PrimeSource Building Products, Inc., a U.S. importer of various steel derivative products, filed a complaint (subsequently amended) in the U.S. Court of International Trade (CIT) on February 4, 2020, arguing that President Donald Trump’s Proclamation No. 9980 is unlawful and unconstitutional. This proclamation expanded the implementation of steel and aluminum tariffs under Section 232 of the Trade Expansion Act of 1962 and directed the secretary of commerce to adjust these tariffs to also apply to certain steel and aluminum derivatives beginning on February 8, 2020 (see Trump and Trade Update of January 28, 2020). The complainant alleges that:

  • The imposition of Section 232 duties on these derivative products is procedurally deficient because the Department of Commerce failed to provide reasonable notice to the public or hold public hearings and thus failed to follow statutory and regulatory procedures for a Section 232 investigation;
  • The implementation of these duties occurred 638 days after the statutory time period for such an action lapsed;
  • In providing “assessments,” “determinations” and “information” to the president on specific Harmonized Tariff System subheadings subject to additional Section 232 duties, the secretary of commerce violated all of the Section 232 statutory provisions;
  • PrimeSource was deprived of its Fifth Amendment due process constitutional rights; and
  • Section 232 is unconstitutional because it represents an unlawful delegation of legislative authority from Congress to the president.

In addition to its complaint, PrimeSource filed a motion seeking a temporary restraining order (TRO) to halt the duties during the lawsuit. After three days of telephonic hearings and negotiations on the TRO, CIT Chief Judge Timothy Stanceu had yet to rule on PrimeSource’s motion. Instead, the original TRO motion was withdrawn and a new TRO motion was filed on February 12, 2020. In its new motion, instead of seeking a broad restraining order to halt the collection of duties on all affected imports of steel and aluminum derivative products, PrimeSource narrowed the scope to cover only its own imports. Counsel for the Department of Commerce did not consent to any injunctive relief but detailed in its own filing the amount of security U.S. Customs and Border Protection (CBP) would consider necessary to protect the United States and offered two options should the CIT enter any order restraining CBP from collecting duties from PrimeSource pursuant to Proclamation No. 9980.

On February 13, 2020, Judge Stanceu issued an order that the parties had agreed on the terms of an injunctive order that could be entered upon mutual consent and without the Department of Commerce admitting that PrimeSource has “demonstrated a likelihood of success on the merits.” This removed the need for Judge Stanceu to rule on the merits of the pending, but to be withdrawn, TRO motion. As a result, the parties have agreed under the order to an injunction barring CBP from collecting Section 232 tariffs on PrimeSource’s imported steel derivative products. The order also sets bonding requirements until CIT enters a final judgment in the case.

The case is PrimeSource Building Products Inc. v. United States et al., case number 1:20-cv-00032, in the U.S. Court of International Trade.