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Federal Circuit Says Commerce Can Deduct Trump's Section 232 Duties From US Price in AD Proceedings

The Commerce Department can legally deduct President Donald Trump's Section 232 duties from an exporter's U.S. price in antidumping duty proceedings, raising the respondent's dumping margin, the U.S. Court of Appeals for the Federal Circuit ruled March 15. Judges Richard Taranto, Kara Stoll and Tiffany Cunningham said Trump's proclamation imposing the duties made clear that the Section 232 tariffs were meant to be added to any applicable antidumping duties. However, the appellate court clarified that this ruling only applies to Trump's Section 232 duties and not all presidential action taken under Section 232.

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The “only fair reading” of Trump’s Proclamation 9705 is that the proclamation and antidumping duties “must together result in a full imposition of both duties," Taranto, the author of the opinion, wrote. "Producing that result requires the antidumping duty to be calculated as if the Proclamation 9705 duty did not exist.” Otherwise, the proclamation would be “offset substantially or completely by a reduction in the antidumping duty itself,” Taranto wrote, defeating “the evident 'in addition to' prescription of Proclamation 9705."

The case was brought by respondent Borusan Mannesman to contest Commerce's deduction of Section 232 duties from the exporter's U.S. price as part of the administrative review of the AD order on circular welded pipe and tube from Turkey. The agency said the national security tariffs amounted to regular U.S. import duties, differentiating them from remedial antidumping duties, and the Court of International Trade agreed (see 2201190040).

In upholding the trade court's ruling, the Federal Circuit said that national security tariffs should be counted along with any relevant antidumping duties. Taranto pointed to the proclamation's language, which says that the 25% duty rate, "in addition to any other duties, fees, exactions, and charges applicable to such imported steel articles, shall apply to imports of steel articles from all countries except Canada and Mexico." This language "confirms the evident meaning of this declaration -- that the duty should be charged on top of otherwise determined antidumping duties," the opinion said.

The Federal Circuit also stressed that its decision applied to Section 232 duties under Proclamation 9705 and not all Section 232 actions. Nothing in the law "requires the uniform treatment of all duties prescribed under a particular statutory authorization," Taranto wrote. The judge also said the court was not shown anything in the Section 232 framework "that requires the uniform treatment of all duties imposed by the President under" Section 232.

Taranto added that the court's prior treatment of Section 201 duties doesn't impact this ruling because the decision to exclude the safeguard tariffs from U.S. import duties also relied on that proclamation's specific language.

(Borusan Mannesmann Boru Sanayi ve Ticaret v. U.S, Fed. Cir. #21-2097, dated 03/15/23, Judges Richard Taranto, Kara Stoll and Tiffany Cunningham. Attorneys: Julie Mendoza of Morris Manning for plaintiff-appellants Borusan Mannesmann and Borusan Mannesmann Pipe U.S.; Alan Price of Wiley Rein for defendant-appellee Nucor Tubular Products; Elizabeth Drake of Schagrin Associates for defendant-appellee Wheatland Tube; Robert Kiepura for defendant-appellee U.S. government)