NLMK’s US operations sue US Steel for $100 million, damages over tariffs

NLMK’s US operations are suing US Steel for a minimum of $100 million alleging anticompetitive, unfair and unlawful trade practices surrounding its tariff exclusion requests, according to court documents obtained by S&P Global Platts on Jan. 26.

The lawsuit filed on Jan. 22 claims US Steel’s practices inflicted more than $100 million in damages on NLMK as it “successfully engaged in a pattern of misrepresentation and deception in order to induce the United States Department of Commerce to deny NLMK tariff relief to which it was entitled, all for the purpose of placing NLMK at a competitive disadvantage.”

NLMK’s US operations in Pennsylvania and to a lesser extent Indiana rely on the importation of semi finished steel products to further process into finished steel coil. In 2018, those imports became subject to 25% tariffs as a result of former President Trump’s trade policy.

After the wide-sweeping tariffs were put into place, the US Department of Commerce provided companies the ability to apply for tariff exclusions based on two criteria: A lack of sufficient US production capacity of comparable products or specific national security-based considerations.

NLMK filed 162 exclusion requests from the tariffs for its semi-finished steel slab, according to the lawsuit. The company states US Steel “lacked any legitimate basis” to object to its requests as it is a direct competitor. US Steel “could not and would not” supply NLMK with the slab it needed, according to the document.

In addition, NLMK alleges US Steel misled the US Commerce Department with its representation of its production capabilities for the product.

“NLMK has thus been forced to pay nearly $200 million in tariffs from which is should have and would have been exempt, but for US Steel’s dishonest and anticompetitive misrepresentations. US Steels submission of false representations to support its objections were intended to, and in fact did, inflict significant competitive harm on NLMK, in violation of Pennsylvania law,” the company said.

In response, a US Steel spokeswoman said the company “does not provide the Department of Commerce false information.”

“We objected to NLMK’s exclusion requests based on our ability to mine, melt, and pour steel slabs in the USA — which we currently do and could do much more with idled blast furnaces in Michigan and Illinois. Other domestic steelmakers made similar objections. The Department of Commerce—not U. S. Steel—rightfully denied NLMK’s repeated requests,” added the company spokeswoman in an email to Platts.

Despite usual practice of not commenting on pending litigation, US Steel said the lawsuit was “challenging the very principles we live by … We are committed to American manufacturing, American jobs and American steel.”

— Michael Fitzgerald, Justine Coyne