CIT Upholds ITC's Cumulation of Australian Steel Products in Five-Year AD Sunset Review
The Court of International Trade on Aug. 1 said the International Trade Commission didn't establish an agency practice of considering U.S. investments by foreign producers as a distinctive condition of competition for cumulation analyses. Judge Gary Katzmann rejected exporter BlueScope Steel's claim that the ITC departed from its past practice in cumulating Australian hot-rolled steel exports with other nations' shipments as part of the five-year sunset review of the antidumping duty order on the steel goods.
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Katzmann went on to find that the cumulation decision, and by extension the five-year sunset review, was backed by substantial evidence.
In claiming that the ITC had established a past practice of considering U.S. investment by foreign exporters as a competition condition, BlueScope cited three prior determinations from the commission. Katzmann said these three decisions "do not add up to an established practice." Each case deals with "unique interactions of the economic variables the Commission considers," the judge said.
While the ITC can consider U.S. investment as a relevant factor in assessing factors of competition, "such consideration reflects the Commission’s 'exercise of discretion on a case-by-case and fact-specific basis,' which 'complicates any efforts to divine rules from past agency practice,'" the judge said. The court said the cases cited by BlueScope don't support the claim that the ITC "uniformly treats U.S. investment -- even at a large scale -- as a factor whose existence compels a finding of differing conditions of competition."
The exporter said the ITC's practice is not to cumulate where a foreign exporter makes significant investment in U.S. production of the very good at issue after the AD order is issued, changing the economic incentives regarding future exports to the U.S. Katzmann said this take "assumes that investments of this kind categorically distinguish their investors from other producers of subject merchandise,"
But, hypothetically, "where such investments are the norm," a producer's investment would stand as a "similar condition of competition," cutting in favor of cumulation, the judge said. The court said the analysis "naturally resists the identification of specific attributes that tend towards cumulation.”
Katzmann then considered BlueScope's evidentiary claims against the cumulation decision. For instance, the ITC said BlueScope's capacity limits and contractual obligations wouldn't disincentivize future hot-rolled steel imports, and, in response, the exporter said the ITC erred in assessing the company's practical ability to make the subject goods in Australia for export. The company said the ITC's reasoning "does not exist."
Katzmann said this claim elides the commission's "extensive discussion of the topic of BlueScope’s production efforts in its analysis of the no-discernable-adverse-impact element of the cumulation determination.” The ITC found the AD order to have a "restraining effect" on Australian exports.
BlueScope also said the ITC mistakenly said post-revocation exports of hot-rolled steel to the U.S. would likely exceed the amount the company is obligated to provide under a deal with its U.S. affiliate Steelscape. While the ITC and BlueScope disagreed on the effect of the Steelscape supply deal, Katzmann said it's "unnecessary to decide whose interpretation prevails," since the ITC "reasonably found that BlueScope's sales to Steelscape" amount to "market-expoed sales of subject merchandise to a U.S. buyer."
The court said the record, which includes a declaration from Steelscape's supply chain manager, supports the ITC's claim that sales to Steelscape don't constitute sales for internal consumption. The U.S. affiliate is not a mere "offshoot of BlueScope," evidenced by the declaration and a "market-based pricing formula" that governs the sales between the two parties, the judge said. While the formula and affiliation could "in some sense" differentiate BlueScope's U.S. sales from other cumulated producers, a "reasonable mind might accept" the facts to find that any such difference is "immaterial," the court said.
In the decision, the court noted that the ITC failed to cite the Steelscape employee's declaration and mis-cited two references in its analysis, describing the errors as "troubling." However, Katzmann said the errors aren't "fatal," given that the declaration is part of the record and the commission's reliance on the declaration can be "'reasonably discerned' from context."
(BlueScope Steel v. United States, Slip Op. 24-88, CIT # 22-00353, dated 08/01/24; Judge: Gary Katzmann; Attorneys: Daniel Porter of Curtis Mallet-Prevost for plaintiffs led by BlueScope Steel; Michael Haldenstein for defendant U.S. government; Maureen Thorson of Wiley Rein for defendant-intervenor Nucor Corp.)