White HouseWhy importers of steel and aluminum derivative products should consider challenging the administration’s imposition of additional Section 232 duties:

  • The processes followed by the administration in implementing additional Section 232 tariffs on steel and aluminum products not originally included in the Section 232 duties are procedurally flawed.
  • The institution of additional duties on products not originally included in the Section 232 duties on steel and aluminum is potentially unconstitutional.
  • One party has already appealed the issue to the Court of International Trade and obtained an injunction stopping Customs and Border Protection (“CBP”) from collecting duties on steel and aluminum derivative products.
  • The injunction is company-specific and we believe an injunction obtained by this company or other companies will not apply to your company unless an appeal is filed and an injunction is obtained on your behalf.
  • If your company’s imports fall into any one of the categories below, then you may contact Husch Blackwell to determine the best strategic approach to ensure that you do not face unnecessary duties.

 

Background

On February 13, 2020, the Court of International Trade issued an injunction barring U.S. Customs and Border Protection from collecting new Section 232 tariffs on finished steel and aluminum products from a single importer, PrimeSource. The preliminary injunction states that CBP cannot collect “duty deposits” on PrimeSource’s entries of goods covered by these additional tariffs, which took effect on February 8, 2020.  The injunction, however, sets specific bonding requirements while the merits of the appeal are being reviewed by the CIT and until a final judgment is issued in the case.

The CIT’s grant of the injunction stems from complaints filed on behalf of PrimeSource challenging the validity of the Trump Administration’s decision to expand the scope of the existing Section 232 tariffs to several different “derivative” products. By way of background, on January 27, 2020, the Trump Administration announced additional 25% tariffs on steel and 10% tariffs on aluminum derivative products.

 

Products Covered

The covered steel items and subheadings are:

  • Nails, tacks (other than thumb tacks), drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material (excluding such articles with heads of copper), suitable for use in powder-actuated hand tools, threaded (described in subheading 7317.00.30)
  • Nails, tacks (other than thumb tacks), drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material (excluding such articles with heads of copper), of one piece construction, whether or not made of round wire; the foregoing described in statistical reporting numbers 7317.00.5503, 7317.00.5505, 7317.00.5507, 7317.00.5560, 7317.00.5580 or 7317.00.6560 only and not in other statistical reporting numbers of subheadings 7317.00.55 and 7317.00.65
  • Bumper stampings of steel, the foregoing comprising parts and accessories of the motor vehicles of headings 8701 to 8705 (described in subheading 8708.10.30)
  • Body stampings of steel, for tractors suitable for agricultural use (described in subheading 8708.29.21)

 

The covered aluminum items and subheadings are:

  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and with steel core, not electrically insulated; the foregoing fitted with fittings or made up into articles (described in subheading 7614.10.50);
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing comprising electrical conductors, not fitted with fittings or made up into articles (described in subheading 7614.90.20);
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing not comprising electrical conductors, not fitted with fittings or made up into articles (described in subheading 7614.90.40);
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing fitted with fittings or made up into articles (described in subheading 7614.90.50);
  • Bumper stampings of aluminum, the foregoing comprising parts and accessories of the motor 15 vehicles of headings 8701 to 8705 (described in subheading 8708.10.30); and
  • Body stampings of aluminum, for tractors suitable for agricultural use (described in subheading 8708.29.21).

 

Applicability of the Section 232 Injunction

The challenge filed by PrimeSource Building Products is a company-specific appeal related to the authority of the President to impose tariffs under Section 232 past the statutorily proscribed deadlines and processes for the institution of these special tariffs.  Given that these additional tariffs were imposed almost 2 years after the original Section 232 duties were announced, the fundamental basis of the challenge is the procedural inconsistencies in the processes followed by the Executive Branch as well as the unconstitutionality of imposing these duties without adequate notice. The Court of International Trade has instructed plaintiffs to specify the harm to each individual company in order for it to be able to review and potentially grant the requested relief.

We believe that Husch Blackwell’s clients would be interested in pursuing this course of action by filing a complaint and a temporary restraining order, similar to the ones filed by PrimeSource, should their imports fall under either the steel or aluminum derivative product descriptions and tariff classifications above.  It is critical for clients to act quickly to ensure that they are not faced with significant additional duties on their imported steel and aluminum products.

Husch Blackwell continues to monitor the challenge against the Section 232 derivative product duties and will provide updates as more information becomes available. If your company is interested in pursuing this course of action or has any questions regarding the Section 232 duties, please contact our International Trade and Supply Chain team.

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Photo of Nithya Nagarajan Nithya Nagarajan

Nithya’s extensive background in U.S. trade issues spans 25 years and includes various roles in a number of federal government agencies, including the Department of Commerce Department of Justice, and the U.S. Court of International Trade. She assists clients with administrative and regulatory…

Nithya’s extensive background in U.S. trade issues spans 25 years and includes various roles in a number of federal government agencies, including the Department of Commerce Department of Justice, and the U.S. Court of International Trade. She assists clients with administrative and regulatory actions before the Department of Commerce, International Trade Commission and U.S. Customs and Border Protection (CBP) and defends clients in appeals before the Court of International Trade, Court of Appeals for the Federal Circuit, NAFTA panels and the World Trade Organization. In addition to her body of U.S. experience, Nithya is also well-versed in international trade issues in China and India.

Photo of Jeffrey Neeley Jeffrey Neeley

Jeffrey has more than 25 years of experience representing private parties in international trade remedies disputes in the U.S. and in foreign jurisdictions. He guides clients in matters including antidumping investigations, countervailing duties, subsidies, intellectual property disputes as well as related customs, export…

Jeffrey has more than 25 years of experience representing private parties in international trade remedies disputes in the U.S. and in foreign jurisdictions. He guides clients in matters including antidumping investigations, countervailing duties, subsidies, intellectual property disputes as well as related customs, export control, and other import/export issues.

Photo of Robert Stang Robert Stang

Bob focuses his practice on customs and international trade law. He brings 30 years of experience to a wide range of issues that affect inbound and outbound goods, including tariff classification, valuation, country of origin marking matters, free trade agreements, and special trade…

Bob focuses his practice on customs and international trade law. He brings 30 years of experience to a wide range of issues that affect inbound and outbound goods, including tariff classification, valuation, country of origin marking matters, free trade agreements, and special trade programs. He also has extensive customs compliance experience and regularly assists importers facing U.S. Customs and Border Protection (CBP) audits, penalties, seizures, redelivery notices and other agency enforcement activities. Bob works with importers and exporters proactively to achieve cost savings and structure programs that meet CBP “reasonable care” requirements. He also handles supply chain security issues, including Customs-Trade Partnership Against Terrorism (C-TPAT) enrollment, verification and annual reviews.

Photo of Camron Greer Camron Greer

Camron researches transitions in global trade policy and their impact on client business matters. Camron assists clients, attorneys and legal teams when trade, business and the law intersect.