Commerce Properly Focused on Current US Availability in Denying Section 232 Exclusions, US Says
The Commerce Department appropriately focused on the current availability of domestic steel as opposed to the availability at the time an importer placed a foreign order when considering Section 232 exclusion requests, the U.S. argued. Filing a reply brief at the U.S. Court of Appeals for the Federal Circuit, the government said the focus on current availability is in line with the "purpose of the Section 232 import measures," which are meant to "increase and improve domestic capacity over time" (Seneca Foods Corp. v. United States, Fed. Cir. # 25-1310).
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Importer Seneca Foods "made the business decision" to order from foreign suppliers months prior to submitting exclusion requests, thus "assuming the risk of having to pay the 25 percent tariff if the then-unsubmitted exclusion requests were not granted," the U.S. said. The brief added that the record supports Commerce's rejection of the exclusion requests.
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 (see 2502250039). The importer said it bought as much as it could from domestic suppliers, confirmed these companies had no additional capacity, then requested exclusions to cover the same purchase orders. The U.S. industry thus made as many sales to Seneca as it chose, the importer said.
In response, the government defended Commerce's decision to focus on evidence of the U.S. industry's capacity at the time the exclusion requests were submitted. The U.S. said "Seneca offers no regulation, agency practice, or other authority to support its contention that Commerce must measure availability based on the time that Seneca placed its foreign orders."
The government added that it's precisely because "domestic capacity utilization is expected to increase and improve with time," the agency's exclusion process "considered the most current situation of the capabilities of domestic steel manufacturers."
The U.S. also sought to defend the evidentiary basis of Commerce's decisions, arguing that the objector, U.S. Steel, gave "certified statements and confidential business information indicating its availability." The only evidence Seneca offered to rebut these claims, "three emails," was "stale and largely irrelevant," the brief added.
For instance, one email was written by Seneca and said that U.S. Steel wasn't offering anything at any price. The government said Commerce "afforded no weight" to the email, since it didn't indicate that the product was the same one for which Seneca requested any exclusion, and it was "stale," since it was filed nearly a year before Seneca filed its exclusion requests. Commerce was properly within a "zone of reasonableness" in finding the internal email that discussed U.S. Steel's availability "right now" gave no "probative value in determining U.S. Steel's ability to produce and deliver steel nearly a year later."