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Steel 'Derivative' Tariff Liquidation Should Be Stayed Pending Federal Circuit Appeal, DOJ Says

The Court of International Trade should stay liquidation of PrimeSource Building Products' imports of steel "derivatives" and reinstate the requirement of PrimeSource to monitor future derivative imports and maintain a sufficient continuous bond, pending an appeal of the steel derivative decision, the Department of Justice said in a June 9 filing.

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In the case, a three-judge panel previously found that the Section 232 tariff extension to steel derivatives violated statutory time limits (see 2104050049). PrimeSource successfully argued that the tariffs were announced well after the 105-day deadline for tariff action following the Commerce Department's report that led to the initial imposition of Section 232 steel tariffs in 2018. DOJ informed the court of its appeal in a June 4 filing.

DOJ wants a partial stay from the court on three issues: (1) the order to liquidate PrimeSource's entries, (2) the suspension of liquidation on PrimeSource's entries and (3) the requirement for PrimeSource to "continue to monitor its subject imports and foregone duty deposits," in order to maintain the status quo before the decision. Without such orders, the government will be irreparably injured, DOJ said. "Absent a stay of the order to liquidate and reinstatement of the order to suspend liquidation, CBP may be unable to assess and collect duties on entries that liquidate during the pendency of the appeal," the brief said.

PrimeSource's importation bond will also be crucial in maintaining that the government does not suffer from "potentially millions of dollars in revenue loss," since such a bond would ensure the government receives the duties it is due if its appeal is successful. Irreparable harm could also befall CBP in the form of administrative costs in any attempt to regain money issued out in refunds, DOJ said.

DOJ also backed its request for a partial stay by claiming that such orders would not injure other parties, namely PrimeSource, and that the government has a real shot at success in the Federal Circuit. "There is a likelihood that the Court of Appeals for the Federal Circuit could find Proclamation 9980 to be a valid exercise of the broad authority Congress granted the President in Section 232," DOJ said. "Neither this Court nor the parties questioned that, prior to 1988, Congress intended the President to exercise continuing authority under Section 232 and that the President, in fact, exercised that continuing authority over the course of years without returning to the Secretary of Commerce (or predecessor advisor) for a new investigation and report."