Trump-Era Tariffs on Steel Nails, Other Imports Upheld on Appeal

A 2020 proclamation issued by then-President Donald Trump that raised tariffs on imports of steel derivatives such as nails and fasteners didn’t exceed the scope of the president’s authority, a federal appeals court ruled.

The government had the authority, under §232 of the Trade Expansion Act of 1962 to issue Proclamation 9980, as an adjustment to tariffs imposed on “steel articles” two years earlier, the US Court of Appeals for the Federal Circuit ruled Tuesday. The three-judge panel ruling overturns a decision by the US Court of International Trade in a timeliness challenge brought by a cluster of businesses.

The deadlines in §232 didn’t bar the president from modifying his initial plan of action by issuing 9980, the court said in an opinion written by Judge Richard G. Taranto.

The president has power to act “to alleviate threats to national security from imports” under §232 on the recommendation of the commerce secretary.

When the president “adopts a plan of action that contemplates future contingency-dependent modifications,” the time limits of §232 don’t bar the addition of later tariffs “to help achieve” the original national-security objective “where the underlying findings and objective have not grown stale,” Taranto said, citing the court’s own 2021 ruling.

In 2018, pursuant to §232, the secretary of commerce reported to the president that steel imports threatened national security by contributing to unsustainably low levels of use of domestic steel-producing capacity.

In response, the president issued Proclamation 9705 on March 8, 2018, to adopt a plan of action to address that threat, starting with imposition of higher tariffs on steel imports from certain countries but providing for monitoring and future adjustments if needed.

In 2020, the president issued Proclamation 9980 on Jan. 24, 2020, which raised tariffs on imports of steel derivatives, based on the monitoring language of 9705.

PrimeSource Building Products Inc., Oman Fasteners LLC, Huttig Building Products Inc., and Huttig Inc., challenged the proclamation, arguing that the extension of the increased tariffs to derivatives violated the time limits for presidential action in §232.

The Biden administration defended the proclamation, saying “any sensible assessment of the issue establishes that Proclamation 9980 is firmly rooted in its originating action, Proclamation 9705.”

Judges Raymond T. Chen and Kara F. Stoll joined in the opinion.

Mowry & Grimson PLLC represented PrimeSource Building Products Inc. Perkins Coie LLP represented Oman Fasteners LLC, Huttig Building Products Inc., and Huttig Inc.

The case is PrimeSource Bldg. Prods. v. United States, 2023 BL 38181, Fed. Cir., 2021-2066, 2/7/23.