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Appeals court rejects Section 232 steel challenge

A three-judge panel at the U.S. Court of Appeals for the Federal Circuit this week rejected a challenge of the national security-based statute President Trump has utilized to impose restrictions on steel imports.

The case, initiated by the American Institute for International Steel in June 2018, focused on whether the delegation of power under Section 232 of the Trade Expansion Act of 1962 was constitutional. AIIS argued Congress cannot delegate its legislative powers to federal agencies without giving “intelligible” guidance on which to base its recommendations, an idea known as the “non-delegation doctrine.”

Trump in March 2018 imposed Section 232 tariffs on some steel and aluminum imports after the Commerce Department declared them threats to national security.

The appeals court was handed the case last August after the U.S. Court of International Trade in March 2019 ruled that a 1970s-era case, in which Algonquin SNG Inc. unsuccessfully challenged the imposition of license fee programs on imports of petroleum goods, served as binding precedent. After an oral argument last month in Washington, DC, the appeals court decided to back the CIT’s determination, arguing the issue was still controlled by the Supreme Court’s Algonquin decision that said Section 232 did not violate the non-delegation doctrine.

“The Court’s ruling in Algonquin answers the question of the constitutionality of section 232 presented here,” the opinion states. “The Court’s rejection of the nondelegation-doctrine challenge to section 232 was a necessary step in the Court’s rationale for ultimately construing the statute as it did, and the constitutional ruling is therefore binding precedent…. Moreover, the rationale of the Court’s rejection of the nondelegation-doctrine challenge rests on the determination that the standards governing the President’s and Secretary’s determinations under section 232 are constitutionally adequate. The same standards are at issue here.”

The court cited the Algonquin ruling in arguing that Section 232 “establishes clear preconditions to Presidential action” and said “the leeway that the statute gives the President in deciding what action to take in the event the preconditions are fulfilled is far from unbounded.”

“In short, there has been no material change to the judicial review of presidential action pursuant to section 232 that undermines the controlling force of Algonquin,” the order adds.

The case likely will be appealed to the Supreme Court, which deflected an attempt by AIIS last June to hear the argument before consideration by the Court of Appeals. The steel group, in its April 2019 petition, said while the Supreme Court normally awaited the judgment of the Court of Appeals before granting review, its challenge was “not an ordinary case.” It said the public interest would be “better served” by the highest court’s prompt review.

 

Source: Inside Trade

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