US CIT Declares Section 232 Steel Tariffs on Derivatives Invalid
International Trade Insights reported that the US Court of International Trade ruled in an opinion issued on April 5, 2021, that Proclamation 9980 subjecting steel and aluminium “derivatives” to 25 percent tariffs under Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862) is invalid because of a failure to comply with statutory time limits. The Court concluded that Proclamation 9980, which was issued by President Trump and based on the theory that the President had the power to issue the Proclamation based on earlier findings on different products, was void from the outset because it came too late and had no independent basis. As the CIT states in its opinion regarding the inability to rely on an earlier finding regarding different products: “Because the President issued Proclamation 9980 after the congressionally-delegated authority to adjust imports of the products addressed in that proclamation had expired, Proclamation 9980 was action outside of delegated authority.”
The Court’s order stated that, as a result, Plaintiff PrimeSource Building Products Inc is to have all its entries that were affected by Proclamation 9980 refunded, whether they were liquidated or unliquidated. This was a result of the derivatives duties being invalid from the outset. The CIT is now likely to act on the parallel challenges to the Section 232 derivative tariffs and issue similar findings. We expect consultations among the parties and with the Court to proceed soon.
This decision does not affect the original Section 232 tariffs placed on aluminium and steel pursuant to Proclamations 9704 and 9705 effective March 23, 2018. Those Proclamations were upheld by both the CIT and the U.S. Court of Appeals for the Federal Circuit and were issued in a timely manner.