On July 30, 2019, JSW Steel (USA), Inc. (JSW) filed a complaint against the United States and, specifically, the Department of Commerce (Department) for denying its product exclusion requests for certain steel imports that otherwise are subject to a 25 percent tariff under President Donald Trump’s March 2018 proclamation implementing such tariffs under Section 232 of the Trade Expansion Act of 1962. The complaint seeks declaratory relief from the U.S. Court of International Trade (CIT) determining that the Department’s denial of JSW’s product exclusion requests was arbitrary and capricious, and that the requests should have been granted and ordering the Department to provide JSW a refund of any tariffs paid. Alternatively, JSW asks that the matter be remanded to the Department for proper review and consideration.

While other complaints have been filed at the U.S. Court of International Trade concerning the Trump administration’s Section 232 actions (see Trump and Trade Update dated March 25, 2019), they have unsuccessfully challenged the president’s application of the Section 232 national security provisions to steel imports. Instead, this complaint challenges the administrative process and manner in which the Department’s Bureau of Industry and Security (BIS) reviews product exclusion requests and denied JSW’s request.

The complaint alleges, among other issues, that the BIS “ignored record evidence establishing that the steel slab JSW USA imports is not presently available in the U.S. market, and instead issued the same boilerplate denial to each and every one of JSW USA’s exclusion requests.” In doing so, the complaint alleges, the BIS “yielded to the objections of three competitive domestic steel producers – United States Steel Corporation, AK Steel Corporation, and Nucor Corporation …” and “undertook no effort to verify their claims, ignored the conclusive evidence that these companies are unable to produce the subject products in the required quality or quantity, and failed even to offer any reasoned basis for its decisions.” The resulting denial of JSW’s product exclusion request was arbitrary and capricious or otherwise unlawful in violation of the Administrative Procedures Act, the complaint claims. JSW alleges that the president’s proclamation and the Department’s regulations concerning the review and processing of Section 232 exclusion requests “direct” that an exclusion be granted “for imported steel products that are not immediately available in sufficient quality and quantity in the United States.” JSW references the implementing rule for the Section 232 steel tariffs and exclusion request process in which the term “immediately” means whether the product is currently produced or could be produced “within eight weeks” in the United States in order to support its position that the volumes needed by the domestic steel user described in the exclusion request cannot be satisfied unless the request is granted. Arguing that the Department’s rule places the burden on an objector to show that it can produce a “substitute product” within the requisite timeframe, JSW alleges that the three objectors simply filed blanket objections with no meaningful supporting evidence that they could in fact produce the identified steel products in “a sufficient and reasonably available amount.”

The case is JSW Steel (USA), Inc. v. United States, Court No. 19-00133, before the U.S. Court of International Trade.