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US Company Calls on CIT to Order CBP to Respond to Info Requests Over Section 232 Evasion

The Court of International Trade should compel CBP to respond to Wheatland Tube's request for information and request for a tariff classification ruling over certain electrical conduits from Mexico, Wheatland Tube told the Court of International in a Jan. 12 complaint. Seeking a writ of mandamus in a motion filed concurrently with the complaint, Wheatland alleges that certain importers, namely Shamrock Building Materials, are mis-labelling their imports to qualify for an exception to Section 232 steel and aluminum duties (Wheatland Tube Company v. United States, CIT #22-00004).

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At issue are two Harmonized Tariff Schedule subheadings for tubing. The Section 232 duties apply to HTS subheading 7306.30.5028, which provides for welded tube “Internally coated or lined with a non-electrically insulating material, suitable for use as electrical conduit.” However, the duties do not apply to subheading 8547.90.0020, which provides for electrical conduit tubing “of base metal lined with insulating material.”

In 2018, Shamrock began importing electrical conduit from Mexico that it allegedly misclassified under the 8547.90.0020 subheading to avoid paying the duties, Wheatland Tube said. In 2019, though, the U.S. and Mexico struck an agreement eliminating the Section 232 duties. However, in 2020, the U.S. and Mexico held consultations to address recent surges in Mexican imports in three steel products. As a result, Mexico agreed to use a strict export licensing system for certain products, among which were goods brought in under subheading 7306.30.5028.

Wheatland Tube alleges that two months after this licensing regime was put in place, Shamrock began importing electrical conduit from Quality Tube in Mexico, misclassifying their goods as being under HTS subheading 8547.90. Importer Liberty Products is guilty of the same, the complaint said. These actions are borne out in monthly trends in imports of conduit subject to Section 232 measures under 7306.30.5028 and 8547.90.0020, Wheatland tube said.

Wheatland Tube brought its findings to CBP, filing a request for information and petition for tariff classification ruling. CBP did not answer. The plaintiff now alleges that CBP is violating its statutory requirements to respond to the requests. "Instead, Customs sent a letter to Plaintiff on April 9, 2021 that takes Plaintiff’s requests out of context in an attempt to invoke the Trade Secrets Act, 18 U.S.C. § 1905, and its own regulations, 19 C.F.R. § 177.7(b), to provide cover to its lack of action," the brief said.

In response, CIT should force CBP to respond, the complaint said. "Given that the misclassification of imports of steel conduit pipe allows import volumes in excess of historical levels, contrary to the agreement between Mexico and the United States, the failure of Customs to respond to Plaintiff Wheatland’s December 11, 2020 19 U.S.C. § 1516(a)(1) request for information and Plaintiff’s January 7, 2021 19 U.S.C. § 1516(a) petition for tariff classification ruling is unreasonable."