US nail businesses back Government tariff extension

The American Steel Nail Coalition, which represents the majority of US nail manufacturers, filed an Amicus Curiae brief this week in support of the US Government, which has been trying to prevent a "flood of foreign nail imports" in circumvention of 2018 tariffs on steel.

The Government has appealed a decision last year by the US Court of International Trade that invalidated a presidential proclamation extending the original steel tariffs to nails and other derivative products.

In March 2018, President Trump issued Proclamation 9705, placing 25% tariffs on steel imports from nearly all countries under Section 232 of the Trade Expansion Act of 1962, which gives authority to the White House to respond to trade threats to national security. Then, in January 2020, the President issued Proclamation 9980, which addressed a large increase of imports of steel derivatives such as nails, which were not covered by Proclamation 9705. That increase was a clear circumvention of the original steel tariffs, according to the American Steel Nail Coalition.

Foreign nail makers, including Oman Fasteners, and US distributors, including PrimeSource Building Products, then challenged the extension of tariffs to nails and won favourable judgments last April. The Biden Administration appealed to the US Court of Appeals for the Federal Circuit, to which the American Steel Nail Coalition addressed its Amicus brief today.

That brief made three basic arguments, says the Coalition:

First, "Proclamation 9980 has had a positive impact on the domestic steel nails industry, and thus, on American steel production and capacity utilization generally." After the proclamation took effect, imports of steel derivatives fell 16% compared with the previous year.

Second, a recent precedent "rejects the central legal basis of the Trade Court's decision to invalidate Proclamation 9980." In a July 13 decision in Transpacific Steel, LLC, et al., v. United States, involving an increase in Section 232 tariffs for Turkish steel imports, the court held valid an extension of the original proclamation "beyond the 105-day timeframe for the initial action set forth by the statute."

Third, the Coalition argues that "Proclamation 9980 is not subject to judicial review because Section 232 commits actions to prevent threats to national security, including circumvention of such actions, to the discretion of the President."

In the Amicus brief, the Coalition's counsel, The Bristol Group PLLC, states that the nail organisation and its members "have a substantial interest in the President's ability to ensure the effectiveness of Section 232…, particularly when relief is undermined or stymied by circumvention."

The brief adds: "Over the last 45 years and continuing today, members of the Coalition have made concerted and consistent efforts to defend their industry from repeated surges of unfairly-traded imports, and to ensure that U.S. trade laws are enforced by preventing circumvention of antidumping and countervailing duty orders….

"Indeed, the history of efforts by the U.S. steel nails industry to defend itself from unfairly-traded imports reflects highly analogous behaviors to the circumvention addressed by Proclamation 9980….

"Since 2007, members of the Coalition have been forced to file multiple trade cases in response to surges of imports prompted by foreign producers and importers shifting production to circumvent intended relief. Three sets of cases have resulted in eight AD [anti-dumping] and CVD [countervailing duties] orders on seven countries… Indeed, as recently as December 29, 2021, the industry filed yet another set of trade cases in an effort to curb injurious imports from new sources."

The members of the American Steel Nail Coalition are: Mid Continent Steel & Wire, Inc.; KYOCERA SENCO Industrial Tools, Inc.; Tree Island Wire (USA) Inc.; Specialty Nail Company; Legacy Fasteners, LLC; American Fasteners Co., Ltd.; The Pneufast Co.; Maze Nails; MAR-MAC Industries, Inc.; and Anvil Acquisition Corp.

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