On April 21, 2020, Thyssenkrupp Materials NA, Inc., and several of its related operating divisions filed a complaint in the U.S. Court of International Trade (CIT) against the United States alleging that the federal government’s administration of Section 232 aluminum and steel duties is unconstitutional. Thyssenkrupp is a Michigan-based importer of aluminum and steel products that has paid additional duties on imports of these articles since President Donald Trump first implemented the tariffs pursuant to Section 232 of the Trade Expansion Act of 1962. On March 8, 2018, Trump issued presidential proclamations imposing an additional 10 percent duty on specific aluminum products and an additional 25 percent duty on certain steel products (see Trump and Trade Update of March 8, 2018). In issuing implementing regulations and instructions for submitting Section 232 exclusion requests, the Department of Commerce (Commerce) stated that “approved exclusions would be made on a product basis and will be limited to the individual or organization that submitted the specific exclusion request” (see Trump and Trade Update of March 16, 2018).
The complaint lists 27 non-exclusive Harmonized Tariff Schedule of the United States (HTSUS) subheadings under which Thyssenkrupp and its operating divisions have imported and paid Section 232 duties on aluminum and steel products corresponding to tariff classifications in exclusions that Commerce has granted to other U.S. parties. The complaint claims that Commerce’s decision to grant exclusions to other parties but to deny Thyssenkrupp relief (even in instances in which it requested no exclusion) “results in an unconstitutional lack of uniformity in the application of tariffs imposed on merchandise in the same HTSUS classification and denies Thyssenkrupp the protection afforded by the Uniformity Clause of Article I, Section 8 of the U.S. Constitution.” The complaint states that the decision to grant exclusions to individual requestors rather than for products based on their HTSUS classification is contrary to the aluminum and steel presidential proclamations and “arbitrary, capricious and not in accordance with law.” Since Thyssenkrupp must pay the additional 10 percent and 25 percent ad valorem duties, the complaint alleges that the company has been placed at a competitive disadvantage with those importers receiving exclusions.
According to the complaint, the establishment of the exclusion process “produces competitive disadvantages for [Thyssenkrupp] which results in irreparable harm to plaintiff that cannot be remedied by the refund of 232 duties paid and other monetary relief.” Thyssenkrupp concludes by alleging that Section 232 is an unconstitutional delegation of authority from Congress to the executive branch, and that the duties applied to aluminum and steel products under Section 232 are “an unlawful exercise of legislative authority and are void ab initio.” The complaint seeks to have the current requestor-specific Section 232 exclusion process deemed unconstitutional, arbitrary, capricious and an abuse of discretion, and enjoin U.S. Customs and Border Protection from further collection of Section 232 duties.