Trade Cases

Section 232: Rebuttals to Rebuttals

October 17, 2018

U.S. Steel and Nucor made their final rebuttals to tariff exclusion requests filed by Evraz NA and California Steel Industries for imports of steel slab. Evraz and CSI maintain that the slabs they require are not readily available in the U.S. Both U.S. Steel and Nucor argue that exclusions would undermine the president’s policy to protect national security. Rebuttals from Evraz and CSI to objections by domestic mills are “untrue or irrelevant” to Commerce’s analysis and decision, said U.S. Steel.

U.S. Steel and Nucor dispute the claim that due to blast furnace closures over the years, domestic melted and poured slab is not readily available in the U.S.

“Even with these closures, the U.S. industry has 77.2 million tons of steel slab production capacity, compared to only 63.6 million tons of downstream production using slab inputs in 2017,” said Nucor. ”The U.S. industry thus has sufficient capacity to satisfy 100 percent of domestic demand for slab, and this capacity will only increase as the Section 232 response achieves its objective and more U.S. mills restart.”

Nucor contests CSI’s argument that there is a geographical supply limitation for West Coast mills. In 2017, 768,000 tons of slabs from Brazil entered the U.S. through West Coast ports, said Nucor; half that amount is still available duty free under the quota system for Brazil. CSI is also free to continue to import slabs that are under Section 232 tariff, but will “simply need to do so at reasonable prices that will not further erode the U.S. industry’s hot-end capacity.”

Nucor does not supply slab, but argues that downstream products are available as substitutes for slab. “Commerce should therefore focus on whether an exemption for slab is necessary to prevent a shortage of these downstream, substitute products,” said Nucor. “There is no evidence of any shortage of these products in the United States, either from domestic sources or from imports.”

U.S. Steel added that it is willing to increase its monthly supply of slab to CSI and did not limit the contractual volume. CSI is fighting for the exclusion simply because they do not want to pay the 25 percent tariff, said U.S. Steel.

Concluded U.S. Steel: “The Steel Section 232 tariffs are intended to create long-term viability of the domestic steel industry so that the United States does not become reliant on foreign producers to meet its national security needs. It is important for the effectiveness of this measure, and for the protection that it is designed to provide the national security of the United States, that these exclusion requests be denied. If granted, the exclusions for these products would both inhibit the domestic industry’s ability to achieve sustainable capacity utilization rates and undermine the very national security goals that the Section 232 action is designed to achieve.”