Background
Seneca Foods Corp. imported tin-free steel and electrolytic tinplate from various countries between 2020 and 2022. These products were subject to a twenty-five percent tariff under Presidential Proclamation 9705 issued pursuant to Section 232 of the Trade Expansion Act of 1962. The proclamation allows the Secretary of Commerce to grant exclusions if domestic producers cannot supply the steel in a sufficient and reasonably available amount. Seneca submitted eight exclusion requests, each filed months after placing orders with foreign suppliers. The Department of Commerce denied all requests, finding that domestic producers could supply the steel within the time needed. The Court of International Trade sustained Commerce’s determinations after a remand, and Seneca appealed to the Federal Circuit.
The court’s reasoning
The court applied the arbitrary and capricious standard under the Administrative Procedure Act. It found no legal basis requiring Commerce to use the date of the foreign purchase order instead of the date of the exclusion request. The court agreed with the lower court that using the request date keeps the timeliness inquiry consistent across all scenarios and advances the proclamation’s goal of promoting domestic production. The court also noted that Commerce’s reliance on the request date was reasonable and that Seneca’s criticisms amounted to a request to reweigh evidence, which is not permitted under the standard of review.
What it means going forward
The decision reinforces the Department of Commerce’s discretion to set the temporal baseline for exclusion requests under Section 232, ensuring that applicants must demonstrate a lack of domestic supply at the time they seek an exemption rather than at the time they initially ordered goods.
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