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On October 30, 2023, the U.S. Supreme Court declined to hear another Section 232 national security steel tariff appeal. On July 21, 2023, PrimeSource Building Products, Inc. filed Petition for a Writ of Certiorari with the U.S. Supreme Court, after the U.S. Court of Appeals for the Federal Circuit reversed the lower court decision of the U.S. Court of International Trade (CIT) and upheld the imposition of additional Section 232 national security tariffs on derivatives of certain imported steel articles implemented by former President Donald Trump under Section 232 of the Trade Expansion Act of 1962. With the Supreme Court denying the petition, this litigation has concluded and the Federal Circuit’s decision stands.

Our Updates of July 31, 2023, April 27, 2023 and February 8, 2023 provide details on PrimeSource’s Petition for a Rehearing En Banc at the Federal Circuit and the three-judge panel’s opinion that reversed the CIT decision. See also Updates of April 6, 2021 and January 28, 2021 for additional background on the case and the CIT’s dismissal of other claims.

On July 21, 2023, PrimeSource Building Products, Inc. filed a Petition for a Writ of Certiorari with the U.S. Supreme Court, after unsuccessfully seeking an en banc hearing before all of the judges at the U.S. Court of Appeals for the Federal Circuit. In that decision, a three-judge panel reversed a lower court decision and upheld the imposition of additional Section 232 national security tariffs on derivatives of certain imported steel articles implemented by former President Donald Trump under Section 232 of the Trade Expansion Act of 1962. The lower court, the Court of International Trade (CIT), ruled in favor of PrimeSource, a U.S. importer, which argued that President Trump’s proclamation on steel derivatives was issued after a key statutory deadline had passed that required presidential action. The Federal Circuit, however, 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’” and that there was no “textual basis for a specific time limit.” 

In its petition to the Supreme Court, PrimeSource argues that former President Trump imposed Section 232 steel tariffs on steel derivatives “without complying with the statute’s procedural prerequisites.” It wants the Supreme Court to address whether the “separation of powers principles require courts to resolve ambiguity in statutory limits on delegations of vast legislative power to the Executive in a way that constrains the delegation or, as the Federal Circuit holds, courts must uphold the President’s actions absent ‘a clear misconstruction of the governing statute.’”

Our Updates of April 27, 2023 and February 8, 2023 provide details on PrimeSource’s Petition for a Rehearing En Banc at the U.S. Court of Appeals for the Federal Circuit and on the three-judge panel’s opinion that reversed the CIT decision. See also Updates of April 6, 2021 and January 28, 2021 for additional background on the case and the CIT’s dismissal of other claims.

On April 24, 2023, plaintiffs in an ongoing challenge at the U.S. Court of Appeals for the Federal Circuit filed a Petition for Rehearing En Banc of their argument that former President Donald Trump improperly imposed additional Section 232 national security tariffs on derivatives of certain imported steel articles. In their petition for consideration by the full court, the petitioners — PrimeSource Building Products, Inc. and Oman Fasteners, LLC — state that the prior three-judge panel, which heard arguments on the matter and upheld the president’s authority to expand national security tariffs even after certain statutory deadlines had passed, ignored the plain language of Section 232 of the Trade Expansion Act of 1962.

The petitioners argue that if the three-judge panel’s decision stands, “the President will enjoy unbounded legislative power to regulate foreign trade—to take any action, at any time, targeting any imported product, so long as at any point in the past, the Secretary [of Commerce] made a threat determination regarding either the targeted product or any material used to make that product. Given its profound expansion of the Executive’s power, this case merits rehearing by the Court en banc.” In addition to alleging that the plain language of the statute was ignored, the petitioners also argue that the panel abandoned strict limitations on presidential power under Section 232 that were set forth in an earlier appellate decision in Transpacific Steel LLC v. United States. In doing so, the three-judge panel, the petitioners claim, has done “far greater violence to the procedural safeguards Congress built into Section 232.” In seeking an en banc rehearing, the petitioners are asking a full Federal Circuit panel to affirm the U.S. Court of International Trade’s original decision invalidating the Section 232 duties on derivatives of certain imported steel products.

Our Update of  February 8, 2023 provides details on the three-judge panel’s opinion that reversed the CIT decision. See also Updates of April 6, 2021 and January 28, 2021 for additional background on the case and the CIT’s dismissal of other claims.

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.”

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.