Leibowitz on Trade: More Court Scrutiny of Section 232

Section 232 contains a host of procedural requirements and time limits. Many of these were added to the statute in 1988 amendments as part of a comprehensive reform of U.S. international trade laws. The law requires, for example, that the Commerce Secretary complete an investigation and report to the President on whether imports “threaten to impair” the national security within 270 days after Commerce initiates an investigation. In addition, the President must decide within 90 days after receiving the Commerce report whether the President concurs with the Commerce decision and, if so, what action to take to eliminate the threat. Any decision must be implemented within 15 days after the presidential decision.

In the PrimeSource case, Proclamation 9705, issued March 8, 2018, announced tariffs of 25% on steel and 10% on aluminum imports from most countries. The Commerce report in those cases (steel and aluminum) were forwarded to the President in January 2018, and the President announced import restrictions on most countries on March 8, 2018, within 90 days after the Commerce report’s delivery. The actions announced took effect on March 23, 2018, which was within 15 days after the President’s announcement. 

By contrast, the “derivative products” Proclamation (9980), was announced on Jan. 24, 2020, more than 740 days after the Commerce reports on steel and aluminum were delivered to the White House. Because 740 days comfortably exceeds the 90 days provided in the statute, the proclamation was in trouble unless the time limits don’t apply or are merely suggestions by Congress rather than requirements.

Proclamation 9880 raised the possibility that a new 90-day deadline was created by Commerce. This prospect was raised because the proclamation stated that the Commerce Department had conducted an “assessment” of the effectiveness of the steel and aluminum tariffs, which might constitute a new investigation and start the clock running again. The proclamation announced (with no further details) that the Secretary of Commerce’s “assessment” concluded “that reducing imports of … derivative steel and aluminum articles … would reduce circumvention and facilitate the adjustment of imports” of steel and aluminum products.  

In an earlier opinion in the PrimeSource case, the CIT ordered that, if the government wished to argue that a new investigation started a new 90-day clock running, it should provide information regarding the existence and contents of the “assessments” of Commerce regarding the effectiveness of steel and aluminum import restraints. 

The government responded on March 5 that it would not make that argument. Rather, it had decided to appeal the final judgment of the CIT that the time limits were a mandatory prerequisite to presidential action to impose import restrictions. 

The court gave the government its wish on April 5, deciding that the time limits in Section 232 are mandatory and that any import restrictions after the 90-day and 15-day limits for action and implementation are unlawful (at least in the absence of further investigation and reports). 

It would be speculative to conclude either that the Commerce Department did or did not make any further investigation or “assessment” regarding steel and aluminum tariffs and their “derivatives.” But the court has now clearly decided that these deadlines are mandatory, meaning that further announcements of import restrictions more than 90 days after the Commerce reports were delivered are unlawful. There are, by my count, 11 other cases before the Court of International Trade raising the same issues affecting imports of “derivative” steel and aluminum products.

If the government appeals, PrimeSource will be the third case (and there will certainly be more) to reach the Court of Appeals for the Federal Circuit regarding the time limits in Section 232. Decisions are expected from the Federal Circuit later this year.

Section 232 is one of the key issues of trade authority and trade policy. There are arguments on both sides about the extent of presidential authority over national security. But the issue involving statutory time limits is a bit more prosaic. Congress has unquestioned constitutional authority to regulate international commerce; and it may delegate authority to the Executive Branch. 

But equally certain is that Congress may condition its delegation of authority on strict compliance with time limits and procedures that Congress puts in a statute. In PrimeSource, the CIT has reaffirmed that Congress meant what it said about the time limits in Section 232. 

If the appellate courts (including the Federal Circuit and the Supreme Court) agree, future Section 232 actions by the President would need to be more precise and more focused; and modifications to import restrictions will need to be preceded by further investigations and notifications to affected parties. But they could still be done. 

If the courts permit the Executive Branch to ignore the procedural requirements and time limits, the issue of whether Section 232 delegates too much legislative power could again be on the table. 

Lewis Leibowitz

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