​India’s JSW Steel disputes Section 232 steel tariff product-exclusion process

31 July 2019 7:10pm
manufacturing steel worker

30 July 2019. By Kat Lucero.

JSW USA’s product-exclusion request from the 25 percent national security tariff on steel imports was mishandled by the Commerce Department, Indian manufacturer JSW Steel’s American unit said in a complaint filed today at the Court of International Trade.

The company is the first to challenge the department over the exclusion process, set up last year to help ease the financial burden of domestic firms that rely on imports not available domestically. Companies, however, have complained about the slow and cumbersome process since it was established.

The complaint is among the handful of challenges piling on against the Trump administration's overall steel tariff action, imposed for national security purposes under Section 232 of the Trade Expansion Act.

Government watchdog group Cause of Action also filed a suit in October 2018 against the department for failing to turn over public documents related to trade tariffs and tariff exemptions under the Freedom of Information Act.

In today’s complaint, JSW Steel said the Commerce Department’s handling of the applications was “arbitrary, capricious, and an abuse of discretion” and violated the Administrative Procedure Act, which governs the federal agencies’ promulgation of regulations.

The company relies on steel slab imports from India and Mexico. In April 2018, the company first filed six requests for the imports from its parent company in India. A month later, it filed six requests from Arcelor Mittal’s Mexico unit.

The Commerce Department, however, rejected those applications, yielding instead to objections from three American rivals — US Steel Corp., AK Steel and Nucor.

In doing so, the department “ignored the record evidence establishing that the steel slab JSW USA imports is not presently available” in the domestic market and “instead used the same boilerplate denial” to each of the company’s requests, the complaint said.

JSW USA argued the department took no effort to verify its claims and failed to even offer any reasoned basis for its decisions. The department “effectively abandoned the standards” established in the tariff order and its own regulations, thereby depriving the company of its right to due-process and fair treatment.

The Commerce Department declined to comment when MLex inquired about the new complaint.

JSW Steel is publicly traded on the Bombay Stock Exchange and National Stock Exchange of India.