CAFC Judges Probe Limits to Reviewability of Presidential Action Under Section 232

Judges at the U.S. Court of Appeals for the Federal Circuit probed the limits of the president's authority when implementing Section 232 national security tariffs during Feb. 9 oral arguments in a case representing a broad challenge to presidential action under the statute. Questions revolved around what elements, if any, of the process was judicially reviewable, with the plaintiffs, led by USP Holdings, arguing that the report issued by the commerce secretary to the president, which permits the president to impose the tariffs, is a final agency action and thus reviewable under the Administrative Procedure Act (USP Holdings, Inc. v. U.S., Fed. Cir. #21-1726).

The Department of Justice argued that this report is not final agency action and that the merits of the president or Commerce's fact finding in the run-up to imposing the Section 232 tariffs is unreviewable. That position was questioned by the judges, Judge Raymond Chen in particular, who inquired as to whether the Commerce report was reviewable in any circumstance.

"Is it theoretically possible that a Secretary report could be so error-full and conclusory as to why there's something threatening national security that that would be something we would have to consider as possibly exceeding the president's statutory authority?" Chen asked. Meen Geu Oh of DOJ responded by stating the check on this practice would be the president's option to simply not take action in the face of such a report.

"I guess my question concerns the president concurring with this skeletal three-sentence report. Then what happens?" Chen followed up. "Our position would be that that is unreviewable under the statute," Oh replied. Oh said that the president is not bound to just consider the Commerce report when issuing Section 232 duties and that the president may consult other sources or advisers when deciding whether to impose the tariffs.

In February 2021, the Court of International Trade held that the Commerce report is not a final agency action and that Section 232 does not require the president to decide a date when the tariffs will end (see 2102040026). The Universal Steel decision is one in a growing number of court cases parsing the president's authority under Section 232. More recently, the Federal Circuit said in Transpacific Steel LLC v. U.S. that the president can alter existing Section 232 tariffs beyond the 105-day deadline for taking such action (see 2107130059).

Transpacific surfaced in the Universal Steel oral argument, with the judges asking the plaintiffs if the landmark decision did not already address many of their arguments. Lewis Leibowitz, counsel for the plaintiffs, responded by saying that Transpacific dealt with the modification of existing Section 232 tariffs and not with the initial imposition of the tariffs, as his lawsuit does.

One of the judges also asked the U.S. why judicial review wasn't available for the Commerce report when it was available for antidumping cases. The judge seemed to suggest that parallels could exist between antidumping duty cases and the imposition of Section 232 duties, seeing as the president has the option to not impose an AD order following Commerce's determinations but yet the courts routinely review Commerce determinations. While Oh couldn't speak to the AD statute, he said that the Section 232 statute is clear that the president takes the final action.