Importers Say ITC Failed to Adhere to CIT Order to Consider Sanctions Impact on Injury Analysis
Importers led by Tenaris Bay City sent comments to the Court of International Trade last week opposing the International Trade Commission's separate decisions to cumulate both Russian and South Korean oil country tubular goods with goods from Argentina and Mexico. Tenaris Bay argued that the ITC improperly interpreted the statute in defining the phrase "compete with," which "uses the present tense and thus denotes" that the goods in question must compete with the like product during the "months leading up to and including vote day" (Tenaris Bay City v. United States, CIT Consol. # 22-00344).
The importer also argued that the ITC's remand decision violates the trade court's order to "consider the impact of sanctions and other trade measures" imposed on Russian imports "during the period leading up to and including vote day." The commission also erred in finding that there was "reasonable overlap of competition" between Russian and goods and imports from Argentina and Mexico, since it essentially required proof of a "full embargo on Russia," the brief said.
Tenaris Bay devoted a segment of its comments to discussing the new standard of review for the case in the wake of the Supreme Court's decision in Loper Bright Enterprises v. Raimondo, which eliminated the doctrine of deferring to agencies' interpretations of ambiguous statutes.
The importer said its suit involves two issues of statutory interpretation, the first of which concerns whether the ITC properly interpreted the phrase "compete with" in its Russian cumulation analysis. The second concerns whether under 19 U.S.C. Section 1677(7), which tells the ITC to analyze the effects of subject imports, the ITC can "continue to rely on information related to non-subject imports" as the "basis for its cumulation analysis in finding material injury." Tenaris Bay said for both issues, the commission's read of the law doesn't deserve deference.
The injury determination covered OCTG imports entered from January 2019 to June 2022. The U.S. imposed sanctions on Russia following its invasion of Ukraine that affected OCTG trade for the last four months of the review period. The ITC said the sanctions didn't impact Russian producers' ability to compete over the entire 42-month review period -- a decision that spawned the legal challenge from U.S. importers led by Tenaris Bay City and exporter TMK Group.
CIT in April sent back the cumulation decisions due in part to the ITC's failure to account for sanctions on Russia (see 2404220036). On remand, the commission found sanctions to not affect its injury determination (see 2408190052). The ITC noted that Russia-origin green tubes could still be imported into the U.S. and processed following the sanctions. The commission also bucked the idea that it had to consider the cumulation factors as they exist on vote day.
On remand, Tenaris Bay said that the evidence shows that the "ability of imports from Russia to compete in the U.S. market fundamentally changed after the sanctions" were imposed "such that there was no longer 'a reasonable overlap of competition' with other imports and the domestic like product." The ITC used the "wrong standard and failed to adhere to the statute," the brief said.
TMK Group filed its own brief, telling the court to reject the ITC's claim that it doesn't need to consider whether the necessary conditions for cumulation existed on vote day. The exporter said the statute requires the conditions to be present on vote day before the ITC can cumulate Russian OCTG goods with goods from other countries.