The In-House Legal Perspective

on International Trade Issues

Douglas Gunson General Manager of Legal Affairs

Nucor Corporation 17 November 2016

Nucor Corporation

• I am General Manager of Legal Affairs for Nucor Corporation (“Nucor”)

• Nucor is the largest North American-based steel producer and the largest recycler in the Western Hemisphere – 2015 Sales: $16.4 billion – 2015 Production: 17.6 million metric tons – More than 24,000 Teammates – 25 Scrap-Based Steel Mills in the United States – All Nucor mills utilize Electric Arc Furnaces

• Nucor companies also manufacture various steel products: – Structural products (i.e., steel joists and decking) – Fabricated rebar – Engineered buildings – Grating – Foundational products and systems

• Nucor also owns the David J. Joseph Company, one of the largest steel scrap dealers and brokers in North America

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36%

21% 10%

8%

13%

12% Sheet

Raw Materials

Bar

Downstream Products

Structural

Plate

Total Tons Sold to Outside Customers in 2015

Nucor in North America

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Nucor Internationally

• Our Canadian operations include a new structural plant and the country’s largest rebar fabricator

• Our 50% JV in Italy is the largest supplier of after-market track shoes for excavation in the world, the largest supplier of structural beams in Italy, and a supplier of SBQ semi-finished material for automotive and energy markets

• Our JVs in Mexico focus on value-added sheet products primarily for the automotive market

• Our Trinidad subsidiary (Nu-Iron Unlimited) produces Direct Reduced Iron (“DRI”)

• Nucor has brokerage, marketing, and trading operations in Canada, Mexico, China, Switzerland, and the UAE

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Areas of Responsibility

• International trade areas of focus and responsibility: – Countervailing duty (“CVD”) – Antidumping (“AD”) – Safeguards – Customs – Trade policy

• To effectively accomplish this effort, I work closely with our: – Commercial team – Government Affairs team – Outside legal counsel

• This requires that I maintain a substantive knowledge of: – WTO rules and U.S. trade laws – Economics of the domestic and international steel industries – Behavior of markets for individual products

• One way I am able to stay up to date on developments in international trade is by participating in conferences like this one

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Commercial Team

Government Team

Outside Counsel

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Areas of Responsibility - Trade

Int’l Trade

Policy

Making

Nucor and Trade Litigation

• For many years, Nucor was not involved in trade cases simply because the company concentrated on certain segments of the market that were not especially exposed to international competition

• As Nucor grew and expanded its product base, and as the global supply of steel increased, we’ve experienced greater competition from dumped and subsidized imports – For example, a successful case involving beams from Japan

and Korea in the late 1990’s was vital to Nucor’s ability to be competitive in the beams market

• Nucor’s recent expansion internationally has added an additional level of involvement with international trade laws

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Nucor’s Perspective

• The global steel market is intensely competitive, with many efficient producers, so that following the rules is key to the smooth operation of the world steel market

• Nucor welcomes competition on the basis of the internationally agreed-upon rules – These rules also allow countries to remedy

dumping and subsidization that cause injury

• At the same time, Nucor is subject to and is expected to adhere to the same rules in its international activities

• The compensation of all Nucor teammates is based on steel production, so sales lost to dumped and subsidized imports affect all Nucor teammates directly

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The Need for Rules-Based Trade

Imports: Market Intelligence

• Nucor constantly monitors the domestic and international markets for all its products, including:

– Import statistics

– Sales call reports

– Customer input

– Press reports

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10%

15%

20%

25%

30%

35%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

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09

20

10

20

11

20

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20

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14

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15

20

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Total U.S. Imports from World (thousands of metric tons) vs. Percent Finished Import Market Share

Imports: Market Intelligence

• If we see imports in a given product from a country being sold at prices well below market, we discuss internally what further action to take – Nucor has a very high level of expertise about trade remedies

– I act as a resource for information and advice on possible applications of the trade law

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AD/CVD: Moving Forward

• If we decide a particular import situation may need further attention, we may discuss the matter with: – Other industry participants – Outside counsel – Economic consultants

• Trade cases may also have political and industry implications

• Once a decision to bring a case has been made, my role as counsel in trade cases includes – Working with our commercial team to gather the necessary

information – Overseeing outside counsel and economic consultants – Providing advice and decisions on significant legal issues

• Outside counsel primarily conduct the cases, but we remain closely involved at all times

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Other Aspects of AD/CVD

• Court litigation and appeals

• Administrative reviews

• Sunset Reviews

• My role as General Manager of Legal Affairs is to work with and supervise outside counsel in all of these areas

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Customs

• Nucor exports a moderate amount of steel, so we are called upon to:

– Advise on Customs classifications, as needed

– Respond to reports of misclassified imports

– Support U.S. Customs and Border Protection (“CBP”) by providing education and training to CBP officers on steel related issues

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Trade Policy

• At Nucor, we monitor developments in trade policy closely through our Washington office

• Some of the things we follow, and in which our team is engaged, are:

– Changes to the AD/CVD laws

– Customs matters (including tariff classifications)

– International economic agreements

– Developments at the WTO

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Trade Policy

Sources: OECD, World Steel, China Iron & Steel Assn.

Massive Growth of Steel Overcapacity over Last 10 Years (in millions of metric tons) Trade cases are

necessary in the short term

Long term, we must address the underlying problem of excess global steel capacity 0

500

1000

1500

2000

2500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Global Steel Capacity

Global Steel Production

China Steel Capacity

China Steel Production

750 mmt Overcapacity

400 mmt

200 mmt

50 mmt

OECD

High-Level Symposium on Excess Capacity & Structural Adjustment in the Steel Sector

April 18, 2016, Brussels

US-China Steel Dialogue

Addresses Trade Friction regarding Steel May 11-12, 2016, The White House

Engaging Trade Policy

New Products

• Nucor frequently evaluates opportunities to move into new product lines

• This has trade implications as well, including: – Existing import levels

and prices

– Outstanding orders

– Customs issues

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Exports & International Operations

• With our growing international and export profile, we must follow national and international rules regarding exports, including: – Compliance with U.S. export control laws – Compliance with foreign anti-dumping laws

• Nucor has had to become more familiar with the trade laws of the countries of our customers

• Nucor has increasingly been asked to respond to requests for information from foreign governments

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Final Thoughts

• In-house counsel need to be very familiar with the mechanics of domestic and international trade laws

• We actively supervise and participate in trade cases

• We must stay fully abreast of legal and policy developments

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U.S. International Trade Commission Washington, DC

The In-House Legal Perspective

on International Trade Issues

Douglas Gunson General Manager of Legal Affairs

Nucor Corporation 17 November 2016