United States: CIT Declares Section 232 Steel Tariffs On "Derivatives" Under Proclamation 9980 Invalid And Contrary To Law

The U.S. Court of International Trade ("CIT" or "the Court") ruled in an opinion issued on April 5, 2021, that Proclamation 9980 subjecting steel and aluminum "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 aluminum 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.

Husch Blackwell continues to monitor the Section 232 tariffs on steel and aluminum and will provide further updates as they become available. Should you have any questions or concerns, please contact our International Trade and Supply Chain team.

Originally published 5 April 2021.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.