisions Is 'Not Unfettered,' US Steelmaker Says

The International Trade Commission's decision not to cumulate imports of cold-rolled steel from Brazil with those of China, India, Japan and the U.K. in sunset reviews "conflicts" with Court of International Trade precedent, U.S. steel company Cleveland-Cliffs said in a July 31 reply brief. The company also said the commission didn't follow precedent when it decided not to cumulate imports from Brazil with those from South Korea (Cleveland-Cliffs v. U.S., CIT # 22-00257).

The ITC committed a "significant legal error" when it chose not to cumulate imports of cold-rolled steel from Brazil during the sunset reviews. The decision was "inconsistent with the legal principles governing the Commission’s cumulation determinations in sunset reviews" and with previous decisions addressing the likely impact of the Section 232 measures on subject imports. The ITC's failure to address those issues violated "one of its fundamental obligations" to provide a reasoned explanation of its findings, Cleveland-Cliffs said. The company asked CIT to remand the matter to the commission.

In response to the ITC's claim that the commission doesn't need to explain why it relied on the production and export differences between Brazil and South Korea, Cleveland-Cliffs again said giving a "reasoned explanation of its significant findings is one of the Commission's most fundamental obligations under the statute." The company also said that "[g]iven the fundamental nature of this obligation, it is extraordinary that the Commission now claims that" since the court has approved its reliance on production and export levels in past cases, "the Commission can simply point to these differences in its analysis without explaining why these differences are relevant."

In June, the ITC argued that the governing statute "is explicit that cumulation in five-year reviews is discretionary" (see 2306140068). Two Brazilian steel producers -- Companhia Siderurgica Nacional and Usinas Siderurgicas de Minas Gerais -- agreed with the ITC in a joint brief, arguing that the ITC has “wide discretion” over which factors to consider in reaching that cumulation determination (see 2306290020).

CIT has clearly explained in past cases "the Commission’s discretion not to cumulate imports under the statute is 'not unfettered,'" Cleveland-Cliffs said. The court has rejected arguments that overly rely on "likely volumes" when deciding whether to cumulate, which the Commission has itself admitted.

The ITC did not consider differences in possible product mix, in production, capacity or export levels, or the existence of corporate affiliations between the subject countries, Cleveland-Cliffs argued. The ITC also did not consider whether there may have been different volume or pricing trends between the countries. "By relying solely on a comparison of the likely volumes for Brazil with the likely volumes for these four countries, the Commission majority performed the very analysis that this Court has made clear is in conflict with the statute," the brief said.

The commission said its cumulation analysis heavily relied on the fact that the Section 232 quota for Brazil was different from the restrictions on China, India, Japan and the U.K. Cleveland-Cliffs countered that this claim "mischaracterizes the Commission majority's analysis," which linked the different restrictions to its finding that the import volumes from Brazil would be smaller than the import volumes from China, India, Japan and the U.K. Thus, the ITC's analysis was not based on "several meaningful differences" as the ITC says, the U.S. steel company said. The analysis can't stand since it violates the "fundamental principle" that the ITC can't rely on the volume of the imports alone, the brief claimed.