President Can Modify Section 232 Tariffs at Any Time, DOJ Says in Motion to Dismiss Derivatives Challenge

The president has the authority to modify Section 232 tariffs after their initial implementation, and acted within that authority when he issued new tariffs on aluminum and steel “derivatives” that took effect in February, the Justice Department said in a brief filed March 20 that seeks dismissal of a lawsuit filed by PrimeSource.

PrimeSource argues that the new tariffs violate the procedural requirements of Section 232 (see 2002060075), partly because no opportunity for comment was given on the commerce secretary’s “assessment” that the duties should be levied, and also because the new tariffs came well after the time frames given to the president to implement any new tariffs based off the initial Section 232 report Commerce issued in late 2017. The lawsuit follows in the footsteps of a so-far-successful challenge to increased 232 tariffs on Turkey filed by Transpacific Steel (see 1911180013).

The government says both of those arguments fail. First, the advice of a cabinet secretary to the president, like the “assessment” of the commerce secretary that additional duties were needed, is not a rulemaking that requires comment under the Administrative Procedure Act. Likewise, “PrimeSource’s assertion that the Department of Commerce is an agency within the meaning of the APA, while undisputed, is insufficient to demonstrate that the Secretary’s confidential communications to the President are subject to judicial review,” the motion to dismiss said.

The statutory deadlines set by Section 232 do not restrict the president from subsequently altering the tariffs as conditions change, DOJ said. While the president has 90 days after Commerce’s initial report to determine the “nature and duration” of the duties, and 15 days after that to implement them, “the President could determine that the 'nature and duration' of the action is dynamic and must be modified as conditions change, as he did here to prevent circumvention,” the brief said.

CIT’s decision in Transpacific is not binding in this case, the government said. And it “rested on an erroneous understanding” of a 1988 law that shortened the deadlines for Section 232 investigations, the brief said.

The PrimeSource case is one of several challenges to the derivatives tariffs filed since February, several of which (see 2003030048), including PrimeSource’s (see 2002070055), have resulted in court orders blocking collection of the tariffs while the cases proceed. DOJ also on March 20 filed a motion to dismiss a now-consolidated case involving Oman Fasteners and Huttig Building Products. New Supplies and Trinity Steel have filed motions, with the consent of DOJ, to stay their cases pending the outcome of the PrimeSource case.

Email ITTNews@warren-news.com for a copy of the motions to dismiss in PrimeSource and Oman Fasteners.