On April 5, 2021, the U.S Court of International Trade (CIT) published a summary judgment opinion invalidating former President Donald Trump’s executive order, Proclamation 9980, which imposed 25 percent tariffs on various imports of aluminum and steel derivative articles 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 of various steel derivative products, which argued that Proclamation 9980 was issued after a key statutory deadline in the proceeding.

In January 2021, the CIT dismissed all claims but one in PrimeSource Building Products, Inc. vs. United States, et al., finding that a “genuine issue of material fact” existed for the remaining claim concerning the issuance of Proclamation 9980 after a statutory deadline established following the submission of the Department of Commerce’s Section 232 investigative report to the president. See Update of January 28, 2021, for additional background on the case and prior CIT dismissal of the other claims. At the time of its January 27, 2021 order, the CIT instructed the parties to submit by February 26, 2021, a joint scheduling report for briefing the remaining claim. Instead of filing a joint schedule, the parties on March 5, 2021 filed a joint status report, stating that the defendants “expressly waived ‘the opportunity to provide additional factual information that might show that the essential requirements of [the relevant statutory provision]’ were met.” The parties instead agreed that there was no reason for the CIT to delay any final judgment.

Since the defendants declined to present additional evidence and did not previously address that issue, the CIT found that the “defendants having waived any argument that Proclamation 9980 was issued within the 105-day time period beginning on the President’s receipt of [the Section 232 Steel Report], there are no contested issues of fact.” The CIT issued summary judgment, declaring Proclamation 9980 “invalid as contrary to law” and directed that all entries affected by this litigation be: (i) liquidated without the assessment of duties if still pending; and (ii) refunded if such duties have already been collected and liquidated.

The U.S. government is expected to appeal the CIT decision to the U.S. Court of Appeals of the Federal Circuit, relying on the dissenting opinion of CIT Judge Miller Baker.

On January 27, 2021, the U.S. Court of International Trade (CIT) issued an opinion in which it dismissed all but one claim challenging on various grounds a proclamation by former President Donald Trump (Proclamation 9980) that imposed 25% tariffs on, inter alia, various imported products made of steel pursuant to Section 232 of the Trade Expansion Act of 1962. However, the CIT will continue to consider the claim that President Trump implemented additional and new duties on certain steel derivative products after the statutory time period for such action had lapsed.

PrimeSource Building Products, Inc., a U.S. importer of various steel derivative products, filed a complaint (subsequently amended) in the CIT on February 4, 2020, arguing that President Trump’s Proclamation 9980 was unlawful and unconstitutional. See Update of February 14, 2020. On March 20, 2020, the U.S. Department of Justice (DOJ) filed a motion to dismiss the complaint, arguing that the new tariffs did not violate the Section 232 procedural requirements or PrimeSource’s right to due process. See Update of March 31, 2020.

In its January 27, 2021 order, the CIT dismissed PrimeSource’s claims that: (i) the imposition of Section 232 duties on the derivative products was procedurally deficient; (ii) the secretary of commerce violated all of the Section 232 statutory provisions; (iii) PrimeSource was deprived of its Fifth Amendment due process constitutional rights; and (iv) Section 232 is unconstitutional as it unlawfully delegates legislative authority from Congress to the president.

The CIT did not dismiss PrimeSource’s claim that Proclamation 9980 was issued 638 days after the transmittal of the Section 232 steel investigation report to the president (well after the 105 days set forth in 19 U.S.C. § 1862(c)(1)) and is thus null and void. Despite DOJ arguing that the president has the authority to modify Section 232 tariffs at any time to protect national security (including adjusting imports of articles not addressed in Proclamation 9705 that the president designated as “derivatives” of identified steel articles), the CIT found that this claim rests upon a “plain meaning” interpretation of the statute. The opinion states that DOJ’s “’flexible’ reading of [19 U.S.C. § 1862(c)(1)] would require us to interpret the ‘action’ taken by Proclamation 9980 and that taken by Proclamation 9705 as parts of the same ‘action’,” which “presents several interpretive problems.” The opinion concludes that there “is no ‘flexible’ reading of [19 U.S.C. § 1862(c)(1)] Section 232(c)(1) that suffices to allow the President to adjust, through new tariffs, imports of derivatives of previously-affected articles outside of the time limits Congress imposed, and the appellate decisions on which defendants rely do not lend support to any such reading.”

The parties now have until February 26, 2021, to file a joint schedule that will govern the briefing and hearing schedule for the remaining “unresolved factual issues” of this claim.

PrimeSource Building Products, Inc., a U.S. importer of various steel derivative products, filed an amended complaint 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 PrimeSource case is one of many challenges to the Section 232 tariffs on steel derivatives, at least two of which, New Supplies and Trinity Steel, have filed motions with the consent of DOJ, to stay their cases pending the outcome of the PrimeSource case.

The PrimeSource complaint argues that the new tariffs violate the Section 232 procedural requirements and its right to due process under the Constitution because: (1) no opportunity for comment was provided in response to the Commerce secretary’s determination the duties should be imposed; and (2) duties were implemented by the president beyond the prescribed Section 232 time frames. A summary of the complaint and related initial proceedings was provided in an earlier Trump and Trade update on February 14, 2020.

On March 20, 2020, the U.S. Department of Justice (DOJ) filed a motion to dismiss the complaint, arguing that the new tariffs did not violate the Section 232 procedural requirements or PrimeSource’s right to due process because: (1) the secretary of Commerce’s provision of facts and recommendations to the president are not subject to judicial review; and (2) the prescribed time frame to “implement” action within 15 days “does not foreclose the President’s authority to modify the action selected, as the President determines is necessary to protect national security.”

These various court challenges to the Section 232 tariffs on steel derivatives have already resulted in a court order blocking collection of the tariffs while the cases proceed. On March 20, the DOJ filed a motion to dismiss in the now-consolidated Oman Fasteners, LLC and Huttig Building Products, Inc. case, similarly arguing that the president can modify Section 232 tariffs at any time to protect national security.

The cases previously referenced are PrimeSource Building Products Inc. v. United States et al., case number 1:20-cv-00032; Oman Fasteners, LLC v. United States, case number 1:20-cv-00037; Huttig Building Products, Inc. et al. v. United States et al., case number 1:20-cv-00045; Trinity Steel Private Ltd. v. United States et al., case number 1:20-cv-00047; and New Supplies Co., Inc et al. v. United States, case number 1:20-cv-00048, all before the U.S. Court of International Trade.

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.