On March 25, 2019, the U.S. Court of International Trade (CIT) in American Institute for International Steel, Inc., Sim-Tex, LP and Kurt Orban Partners, LLC v. United States, held that Section 232 duties imposed on certain steel and aluminum imports by President Trump were constitutional. The three-judge panel denied the American Institute for International Steel’s challenge to the Section 232 duties.
In its decision, the Court held it was bound by the Supreme Court precedent in Algonquin that section 232 does not violate the delegation of powers. The Court expressed concern that section 232 allows for a “gray area” with respect to the separation of powers. Still, it acknowledged that “the broad guideposts of subsections (c) and (d) of section 232 bestow flexibility on the President and seem to invite the President to regulate commerce by way of means reserved for Congress, leaving very few tools beyond his reach.” Unlike government agencies, the President is not subject to the Administrative Procedure Act (“APA”). The Court explained that “the judicial review would allow neither an inquiry into the President’s motives nor a review of his fact-finding”. As a result, the Court found that “such concerns are beyond the court’s power to address, given the Supreme Court’s decision in Algonquin.”
In a rarely used move, Judge Katzmann issued a “dubitante” opinion (which concurred with the majority’s conclusion while suggesting an alternative view), and expressed “grave doubts” that section 232 “passes constitutional muster”. Judge Katzmann joined the majority in light of the binding precedent in Algonquin, but calls for a revisit of the issue because section 232 “provides virtually unbridled discretion to the President with respect to the power over trade that is reserved by the Constitution to Congress.”
Plaintiff American Institute for International Steel immediately announced that it intends to appeal this decision. The case was a second lawsuit against the President’s section 232 tariffs. In an earlier case, the Court denied Severstal Export Gmbh’s challenge for a preliminary injunction that would have stopped the President’s 232 tariff from being imposed.
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