In response to these tariffs, the American Institute for International Steel, Sim-Tex and Kurt Orban Partners brought suit before the United States Court of International Trade, challenging the imposition of Section 232 duties.

In our March 16, 2018, Alert, “Is Your Business Prepared for New Tariffs on Aluminum and Steel, Effective March 23?” we advised that on March 15, 2018, Presidential Proclamations 9704 (aluminum) and 9705 (steel) were published in the Federal Register.

Effective March 23, 2018, additional duties of 25 percent ad valorem for steel articles and 10 percent ad valorem for aluminum articles were imposed upon goods entered into or withdrawn from warehouses for consumption on and after that date. Certain countries were excluded from the scope of the proclamations, based upon various agreements (quotas, etc.).

These rates are in addition to any other duties, fees, exactions and charges applicable to such imported products.

In response to these tariffs, the American Institute for International Steel, Sim-Tex and Kurt Orban Partners brought suit before the United States Court of International Trade (USCIT), challenging the imposition of Section 232 duties. The plaintiffs, via a motion for summary judgment, sought a declaration that Section 232 of the Trade Expansion Act of 1962 contains an impermissible delegation of legislative authority in violation of Article 1, Section 1, of the U.S. Constitution and the doctrine of separation of powers.

The defendants—the United States and the commissioner of Customs and Border Protection (CBP)—opposed, relying upon Supreme Court precedent that Section 232’s standards are “clearly sufficient to meet any delegation doctrine attack.”

Additionally, the U.S. and CBP argued that the statutory scheme supports and satisfies the “non-delegation” doctrine.

The three-judge panel of the USCIT rejected the plaintiffs position, denied summary judgment and granted the defendants’ motion for judgment on the pleadings. (Judge Claire R. Kelly delivered the opinion for the USCIT and was joined by Judge Jennifer Choe-Graves, with a separate dubitante opinion written by Judge Gary S. Katzmann.)

By way of background, Section 232 authorizes the secretary of Commerce to commence an investigation “‘to determine the effects on the national security of imports’ of any article,” USCIT found. The investigative/administrative process is defined by statute and related regulations. In this respect:

Upon the investigation’s completion or within the timetable provided, the Secretary of Commerce must provide the President with a report of the investigation’s findings, advice, on a course of action, and if the Secretary determines that the article under investigation “is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,” advise the President of that threat.

The USCIT, in siding with the defendants, noted that Supreme Court precedent does not support the claims advanced by the plaintiffs. The USCIT also noted that the statutory process governing Section 232 cases (i) implicates presidential discretion; (ii) empowers the president to agree or not agree with the secretary’s findings as to whether an article under investigation constitutes a threat to national security; (iii) and allows the president to decide the nature and duration of the action that must be taken to elevate the threat to national security.

It is reasonable to expect that the decision and judgment of the USCIT will be appealed. Parties adversely impacted by the imposition of the additional aluminum and steel tariffs should consult with their legal advisors regarding any steps to be taken to protect their rights.

For More Information

If you would like further information about this Alert, please contact Brian S. Goldstein, any member of the International Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.