US appeals court denies steel importers’ bid to end Section 232 tariffs

The US Court of Appeals for the Federal Circuit on Friday denied an appeal filed by US steel importers challenging the constitutional authority of the Trump administration’s Section 232 metals tariffs.

In an opinion issued Friday, the court upheld a March 2019 decision by the US Court of International Trade that rejected the importers’ challenge, finding the court is bound by precedent established in a 1970s Section 232 oil case (Fed. Energy Admin. v. Algonquin). The court ruled the issue in the steel importers’ case is controlled by a portion of the Supreme Court’s Algonquin decision that declares Section 232 does not violate the nondelegation doctrine.

“We agree, and we therefore affirm,” the opinion by the appeals court states: “…The court’s ruling in Algonquin answers the question of the constitutionality of Section 232 presented here.”

The American Institute for International Steel (AIIS), plus two of its members, filed a lawsuit in June 2018 challenging the constitutionally of the 25% import tariff President Donald Trump’s administration issued on steel in March of that year under Section 232 of the 1962 Trade Expansion Act. At the time, the Trump administration also applied a 10% tariff on aluminum imports.

In its appeal, the AIIS looked to distinguish the steel tariffs from the Algonquin decision, arguing the statute only dealt with presidential authority to set import fees and did not address the constitutionality of the entire law. The court, however, said the AIIS “presented no persuasive explanation for distinguishing the tariffs at issue here from the license fees at issue there.”

The appeals court did note that five members of the Supreme Court have recently expressed interest in at least exploring a reconsideration of the delegation-doctrine standard.

“But such expressions give us neither a license to disregard the currently governing precedent nor a substitute standard to apply,” the court said in the opinion.

The Supreme Court in June denied hearing AIIS’ challenge to the Section 232 tariffs.

AIIS did not immediately respond to a request for comment Friday.

The American Iron and Steel Institute, which represents US domestic steelmakers, meanwhile, welcomed the court’s ruling Friday.

“Today the Court of Appeals rightly affirmed our strong belief, and the previous decision of the Court of International Trade, that the constitutional challenge to the Section 232 statute is without merit,” AISI CEO Thomas Gibson said in a statement. “This lawsuit by steel importers is a weak attempt to mask the fact that surging foreign imports have severely impacted the domestic steel industry and threaten our national and economic security. The court today affirmed that Congress acted within its constitutional authority when it authorized the president to take action to adjust imports that threaten to impair our national security. We have consistently maintained this fact and are pleased that the Court of Appeals agreed.”

— Justine Coyne