UNITED STATES COURT OF INTERNATIONAL TRADE

Slip Op. 23-07

Before the Court in NLMK Pennsylvania, LLC v. United States, Court No. 21-507, Slip Op. 23-7 (January 23, 2023) was plaintiff’s motion for judgment on the agency record concerning the Department of Commerce’s denial of plaintiff’s requests for certain steel slabs to be excluded from tariffs imposed pursuant to Section 232 of the Trade Expansion Act of 1962, codified as 19 U.S.C. § 1862. “Between July 2020 and November 2021, NLMK submitted 58 exclusion requests for steel slab, all of which were rejected.” Id. at 3. Domestic steel producers objected to all of the exclusion requests. Commerce denied fifty-five of the requests on the basis that domestic suppliers could supply slab which was either identical or a suitable substitute. Three of the requests on the basis that the requests were “ambiguously defined.” For the following reasons the Court remanded Commerce’s determinations for further explanation or reconsideration.

“Commerce’s Section 232 regulations specify that ‘[a]n exclusion will only be granted if an article is not produced in the United States in a sufficient, reasonably available amount, and of a satisfactory quality, or for specific national security considerations.’” Id. at 6-7. “Whether a substitute is suitable depends on the needs of the end user. The ‘end user’ is the party seeking the exclusion. The terminology and examples in the regulations refer to the needs and requirements of the requestor’s ‘business activity’—not the demands of the requestor’s clients.” Id. at 7. The Court held in all of the denials, “Commerce conflates the needs of NLMK, as the end user, with those of NLMK’s customers. This mistake alone warrants a remand because the regulations make clear …  that the requestor is the end user and Commerce must assess the substitute with reference to the quality needs of the end user.” Id. at 11. In addition, the Court noted other issues that required addressing on remand. Such as, the use of an unidentified subject matter expert, an unproduced report by the unidentified expert, a failure to address evidence which runs contrary to its decision regarding the ability of domestic suppliers to produce the items at issue in the exclusions. As such, the Court remanded the exclusion requests to Commerce for further explanation or reconsideration.