On July 13, 2021, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) released its opinion reversing the U.S. Court of International Trade’s (“CIT”) decision that President Trump had unlawfully doubled tariffs on imports of steel from Turkey under Section 232 of the Trade Expansion Act of 1962 (“Section 232”). The CIT had initially found that such action was beyond the President’s authority as it was taken outside the timeframe set forth in Section 232. Our prior blog post discussing Section 232 cases at the CIT, including that decision, can be found here.

In Transpacific Steel LLC v. U.S., the CAFC found that the increase in Section 232 tariffs on Turkish steel was permissible because the initial proclamation imposing tariffs on steel imports had allowed for future adjustments. According to the CAFC, under the statute, the President can take a “continuing course of action” which allows later modification, including the increase of import restrictions. The CAFC concluded that the CIT’s narrow reading of the statute obstructs the statutory purpose of Section 232, and would impede the President’s ability to effectively address the national security issues raised by the Department of Commerce. The CAFC also reversed the CIT’s finding that the tariff increase had violated equal protection rights under the Fifth Amendment. One member of the CAFC panel, Judge Reyna, dissented, arguing that the CIT correctly found that the President exceeded his authority under Section 232.

While this decision concerned a temporary increase in 232 tariffs with respect to imports of steel from Turkey, its impact could be much broader, in that the Biden Administration may rely on this decision to adjust any of the Section 232 duties on steel and aluminum imports more freely. Currently, it is unclear what President Biden’s next steps with regard to these Section 232 tariffs will be, and now, he may have a freer hand in modifying these tariff levels to effectuate broader trade and industrial policies.