Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The US Court of International Trade (CIT) has ruled against the additional steel tariffs that were imposed on Turkey in 2018 under Sec 232.


In a ruling on July 14, the CIT called the move unconstitutional and noted that the additional duties on Turkish steel violated the Constitution’s guarantee of equal protection under the country’s law. It added that the duties also violated the statutorily mandated trade procedures.


At the heart of the matter is an investigation into the effect of imported steel on national security that was initiated by the US Secretary of Commerce on April 19, 2017, Commerce issued a report and recommendation based on the review on January 11, 2018. In response, on March 8, 2018, President Trump issued a proclamation imposing a 25pc ad valorem tariff on steel products imports.


Moreover, on August 10, 2018, the President increased those tariffs to 50pc ad valorem on Turkish steel products through Proclamation 9772. The additional tariffs remained in place until they were removed effective May 21, 2019.


Plaintiff Transpacific Steel LLC, a U.S. importer of steel, requested a refund of the additional tariffs it paid pursuant to Proclamation 9772 on certain steel products from Turkey, arguing that Proclamation 9772 was unlawful because it lacked a nexus to national security, was issued without following mandated statutory procedures and singled out Turkish steel products importers in violation of the Fifth Amendment.


The US CIT ruled in favor of the plaintiff after finding that the President violated Section 232’s procedure, which requires the President to make a decision based on the Secretary’s of Commerce report and recommendation within 90 days and implement any chosen action another 15 days after that decision.


In its opinion on the matter, the CIT stated that the “temporal restrictions on the President’s power to take action pursuant to a report and recommendation by the Secretary is a restriction that requires strict adherence.”


The US President is permitted to modify his previous proclamation, but “[t]he President’s expansive view of his power under section 232 is mistaken and at odds with the language of the statute, its legislative history, and its purpose,” the CIT said in its ruling.


During the Cold War, Congress enacted Section 232 of the Trade Expansion Act of 1962, which authorized the President to adjust imports that pose a threat to the national security of the United States.


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