On February 7, 2023, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit (CAFC) issued an opinion in PrimeSource Building Products, Inc. v. United States et al., Case No. 2021-2066, reversing a lower court decision and upholding the imposition of additional Section 232 national security tariffs on derivatives of certain imported steel articles implemented by former President Donald Trump. In April 2021, the U.S. Court of International Trade (CIT) issued an opinion invalidating Presidential Proclamation 9980 that imposed 25% tariffs on these derivative steel products pursuant to Section 232 of the Trade Expansion Act of 1962. The CIT found in favor of plaintiff PrimeSource Building Products, Inc., a U.S. importer, which argued that the proclamation was issued after a key statutory deadline had passed that required presidential action. See Updates of April 6, 2021 and January 28, 2021 for additional background on the case and CIT’s dismissal of other claims.

In the CAFC opinion, the judges reversed the CIT’s ruling that the government waited too long to act, stating that “the President was making a ‘contingency-dependent choice[] that [is] a commonplace feature of plans of action.’” The judges noted that President Trump utilized “a tool that he could have used in the initial set of measures and later found important to address a specific form of circumvention Congress recognized when it authorized coverage of derivatives of the articles whose imports the Secretary found to threaten national security.” The judges determined “[t]here is no textual basis for a specific time limit on adjustments under a timely adopted plan” and that former President Trump had the authority to impose the tariff on steel derivatives. The judges noted that impositions under Section 232 “have on numerous occasions been modified many years after they were first adopted.”

The opinion relies on and references frequently the CAFC’s decision in Transpacific Steel LLC v. United States, in which it upheld “a presidential proclamation that increased tariffs on steel beyond Proclamation 9705’s rate, concluding that when the President, within the § 232 time limits at issue, adopts a plan of action that contemplates future contingency-dependent modifications, those time limits do not preclude the President from later adding to the initial import impositions in order to carry out the plan to help achieve the originally stated national-security objective where the underlying findings and objective have not grown stale.” (For additional details on the Transpacific ruling, see Update of July 13, 2021). In upholding Proclamation 9980 in this PrimeSource appeal, the judges found that there was no staleness or other reason for “overriding the President’s judgment” and that, in fact, the Department of Commerce had been instructed to continue monitoring imports of steel articles and report any circumstances that might require further action. Once informed that steel derivative imports had increased in an apparent effort to circumvent Section 232 duties, the president had the authority to extend the duties. The opinion concludes that Proclamation 9980 “comes within the [CAFC’s] interpretation of § 232 we adopted in Transpacific.”