In a June 9, 2022 opinion, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit or CAFC) upheld the decision by the U.S. Court of International Trade (CIT) dismissing Universal Steel Products Holding’s challenge to Section 232 tariffs that the Trump administration placed on steel imports.  The plaintiffs had earlier challenged both the report by the U.S. Department of Commerce (Commerce) supporting the Section 232 steel tariffs (Steel Report) and former President Trump’s executive order, Proclamation 9705, and its subsequent modifications (collectively, “Proclamations”), claiming that they violated various Section 232 procedural requirements and the Administrative Procedure Act (APA).  A CIT three-judge panel had earlier dismissed the challenge (see Update of February 5, 2021).

In its opinion, the CAFC affirmed the CIT’s decision.  While the plaintiffs argued that the Secretary of Commerce’s threat finding constituted a final agency action subject to review under the APA, the CIT ruled that the report “was not a final, reviewable action under the APA because the ‘imposition of tariffs, which is the action that gave rise to the legal consequences that Plaintiffs challenge, was an action taken by the President, and not by the Secretary,’ such that the report did not carry legal consequences itself.”  The CAFC found that the CIT was incorrect on this point and references relevant case law that a predicate affirmative agency finding of injury or threat is reviewable.

The remainder of the opinion focuses on the plaintiffs’ argument that the threat determination by both former President Trump and the Secretary of Commerce was contrary to the clear language of the relevant Section 232 statute.  The plaintiffs had argued at the CIT that the “threat” must be “imminent” or “near at hand” and “likely to happen soon.”  The CAFC held that the statute “imposes no imminence requirement.”  The CAFC found that the plaintiffs did not challenge former President Trump’s determination “for any reason other than [this] alleged statutory violation.”  As for the Secretary of Commerce’s threat determination, the judges held that such a determination “is not reviewable under the APA arbitrary and capricious standard. This is so because the standard governing the Secretary’s action is the same as for the President’s action (i.e., the existence of a “threat”), and the President’s action is only reviewable for compliance with the statute.”

The CAFC considered plaintiffs’ argument that “the President failed to satisfy the ‘nature and duration’ requirement of the statute with Proclamation 9705”  by failing to indicate a time period for the tariffs.  In their analysis, the judges found that this action “is committed to the President, and the Secretary plays no part.”  They held that this matter is left to “the President’s discretion, and the President’s exercise of his judgment to ‘determine the nature and duration’ of the action he believes necessary is beyond the scope of our review.”

The opinion concludes, “We have authority to review the determinations by both the President and the Secretary that steel imports threaten national security and the determination by the President to set a steel tariff for an indefinite duration. We find no violations of the statute.”

While concurring with the decision, Judge Raymond Chen offered brief additional views, expressing concern that the key precedent supporting the decision, Corus Grp. PLC v. Int’l Trade Comm’n, is inconsistent with U.S. Supreme Court precedents on “the non-finality of a Secretary’s or Commission’s tentative report and recommendation to the President.”  His comments reference, in particular, two other Supreme Court decisions that found “the Secretary’s or Commission’s report and recommendations to the President did not constitute final agency action, reviewable under the APA, because those recommendations were not themselves binding actions that directly affected the parties.”  However, Judge Chen concluded that the CAFC is bound by the Corus Group decision despite his concern that it was incorrectly decided in the wake of these Supreme Court precedents.