Federal Circuit Holds 232 is Constitutional

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February 28, 2020

The US Court of Appeals for the Federal Circuit just upheld as constitutional President Trump’s original use of section 232 of the Trade Expansion Act to impose 25% additional duties on steel. The plaintiffs argued that the action violated the US Constitution as an unauthorized delegation of Congress’ right to lay and collect customs duties without appropriate limitations to that delegation. The appeals court disagreed, holding that the Supreme Court's earlier decision in the Algonquin case, which had upheld the delegation as constitutional, was binding precedent on the delegation issue. The importers can now seek US Supreme Court review. Click here to read the decision.

This means that the additional 25% duties on certain steel products, and the 10% duties on certain aluminum products, continue. And what does this mean for importers of derivative steel products, which are now being subjected to these 232 duties? If the case had been successful, then it would have unraveled the original basis for the initial imposition of the 232 duties, and with it the basis for now reaching downstream products made from steel or aluminum. But the primary argument in the derivatives cases--that the extension of the 232 duties to the derivative products violates principals of administrative law--is still viable.

For more information about this executive order or any other trade-related presidential action, please contact one of the attorneys at Barnes, Richardson & Colburn, LLP.