US Says CIT Bound by CAFC Decision Allowing Deduction of Section 232 Duties From US Price

The U.S. Court of Appeals for the Federal Circuit "unequivocally held" that the Commerce Department could deduct Section 232 national security duties from U.S. price in antidumping duty cases, the U.S. argued in a Nov. 17 supplemental brief at the Court of International Trade.

The government's brief responds to claims from exporter Nippon Steel that the appellate court's ruling should not apply since deducting Section 232 duties here "would require the United States to violate its treaty obligations with respect to Japan" (Nippon Steel v. U.S., CIT # 21-00533). But treaty obligations exempt duties imposed for national security reasons, which include the Section 232 steel and aluminum tariffs, the brief said.

Regardless, even if the trade court were to accept Nippon Steel's claims, CIT still would be bound by the Federal Circuit's precedential opinion in Borusan Mannesmann v. U.S. (see 2303150035), the brief said.

Nippon Steel had argued the Borusan decision was "wrongly decided," adding that it will ask for en banc review of the decision because the Federal Circuit didn't address arguments that all relevant aspects of the statute and the facts on which the duties are based show that the Section 232 duties "do not serve a general revenue purpose but instead serve a special remedial purpose." The exporter also said the Federal Circuit didn't address the fact that Section 232 duties are temporary since they don't require an act of Congress to be removed and that deducting the duties leads to double counting.

The U.S. said that, regarding this first point, "both the Supreme Court and the Federal Circuit have held that Congress, under Section 232, granted the President broad powers to craft the actions necessary to address national security issues caused by imports." Additionally, the Federal Circuit directly addressed the point about double counting, noting that Section 232 and AD duties serve "two different purposes," the government noted.

"Ultimately, this Court does not adjudicate whether en banc review by Federal Circuit is warranted," the brief said. Nippon Steel "provides no basis for this Court to disregard Borusan II, which mandates the conclusion that Commerce’s determinations were lawful."

Nippon Steel's case contests the third review of the AD order on hot-rolled steel flat products from Japan and, in addition to the Section 232 issue, concerns the addition of certain service-related revenues in the exporter's U.S. price. In a recent remand at the trade court, Commerce added these revenues to Nippon Steel's U.S. price, dropping its AD rate from 11.70% to 10.12% (see 2208020024).