Broad Section 232 Steel Tariff Challenge Rejected by CIT

The Court of International Trade on Feb. 4 denied a broad challenge to Section 232 tariffs on steel products (see 1912040033), finding against a group of steel importers that had challenged the initial proclamation that set the tariffs, as well as procedural steps that formed the basis for the action. One of several recent cases challenging the tariffs, this one differed in its focus on the Commerce Department report that preceded the tariffs, as well as the proclamation's failure to set an explicit expiration date. The trade court found in favor of the government on both issues, holding that the Commerce report was not a final agency action that could be challenged in court and that the law behind Section 232 does not require the president to decide a date when the tariffs will end.

“[W]hat cannot be disputed is that if Congress wanted to require that the President proclaim a fixed temporal limit to the measures selected, it could have done so,” the decision said of the proclamation's lack of an end date. “It did not; and it is not the role of the court to direct otherwise. As to Plaintiffs’ concern that the measures imposed could persist indefinitely, the court notes that there is a distinction between the indefinite and the undefined.” The mandate in the proclamation that the tariffs will remain in place “until and unless such actions are expressly reduced, modified, or terminated" was sufficient, CIT said.

The court held that the report was not final because it was advisory and did not directly affect the importers' legal rights. Unlike with Section 301 tariffs, which require action based on the underlying report, Section 232 gives the president the discretion to agree or disagree with the report's findings. Since the president was able to take action that was different from what was recommended in the Commerce report, the findings do not constitute a final agency action, CIT said.

Universal and the other plaintiffs also argued that the language of Section 232 requires an “impending threat" to set tariffs. But CIT held that the congressional mandate for the president to determine what is a threat to national security is broad. “Section 232 ... grants the President latitude in evaluating whether imports threaten the national security,” the decision said. “The statutory language makes clear that the list of factors to be considered in determining whether a threat exists is nonexclusive.”

The decision is "greatly disappointing" to Universal Steel and the other steel importers that filed the case -- PSK Steel Corporation, The Jordan International Company, Dayton Parts and Borusan Mannesman Pipe U.S. -- and "misconstrued the governing statute, among other issues," they said in a statement Feb. 4. "The Court’s opinion is under review, as are the plaintiffs’ options for further action to contest this action, including appeal this decision, which appears to be erroneous in a number of respects," said their lawyer, Lewis Leibowitz.