Transpacific Plaintiffs to Petition SCOTUS Over Decision Permitting Post-Deadline Section 232 Action

A key U.S. Court of Appeals for the Federal Circuit decision that found that the president can impose greater Section 232 national security tariffs beyond the 105-day deadline for action laid out in the statute is being appealed to the U.S. Supreme Court. Transpacific Steel, Borusan Mannesmann and The Jordan International Company filed a petition Nov. 12 in an attempt to get the high court to side with the original Court of International Trade decision, which held that the president may not make such adjustments.

The landmark decision came in a case, Transpacific Steel v. U.S., over President Donald Trump's August 2018 tariff hike on Turkish steel, from 25% to 50%. The Court of International Trade ruled against the increase, finding that it came after the relevant deadline. Under 19 USC 1862, the president must decide whether to impose tariffs 90 days from a Commerce Department report on the need for such restrictions, then must implement the tariffs within 15 days (see 2007140046).

A three-judge panel at the Federal Circuit, however, overturned the decision, finding that as long as the tariffs continue their original purpose as laid out in the Commerce report, the president has the authority to hike tariffs as he or she pleases (see 2107130059). Seeing as the original purpose of the Section 232 steel and aluminum tariffs was to bolster domestic capacity utilization of steel and aluminum, any further tariffs beyond the deadline meant for this purpose are not in violation of the law, the majority said.

Before the SCOTUS petition, the plaintiffs moved for a full court rehearing at the Federal Circuit in an unsuccessful bid to overturn the majority's decision (see 2109270019). The plaintiffs argued that the panel failed to impose the congressionally mandated limitations to the president's power in Section 232. The motion was denied in September.

If the Supreme Court takes up the Transpacific case, it could affect other cases challenging the extent of the president's authority to issue tariff action. For instance, there are multiple separate lawsuits also fighting against the president's violation of statutory time limits when expanding Section 232 tariffs that are looking at Transpacific very closely. In a case brought by Oman Fasteners and Huttig Building Products, the question now is whether tariff action taken beyond the 105-day deadline is more beholden to statutory time limits if it expanded the tariffs onto new items as opposed to merely hiking the rate on items already subject to the restrictive measures (see 2110150029).

In the petition, the plaintiffs continue to argue that the Federal Circuit decision fails to grant Congress' express limits on the president's authority under Section 232, and that Section 232 is in fact an unconstitutional delegation of legislative power if looked at through the Federal Circuit's interpretation. To make this case, the plaintiffs cited the Algonquin case, which said that Section 232 is not an unconstitutional delegation of power since it has clear preconditions.

"The decision of the Federal Circuit in this case is fundamentally at odds with this view of section 232," the petition said. "By reading out of the law the express limitation that the President may determine to take action to adjust imports only within ninety days after receiving the Secretary’s findings and recommendations, and must implement that action within fifteen days, the Federal Circuit majority has eroded the significance of the Secretary’s investigation and report to the degree that it can no longer plausibly be said to serve as a meaningful limitation on the President’s otherwise nearly unfettered discretion to set tariffs and impose other import restrictions under section 232."

This interpretation of Section 232 effectively gives the president "carte blanche" to put in any trade-restrictive measures he sees fit. Crucially, "These additional measures could be announced tomorrow, or in ten years, at the President’s sole discretion and without undertaking any of the procedural steps Congress mandated in section 232," the brief said. "... Given the absence of any language in section 232 that places meaningful limitations on either the trigger for action (a threat to “national security”) or on the remedy that may be imposed, and in view of the Federal Circuit’s holding that even the express time limits that are in the statute do not preclude the President from acting outside those limits, the Court should grant review to determine whether section 232 is constitutional."