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US court dismisses challenge to Section 232 steel, aluminum tariffs

Posted on 12 March 2021

The US Court of International Trade has dismissed Thyssenkrupp Materials North America's legal challenge to US Section 232 tariffs on steel and aluminum, finding the Section 232 exclusion process does not violate a portion of the US Constitution or reflect an improper construction of previously issued presidential proclamations, as alleged.

At issue in the case is the exclusion process that was created when former President Donald Trump issued tariffs in March 2018 under Section 232 of the Trade Expansion Act of 1962.

When the tariffs were put in place, the Commerce Department was authorized to exclude aluminum and steel articles from the tariffs if the particular article was "determined not to be produced in the US in a sufficient and reasonably available amount or of a satisfactory quality," in addition to taking into account national security considerations, according to proclamations issued at that time.

Thyssenkrupp argued the process, which grants exclusions on an application basis to specific requestors and not automatically to all importers of a particular article, creates a non-uniform tax across the US in violation of the "uniformity clause" of the Constitution, according to the March 10 court opinion.

However, Thyssenkrupp describes its complaint as a facial challenge of the exclusion process as there were no allegations that the company itself requested an exclusion that was improperly denied by Commerce, the court said.

"The complaint does not challenge how the regulation was applied to a specific exclusion request from Thyssenkrupp, but rather that the regulations require Thyssenkrupp to apply for an exclusion in the first place," the court opinion states. "...Should Thyssenkrupp request such an exclusion and be denied, it may seek this remedy."

The US government argued that the court should dismiss the case as Thyssenkrupp failed to state a claim, as it was not contesting any specific decisions. The court noted that it regularly hears cases regarding the Section 232 exclusion process, such as in the case of JSW Steel, but in those instances, it is dealing with companies that have filed exclusion requests.

The US government argued that Thyssenkrupp has not been injured because it has made no claim for an exclusion that has been denied.

"[The company's] argument fails, however, because Thyssenkrupp, like any other directly affected party in the US, could still apply for the exclusion," the court opinion states. "Thyssenkrupp also does not allege that it was, or will be, denied an exclusion, based upon its geographic location within the US."

A request for comment to Thyssenkrupp Materials NA was not immediately returned March 11.

Source : Platts