Importer Accuses Commerce of Ignoring Evidence to Deny Tariff Exclusion Requests for Years

Importer California Steel Industries said evidence from previous years shows that domestic producer U.S. Steel can’t supply it all of the steel it needs in its claim that the Commerce Department again ignored such evidence in its recent redetermination upon remand (see 2404090067). At one point, the importer even alleged the government went back to an earlier redetermination and added a word in to imply it had considered something it hadn’t.

U.S. Steel’s certification that it can provide California Steel enough steel by itself is one “U.S. Steel has been making, and Commerce has been slavishly accepting, for over six years,” it said.

The department’s redeterminations of its exclusion decisions from 2018 were flawed because, despite what U.S. Steel claimed, it could not “immediately” provide the steel California Steel needed within the timeliness requirements set by statute, the importer said.

That year, the producer told California Steel directly that it couldn't make the steel the importer needed “immediately available,” i.e. within eight weeks, it said. Whatever U.S. Steel’s capacity had been that year, “it could not translate that so-called capacity into slab deliveries” to California Steel in a timely fashion, it said.

“Neither Commerce in the Redeterminations, the Government in its Response, nor U.S. Steel as Amicus, addresses this fact at all,” it said. “But the fact is dispositive.”

It said that meant that, “at a minimum,” Commerce had been required to grant California Steel’s tariff exclusion requests for the remaining amount it would have needed that year.

This was analogous to the case Seneca Foods Corp v. U.S., remanded in October 2023 after CIT Judge Gary Katzmann said U.S. Steel’s past inability to fulfill steel orders for tin mill manufacturer Seneca Foods, and Commerce’s reliance on a present certification from U.S. Steel despite that, “raises broader questions about the administration of steel tariff exclusions” (see 2310180052).

The government is trying to distinguish Seneca Foods from California Steel’s case because “U.S. Steel was unwilling to even give [Seneca] a quote for tin mill products due to its inability to supply any additional material,” but Seneca Foods “is directly on point,” California Steel said.

“That is a distinction without a difference because the same is true here,” it said. “U.S. Steel never gave CSI a quote for” the tonnage of steel slabs it needed in 2018, and its admission that it couldn’t do so “is analogous to the situation in Seneca,” it said.

The department’s redeterminations of its 2020 decisions relied on promises by U.S. Steel that the producer couldn’t keep due to pre-existing commitments, California Steel said. That year, the importer had only been seeking to import the remaining tonnage of slab it needed after purchasing the rest domestically and from tariff-exempt sellers abroad -- 425k MTs. That number “already accounted for the amounts U.S. Steel had made available” to it, it said.

It said that, that year, “the record was equally clear that U.S. Steel could not provide” that additional 425,000 MTs of slab after having already sold California Steel 432,000 MTs. The steel producer was even idling capacity at the plants it had used to make the steel it had already sold the importer, California Steel said.

“The notion that, after idling this capacity, U.S. Steel would somehow be able to double its annual slab output is simply not credible,” it said.

But the department “never even addressed the issue, let alone any of the evidence set out above,” it said. “Instead, the Government is now attempting to defend Commerce’s omissions by arguing that the agency was free to ignore CSI’s evidence and by also claiming that Commerce considered evidence that it plainly did not.”

The government claimed that California Steel hadn’t intended to purchase any further steel slab from U.S. Steel that year; that was false, as the importer was “in discussion with U.S. Steel” regarding exactly that, and had been told by the producer that it could only meet 30% of the importer’s remaining needs, it said.

The U.S. also claimed that Commerce “considered and rejected” evidence showing that U.S. Steel was incapable of meeting California Steel’s needs, the importer said. It said that “Commerce did no such thing.”

“Indeed, to make that post hoc argument, the Government literally had to rewrite the Redeterminations by inserting the word ‘idled’ into them,” it said. “The effort, albeit creative, cannot save Commerce.”

California Steel also said that the department had attempted to argue that the importer hadn’t met the burden of proving U.S. Steel couldn’t meet the statutory timeliness requirement that year, but it's actually U.S. Steel who bears that burden.

It also said it had provided proof of past delivery issues, calling them not dispositive but “probative of future delivery problems.” But Commerce, it said, had “brushed the evidence aside.”