President Donald Trump's directive in his proclamation expanding Section 232 steel tariffs to assess penalties for the misclassification of entries resulting in non-payment of the duties without regard for "evidence of mitigating factors" may run afoul of existing customs laws, trade lawyers said. Even if the directive stays within the bounds of the current statutory scheme, expect more prior disclosures and proactive steps to ensure the proper customs treatment of steel entries, the lawyers added.
The following lawsuits were filed at the Court of International Trade during the week of Feb. 3-9:
President Donald Trump's recent expansion of Section 232 steel and aluminum tariffs likely would survive a judicial challenge, particularly in light of the string of cases challenging the Section 232 duties imposed during his first term, trade lawyers told us. Thomas Beline, partner at Cassidy Levy, said Trump's move to eliminate the country-specific arrangements and product exclusions is "likely defensible," since the statute lets the president take any action he deems necessary where an agreement is "not being carried out or is ineffective."
A California customs broker pleaded guilty Feb. 7 to defrauding importers out of more than $5 million and committing over $1 million in tax evasion, the U.S. Attorney's Office for the Central District of California announced. The broker, Frank Seung Noah, copped to two counts of wire fraud, for which he faces up to 20 years in prison each, and one count of tax evasion, for which he faces five years in prison.
A Wisconsin man filed a pro se lawsuit at the Court of International Trade challenging the president's ability to impose tariffs, arguing that any attempt by the president to levy import duties represents an improper delegation of power under the U.S. Constitution. The individual, Gary Barnes, said imposing tariffs "is not within the jurisdiction of the President's duties," noting that the power to levy tariffs rests solely with Congress (Gary L Barnes v. United States President Donald Trump, CIT # 25-00043).
China opened a dispute at the World Trade Organization on Feb. 5 to challenge the new 10% tariff imposed by the U.S. on all goods from China, claiming that the measure violates the General Agreement on Tariffs and Trade. China said that not only do the duties violate the U.S. government's "Schedule of Concessions and Commitments," they're also "discriminatory and protectionist in nature."
The following lawsuits were filed at the Court of International Trade during the week of Jan. 27 - Feb. 2:
The U.S. could use the False Claims Act to more aggressively combat tariff evasion, attorneys at Ropes & Gray said in a Feb. 3 alert. Companies should "carefully scrutinize their import policies and procedures to ensure they are adhering to all applicable laws," the firm said, adding that importers should ensure that they have "appropriate avenues" for internal and external parties to bring confidential reports to the company's attention.
The U.S. on Feb. 3 brought a complaint against importer Shunny Corp., doing business as Sampac Enterprises, alleging that the company negligently misreported the country of origin of its health products to avoid import duties. The government is seeking nearly $200,000 in unpaid duties, along with a nearly $1.4 million penalty (United States v. Shunny Corp., CIT # 25-00039).
President Donald Trump nominated William Kimmitt, current partner at Kirkland & Ellis, to serve as head of the Commerce Department's International Trade Administration. Kimmitt served in the first Trump administration as counsel to the U.S. trade representative and was involved in the implementation of the USMCA. At Kirkland & Ellis, Kimmitt is a litigation partner, focusing on international trade and Section 337 unfair import investigation proceedings.