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On July 14, 2020, a three-judge panel of the U.S. Court of International Trade (CIT) ruled in <a href="https://www.cit.uscourts.gov/sites/cit/files/20-98.pdf" target="_blank" rel="noopener noreferrer">Slip Opinion 20-98</a> 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&rsquo;s guarantee of equal protection under law. Lead plaintiff Transpacific Steel LLC (Transpacific) argued that it should be refunded additional tariffs paid pursuant to <a href="https://www.federalregister.gov/d/2018-17703" target="_blank" rel="noopener noreferrer">Presidential Proclamation 9772</a> on certain imports of Turkish steel. This proclamation solely affected Turkish steel &ndash; raising the duty rate from 25 percent to 50 percent &ndash; and was issued well after the Section 232 national security investigation of steel imports had concluded and well after President Trump issued his initial <a href="https://www.federalregister.gov/d/2018-05478" target="_blank" rel="noopener noreferrer">Presidential Proclamation 9705</a> 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&rsquo;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 &ldquo;inten[ded] to confer continuing authority and flexibility on the President to counter the threat identified&rdquo; as confirmed by the &ldquo;language, long-standing congressional understanding, and the purpose of the statute . . .&rdquo; The three-judge panel agreed with the plaintiffs that the statutory language is clear and that Proclamation 9772 &ldquo;was issued far beyond this temporal window.&rdquo; 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 &ldquo;no citation to the statute nor to the recent legislative history to support&rdquo; 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 &ldquo;without a proper report and recommendation by the Secretary on the national security threat posed by imports of steel products from Turkey.&rdquo;
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 &ldquo;without rational justification&rdquo; and &ldquo;that the government has offered no sensible reason for targeting imports from Turkey and that no reasonable rationale is apparent.&rdquo; While the ruling found that national security is a legitimate purpose, it concluded that &ldquo;[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.&rdquo; As a result, the CIT determined, Proclamation 9772 denied the plaintiffs equal protection under law.

core/freeform

SmarTrade

Senior Legislative and Regulatory Policy Advisor

Scott E. Diamond

U.S. Court of International Trade Rules That President Trump’s Section 232 Tariff Increase on Steel Imports from Turkey Is Unlawful