Universal Steel Prods., Inc. v. United States

• Decision Date: 04 February 2021
• Docket Number: Court No. 19-00209,Slip Op. 21-12
• Citation: 495 F.Supp.3d 1336
• Parties: UNIVERSAL STEEL PRODUCTS, INC., et al., Plaintiffs, v. The UNITED STATES, et al., Defendants.
• Court: U.S. Court of International Trade

495 F.Supp.3d 1336

UNIVERSAL STEEL PRODUCTS, INC., et al., Plaintiffs,

v.The UNITED STATES, et al., Defendants.

Slip Op. 21-12

Court No. 19-00209

United States Court of International Trade.

February 4, 2021

OPINION and ORDER

Per Curiam:¹

The primary question before us is whether Proclamation 9705 and a series of subsequent modifications to it issued by the President, imposing heightened tariffs on steel imports on the grounds that they threaten to impair the national security of the United States, violate Section 232 of the Trade Expansion Act of 1962, codified as amended at 19 U.S.C. § 1862 ("Section 232"). We conclude that Proclamation 9705 and its subsequent modifications do not violate that statute.

Plaintiffs Universal Steel Products, Inc., PSK Steel Corporation, The Jordan International Company, Dayton Parts, LLC, and Borusan Mannesman Pipe U.S. Inc. (collectively, "Plaintiffs") are U.S. corporations that import steel from foreign nations and claim injury based on tariffs imposed by the President under Section 232. Am. Compl. at 1, Dec. 11, 2019, ECF No. 11. Plaintiffs brought this action against naming as defendants the United States, and various officers of the United States in their official capacities (the President of the United States, the Secretary of Commerce, and the Acting Commissioner of Customs and Border Protection) (collectively, "the Government"), seeking equitable and legal relief for tariffs on certain steel products. Am. Compl. at 1. To defeat Plaintiffs’ challenge to these Proclamations, the Government moved for judgment on the pleadings. Def.’s Mot. for J. on the Pleadings at 7, Apr. 9, 2020, ECF No. 32 ("Def.’s Br."). Plaintiffs oppose this motion. Pls.’ Br. in Opp'n to Def.’s Mot. for J. on the Pleadings, Apr. 28, 2020, ECF No. 35 ("Pls.’ Br."). Plaintiffs have also filed a cross-motion for partial summary judgment. Pls.’ Cross-Mot. for Summ. J., Oct. 12, 2020, ECF No. 56.

BACKGROUND

I. Legal and Regulatory Framework for Action Under Section 232 Generally

With its genesis in the Cold War, Section 232 was enacted by Congress in 1962, authorizing the President to adjust imports that pose a threat to the national security of the United States. Section 232 directs that, upon receipt of a request from the head of a department or agency, upon application of an interested party, or sua sponte, the Secretary of Commerce is to conduct an "appropriate investigation to determine the effects on the national security of imports of the article which is the subject of such request." 19 U.S.C. § 1862(b)(1)(A). The Secretary shall, "if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation." 19 U.S.C. § 1862(b)(2)(A)(iii). The Secretary of Commerce must "provide notice to the Secretary of Defense" of the investigation's commencement and, in the course of the investigation, "consult with the Secretary of Defense regarding the methodological and policy questions raised[.]" 19 U.S.C. § 1862(b)(1)(B) ; 19 U.S.C. § 1862(b)(2)(A)(i). The Secretary of Commerce must also "(ii) seek information and advice from, and consult with, appropriate officers of the United States, and (iii) if it is appropriate and after reasonable notice, hold public hearings or otherwise afford interested parties an opportunity to present information and advice relevant to such investigation." 19 U.S.C. § 1862(b)(2)(A)(ii)–(iii).

The statute provides that, within 270 days of commencing the investigation, the Secretary shall submit a report to the President summarizing the investigation's findings and offering recommendations for action or inaction; in addition, if the Secretary concludes the subject article's imports are in quantities or under circumstances that "threaten to impair the national security," the report shall indicate that finding. 19 U.S.C. § 1862(b)(3)(A). If the Secretary finds a threat to national security, the President then has ninety days from his receipt of the report to determine whether he concurs with the Secretary's finding. 19 U.S.C. § 1862(c)(1)(A)(i). If the President concurs, he must "determine the nature and duration of the action that, in the judgment of the President, must be taken to adjust the imports of the article and its derivatives so that such imports will not threaten to impair the national security." 19 U.S.C. § 1862(c)(1)(A)(ii). If the President elects to take such action, the statute provides he shall "implement" that action within fifteen days after the day on which he decides to act. 19 U.S.C. § 1862(c)(1)(B). If the action chosen by the President is to negotiate an agreement with a foreign nation, and no such agreement is entered into before the date that is 180 days after the date on which the President made the determination to negotiate, or if the agreement is not being carried out or is ineffective, the President shall "take such other actions as the President deems necessary to adjust the imports of such article so that such imports will not threaten to impair the national security." 19 U.S.C. §§ 1862(c)(3)(A)(i)–(ii). Finally, section (d) lists the following factors that the Secretary and the President are to consider when acting pursuant to the statute:

(d) Domestic production for national defense; impact of foreign competition on economic welfare of domestic industries

For the purposes of this section, the Secretary and the President shall, in the light of the requirements of national security and without excluding other relevant factors, give consideration to domestic production needed for projected national defense requirements, the capacity of domestic industries to meet such requirements, existing and anticipated availabilities of the human resources, products, raw materials, and other supplies and services essential to the national defense, the requirements of growth of such industries and such supplies and services including the investment, exploration, and development necessary to assure such growth, and the importation of goods in terms of their quantities, availabilities, character, and use as those affect such industries and the capacity of the United States to meet national security requirements. In the administration of this section, the Secretary and the President shall further recognize the close relation of the economic welfare of the Nation to our national security, and shall take into consideration the impact of foreign competition on the economic welfare of individual domestic industries; and any substantial unemployment, decrease in revenues of government, loss of skills or investment, or other serious effects resulting from the displacement of any domestic products by excessive imports shall be considered, without excluding other factors, in determining whether such weakening of our internal economy may impair the national security.

19 U.S.C. § 1862(d).

II. Facts and Procedural History

On April 19, 2017, the Secretary of Commerce, Wilbur L. Ross, initiated a Section 232 investigation to determine the effects of steel imports on national security. See Publication of a Report on the Effect of Imports of Steel on the National Security, 85 Fed. Reg. 40,202, 40,208 (Dep't Commerce July 6, 2020) ("Steel Report").² The Secretary issued his report and recommendation to the President on January 11, 2018, within 270 days of initiation of the investigation, as required by 19 U.S.C. § 1862(b)(3)(A). See id. The Secretary found that the availability of steel manufactured by a healthy domestic industry is important to national defense, that steel "[i]mports in such quantities as are presently found adversely impact the economic welfare of the U.S. steel industry, that the displacement of domestic steel by excessive quantities of imports has the serious effect of weakening our internal economy, and that global excess steel capacity is weakening the domestic economy." Id. at 40,210. In light of these findings, the Secretary recommended that the President act to adjust the level of imports through quotas or tariffs on steel imported into the United States. Id. at 40,225.

The President, Donald J. Trump, concurred with the Secretary's findings and issued a series of Proclamations from March 8, 2018 to May 19, 2019. The first, Proclamation 9705, announced measures aimed at "adjusting imports of steel into the United States," and established a twenty-five percent tariff on imports of steel articles from all countries except Canada and Mexico, effective March 23, 2018. Proclamation 9705 of March 8, 2018, Adjusting Imports of Steel Into The United States, 83 Fed. Reg. 11,625, cl. 9 (Mar. 15, 2018) (" Proclamation 9705"). Additionally, the President declared in Proclamation 9705 that "any country with which [the United States has] a security relationship could discuss alternative ways to address the threatened impairment of our national security caused by imports from that country." Id.

Thereafter, the President modified Proclamation 9705 on several occasions. On March 22, 2018, the President issued Proclamation 9711 that temporarily exempted imports from Argentina, Australia, Brazil, the countries of the European Union ("EU"), and the Republic of Korea, in addition to Canada and Mexico, from the twenty-five percent tariff imposed by Proclamation 9705, pending negotiations with those countries. Proclamation 9711 of March 22, 2018, Adjusting Imports of Steel Into the United States, 83 Fed. Reg. 13,361, ¶¶ 6–9 (Mar. 28, 2018) (" Proclamation 9711"). On April 30, 2018, the President issued Proclamation 9740 that continued exempting imports from Canada, Mexico, and the EU and replaced the tariff on steel imports from the Republic of Korea with quotas. Proclamation 9740 of April 30, 2018, Adjusting Imports of Steel Into the United States, 83 Fed. Reg. 20,683, ¶ 5 (May 7, 2018) (" Proclamation 9740"). The President issued Proclamation 9759 on May 31,...