Importers should act quickly to preserve their right to a potential refund of Section 232 tariffs on steel and aluminum derivative articles that could result from a new court case challenging the way those tariffs have been assessed.
Presidential proclamations imposing Section 232 tariffs on imported articles containing steel and aluminum provide that those tariffs shall apply only to the articles’ steel or aluminum content. A list of frequently-asked questions published on U.S. Customs and Border Protection’s website states that the value of steel or aluminum content of an article refers to the invoice price paid by the buyer of that content. However, an informal memo created by CBP’s Base Metals Center of Excellence and Expertise states that, with respect to articles that are wholly of steel or aluminum, Section 232 tariffs are to be assessed on the full value of the article (including production costs) rather than just the value of its steel or aluminum content.
On Jan. 27 an importer filed suit against CBP at the Court of International Trade, challenging the CEE’s memo and CBP’s reliance on it to assess Section 232 tariffs on the full value of screws and bolts at liquidation rather than on just their steel content.
The complaint alleges that CBP violated the rulemaking requirements of the Administrative Procedure Act and 19 USC 1625 by failing to subject the informal memo to notice and comment procedures. The plaintiff also claims that CBP’s assessment of Section 232 tariffs on the higher of two values—the full value of steel derivative products like its screws and bolts rather than just their steel content—violates the valuation statute (19 USC 1401a(f)(2)). Finally, the case alleges that CBP violated the Paperwork Reduction Act.
In light of this lawsuit it is likely that CBP will suspend all current and future protests concerning the same issue pending a decision by the CIT. To preserve their right to a refund of the challenged tariffs if the court rules against CBP, we recommend that importers file protests on this issue. If an importer would like to bring its case directly to court it can request accelerated disposition of its protest; however, it is not necessary to do so to obtain the benefit of a favorable ruling.
For more information on this case and what action your business should take in response, please contact ST&R.
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