On July 13, 2021, the U.S. Court of Appeals for the Federal Circuit (Federal Circuit) issued a majority 2-1 opinion reversing the ruling of the U.S. Court of International Trade (CIT) that former President Donald J. Trump violated the provisions of Section 232 of the Trade Expansion Act of 1962 (Section 232) by increasing tariffs on steel imports from Turkey beyond those previously implemented under an earlier Presidential proclamation. See Update of July 14, 2020 for more details on the CIT ruling. The Federal Circuit ruling remands the case to the CIT for an entry of judgment against the plaintiff group led by Transpacific Steel LLC.

The plaintiffs had argued that the Trump administration’s actions violated both the statutorily-mandated procedures for a Section 232 national security investigation and the U.S. Constitution’s guarantee of equal protection under law. In its opinion, the CIT agreed, determining that the subsequent presidential proclamation implementing additional tariffs solely affecting Turkish steel (i.e., raising the duty rate from 25% to 50%) was issued well after the statutory time period allowed under Section 232. The CIT also found that former President Trump acted “without a proper report and recommendation by the [Secretary of Commerce] on the national security threat posed by imports of steel products from Turkey.”

The Federal Circuit, however, ruled that former President Trump did not depart from the finding of the Secretary of Commerce (Secretary) of a national security threat and did not violate the process and timing standards applicable to the Secretary’s finding of a national security threat. According to the decision, the statute “empowers and directs the President to act to alleviate threats to national security from imports” and “[t]he key issue is whether [the statute] permits the President to announce a continuing course of action within the statutory time period and then modify the initial implementing steps in line with the announced plan of action by adding impositions on imports to achieve the stated implementation objective. We conclude that the President does have such authority in the circumstances presented here.”

Overall, the Federal Circuit found that the president “specifically adhered to the Secretary’s underlying finding of the target capacity-utilization level that was the rationale for the predicate threat finding,” and that the “initial presidential action (in March 2018) itself announced a continuing course of action that could include adjustments as time passed.” In a detailed review of the legislative history and congressional intent for the Trade Expansion Act of 1962 and its subsequent amendments, the Federal Circuit found that this history undermined the CIT’s ruling, concluding “that the increase in the tariff on steel from Turkey by Proclamation 9772 did not violate [the provisions of Section 232].” The Federal Circuit also concluded that Proclamation 9772 did not violate the equal protection guarantees of the Fifth Amendment’s due process clause.

The Federal Circuit decision made clear that the judges were not addressing “other circumstances that would present other issues about presidential authority to adjust initially taken actions without securing a new report with a new threat finding from the Secretary.” As a result, the Federal Circuit indicated, the immediate impact of this ruling should be limited to the facts and issues surrounding the implementation of additional duties on imports of Turkish steel.

In his dissenting opinion, Judge Jimmie Reyna started by quoting President John Adams, stating that “Power must never be trusted without a Check” and adding that the “essential question posed by this appeal is whether Congress enacted [Section] 232 to grant the President un-checked authority over the Tariff.” He based his dissent on three grounds: (1) The “majority overlooks the context of Section 232 as a trade statute” and Congress delegated only narrow authority to the President over trade; (2) Section 232 is “written in plain words that evoke common meaning and application” and the majority offers no clear reason “to diverge from that plain language,” and (3) Section 232’s “legislative history shows that Congress intended, for good reason, to end the Executive Branch’s historical practice of perpetually modifying earlier actions without obtaining a new report from the Secretary of Commerce and without reporting to Congress.”

The next steps in this litigation remain unclear. After remand to the CIT, the plaintiffs have the option of challenging the decision by either seeking a review by the full Federal Circuit or appealing to the U.S. Supreme Court.

On July 14, 2020, a three-judge panel of the U.S. Court of International Trade (CIT) ruled in Slip Opinion 20-98 that a proclamation President Donald Trump issued increasing Section 232 duties on steel imports from Turkey beyond those previously implemented under a prior proclamation violates statutorily-mandated procedures and the Constitution’s guarantee of equal protection under law. Lead plaintiff Transpacific Steel LLC (Transpacific) argued that it should be refunded additional tariffs paid pursuant to Presidential Proclamation 9772 on certain imports of Turkish steel. This proclamation solely affected Turkish steel – raising the duty rate from 25 percent to 50 percent – and was issued well after the Section 232 national security investigation of steel imports had concluded and well after President Trump issued his initial Presidential Proclamation 9705 imposing a 25 percent tariff duty on steel products from several countries.

Transpacific argued that the statute requires the President to make a decision within 90 days of receipt of the Secretary of Commerce’s report and recommendation and to implement any chosen action within 15 days of that decision. The first proclamation was issued on March 8, 2018. The second proclamation was issued on August 10, 2018, which was outside of the statutory time period and was not the result of any formal Department of Commerce report. Attorneys for the U.S. government argued that Congress “inten[ded] to confer continuing authority and flexibility on the President to counter the threat identified” as confirmed by the “language, long-standing congressional understanding, and the purpose of the statute . . .” The three-judge panel agreed with the plaintiffs that the statutory language is clear and that Proclamation 9772 “was issued far beyond this temporal window.” The opinion notes that there is nothing in the statute to support the continuing authority to modify proclamations outside of the stated timelines and that the government offered “no citation to the statute nor to the recent legislative history to support” its theory that the President is permitted to modify his previous proclamation under the provisions of Section 232 of the Trade Expansion Act of 1962, as amended. The CIT also found that, in addition to acting outside of the statutory time limitations, President Trump acted “without a proper report and recommendation by the Secretary on the national security threat posed by imports of steel products from Turkey.”

The plaintiffs also raised a Fifth Amendment equal protection challenge to Proclamation 9772, arguing that the second proclamation discriminates between similarly situated importers based on the origin of their imports “without rational justification” and “that the government has offered no sensible reason for targeting imports from Turkey and that no reasonable rationale is apparent.” While the ruling found that national security is a legitimate purpose, it concluded that “[s]ingling out steel products from Turkey is not a rational means of addressing that concern. Section 232 does not ban the President from addressing concerns by focusing on particular exporters, but the decision to increase the tariffs on imported steel products from Turkey, and Turkey alone, without any justification, is arbitrary and irrational.” As a result, the CIT determined, Proclamation 9772 denied the plaintiffs equal protection under law.