Jacob Kopnick

The Court of International Trade found that President Donald Trump violated procedural time limits when expanding Section 232 tariffs to steel and aluminum “derivatives,” in an April 5 decision granting refunds to steel nail importer PrimeSource Building Products. Judges Timothy Stanceu and Jennifer Choe-Groves, as part of a three-judge panel, struck down the tariff expansion, ruling that the president exceeded his authority to impose tariffs when he elected to extend them to derivative products. Judge M. Miller Baker, the remaining judge on the panel, dissented from the opinion.

The following lawsuits were filed at the Court of International Trade during the week of March 22-28:

CBP incorrectly reversed its own Enforce and Protect Act determination that an importer evaded antidumping duties on frozen warmwater shrimp from India, a U.S. shrimp industry group said in a complaint filed at the Court of International Trade March 23. The Ad Hoc Shrimp Trade Enforcement Committee (AHSTEC), made up of shrimp producers and wholesalers, said CBP should have stuck with its original finding that Minh Phu transshipped Indian shrimp through Vietnam, in part because the exporter did not provide enough information on its supply chain.

The following lawsuits were filed at the Court of International Trade during the week of March 15-21:

U.S. Court of Appeals for the Federal Circuit Judge Jimmie Reyna asked probing questions on the ability of the president to implement or alter Section 232 national security tariffs with few impediments, during oral argument on March 18. The judge questioned Department of Justice counsel Tara Hogan about the government's defense of tariff alterations President Donald Trump made in 2018 and said that the way the government interpreted the law on tariff modifications would not be applicable in his line of business.

Malaysian palm oil importer Sime Darby Plantation Berhad filed a lawsuit against Duncan Jepson, the managing director of non-governmental organization Liberty Shared, attempting to force the turnover of information relevant to an investigation into forced labor allegations filed by Jepson with the Securities Commission of Malaysia, the company detailed in a news release. The case was brought before the U.S. District Court for the Eastern District of Virginia on March 9 to get Jepson to provide information to help Sime Darby comply with the foreign proceeding in which Jepson alleged wrongful disclosures in the Malaysian company's 2019 Sustainability Report that resulted in the company reporting false or misleading statements about its use of forced labor. The Securities Commission investigation marks the second major governmental inquiry into allegations of forced labor in Sime Darby plantations, with CBP issuing a withhold release order on the importer's products in December.

Litigants challenging lists 3 and 4A Section 301 tariffs have a “difficult hill to climb” in making a compelling case for why the tariffs should be lifted, a lawyer said. Speaking March 11 on a panel at Georgetown Law's 2021 International Trade Update on the courts' role in tariffs, Bradford Ward of King & Spalding called out the central claim used by one of the litigants: that the law does not permit the Office of the U.S. Trade Representative to increase tariffs, only to “delay, taper or terminate such actions.” In the same provision of that law, modification of tariffs is authorized when the burden on U.S. commerce has increased or decreased, meaning the agency can increase or decrease tariffs, said Ward, who used to work at USTR and now represents domestic industry. “It would be illogical, from my perspective, for the statute to prohibit an increase in tariffs while recognizing the ability of USTR to modify via an increase in the burden. It doesn't seem coherent,” Ward said.

The Department of Justice declined to submit additional arguments in defense of President Donald Trump's decision to expand Section 232 steel and aluminum tariffs to steel derivatives beyond its original argument in front of the Court of International Trade, guaranteeing that the court will overturn the steel derivatives tariffs but allowing for an appeal.

The U.S. Court of International Trade dismissed a challenge to the Section 232 steel and aluminum tariffs' exclusion process, finding that the importer-specific exclusion process is constitutional. In the case, steel importer Thyssenkrupp Materials and its subsidiaries said that by excluding individual importers from the tariffs, the process violated the Constitution's uniformity clause by discriminating against steel and aluminum importers based on geography (see 2004230053). Thyssenkrupp also held that the exclusion process was inconsistent with presidential proclamations dictating how the exclusions should be conducted. Judges Claire Kelly, Gary Katzmann and Jane Restani in their March 10 opinion were unconvinced of both arguments and granted the government defense's motion to dismiss the case.

Congress should repeal the Section 232 provisions that allow the president to impose tariffs in response to national security threats, Cato Institute Senior Fellow Scott Lincicome and Research Fellow Inu Manak said in a policy analysis released March 9. The statute is "superfluous given the expansion of presidential trade and other national security powers in laws enacted" since Section 232 became law in 1962, they said. Absent the appetite for a full repeal of the tariffs -- Lincicome and Manak's first proposal -- the writers floated other options for congressional changes, including amending the law to hand final say over Section 232 to Congress, providing for judicial review, narrowing what constitutes “national security,” moving Section 232 investigations to an independent agency and including a public interest provision.