Importer Tells CAFC Its Approach to Section 232 Exclusions Realizes President's Aims
Steel importer Seneca Foods Corp. urged the U.S. Court of Appeals for the Federal Circuit on Feb. 21 to overturn the Commerce Department's rejection of its Section 232 steel tariff exclusion requests, claiming its approach to exclusion requests "sought to ensure that the President's aims" in imposing the tariffs "would be fully realized." Seneca said the fact that U.S. Steel Corp., which objected to Seneca's requests, "declined to supply the very same volumes for which Seneca sought exclusions should be dispositive" (Seneca Foods Corp. v. United States, Fed. Cir. # 25-1310).
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Seneca said the volume of imports it sought exclusions for weren't available from U.S. Steel "immediately, or at any relevant time, to meet Seneca's specified business activities." If the goal of the tariffs is to "ensure an opportunity for the domestic industry to increase its capacity utilization," letting U.S. Steel refuse sales to Seneca and block exclusions "for orders it had declined would be irrational," the brief said.
The Court of International Trade last year upheld Commerce's rejection of Seneca's eight exclusion requests, finding that the rejections were backed by substantial evidence and in line with agency practice (see 2410240029). The trade court also upheld the agency's focus on "prospective evidence of steel production," finding it to be in line with the tariffs' "stated purpose and expected fact" of allowing U.S. steelmakers to reach 80% domestic production capacity.
In its opening brief to the Federal Circuit, Seneca detailed its approach to requesting Section 232 exclusions. The importer said it bought "as much tin mill steel as possible from domestic producers," confirmed the U.S. producers had "no further availability," ordered imports to make up for "any shortfall and then — before any shipments arrived — requested exclusions explicitly to cover those very same purchase orders." Under this approach, "the domestic industry made as many sales to Seneca as it chose," the brief said.
Seeing as the unavailability of domestic options for the orders was "not in dispute," Commerce didn't need to "speculate about future availability or assess competing claims," the brief said. The process includes "no risk of an objector blocking an exclusion, then refusing to supply the requester," nor is there a risk of a requester seeking exclusions for products "that later prove unnecessary," Seneca argued.
Despite Seneca's approach, U.S. Steel "conceded that it had nothing to offer when Seneca placed the covered purchase orders," yet still objected to Seneca's exclusion requests, the brief said. And while Commerce said it takes "specific factual details" on the quantity and timeliness of U.S. capacity into account, the agency "entirely ignored Seneca’s arguments and evidence, and never evaluated availability at the time of the purchase orders and deliveries covered by Seneca's requests," the brief said.
The agency instead "donned blinders and assessed availability during future time frames of no relevance to the orders or deliveries that Seneca certified the exclusions would cover," the brief said. Even using a "prospective analysis of availability," the agency should have granted the exclusions, since evidence was presented showing "persistent unavailability" from U.S. Steel, the brief said.