Background on Section 232 Aluminum and Steel Tariffs
Section 232 investigations, administered by the U.S. Commerce Department, are conducted to determine the imports of certain goods on national security. Historically, Section 232 investigations have been conducted regarding U.S. imports of crude oil and petroleum products and uranium, among other critical imports. Under the Trump administration, the Commerce Department initiated investigations of U.S. imports of aluminum and steel on April 27, 2017. The investigation resulted in an affirmative determination that such imports harm U.S. national security. As a result of the investigation’s findings, Trump imposed tariffs on certain U.S. imports of aluminum and steel on national security grounds. An exclusion process was also implemented in which U.S. importers could apply for tariffs to be excluded for certain steel and aluminum product imports.
USCIT Invalidates Certain 232 Tariffs
On April 5, 2021, the U.S. Court of International Trade (“USCIT”) ruled in Primesource Building Products Inc., v. United States that Proclamation 9980 signed by President Trump on January 24, 2020, was invalid because of its failure to comply with statutory time limits. Proclamation 9980 subject certain steel and aluminum derivative products to 25% tariffs under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862).
The USCIT held that the President’s failure to submit the action to Congress within a 75-day period of his receipt of the Section 232 recommendation, and the President’s failure to issue an individualized notice of investigation declaration within a 60-day period from his receipt of the Section 232 recommendation, failed to comply with Article I and Section 12 of the U.S. Constitution and Sections 11 & 12 of the US Tariff Act. The U.S. Tariff Act provides that in every action, the President must act in accordance with constitutional limitations on his power.
The USCIT’s invalidation of the 25% tariffs on certain steel and aluminum derivatives is seen as a judicial blow to President Trump’s Section 232 actions. The Proclamation was issued as a result of the United States Department of Commerce’s (“DOC”) findings in February 2018 that reliance on aluminum and steel imports threatened to impair national security interests. Based on DOC’s recommendations, the President imposed the 25% steel and aluminum tariffs under Section 232 of the Trade Expansion Act of 1962.
The U.S Government has up to 60 days, or until June 4, 2021, to file an appeal of the ruling with the Federal Circuit Court of Appeals. The USCIT held that entries affected by this litigation be liquidated without the assessment of duties, with refund of any deposits for such duty liability that may have been collected pursuant to Proclamation 9980.
Limitation of Ruling
This decision on steel and aluminum derivative imports does not affect the original Section 232 tariffs placed on aluminum and steel pursuant to Proclamations 9704 and 9705 effective March 23, 2018. Those Proclamations were upheld in the case of American Institute for International Steel v. United States by both the USCIT and the U.S. Court of Appeals for the Federal Circuit.
Diaz Trade Law has significant experience on Section 232 related matters. If you require assistance understanding how Section 232 tariffs on the latest USCIT decision affects you, reach out to us today at email@example.com or 305-456-3830.