In a March 10 ruling the Court of International Trade upheld the Department of Commerce’s process of considering exclusions from the Section 232 tariffs on steel and aluminum products.

The presidential proclamations imposing the tariffs authorized the DOC, following requests by directly-affected parties in the U.S., to grant exclusions for articles determined not to be produced in the U.S. in a sufficient and reasonably available amount or of a satisfactory quality. In its regulations establishing this process the DOC said it would approve exclusions on a product basis and limit them to the individual or organization that submitted the request unless it approved a broader application of the exclusion to additional importers.

The plaintiff argued that because the exclusion process failed to grant exclusions to all importers of the same goods, the Section 232 tariffs do not have the same force and effect in every place where the subject of the tariff is found, thereby violating the Uniformity Clause of the Constitution. However, the CIT said that under a 1983 decision the Uniformity Clause is satisfied when the subject of a tax is defined in non-geographic terms, and both the proclamations establishing the Section 232 tariffs and the DOC regulations setting forth the exclusion process use non-geographic terms in defining those affected.

The plaintiff also argued that the proclamations directed the DOC to provide exclusions for steel or aluminum articles rather than individual importers, which it believes should have resulted in exclusions being automatically granted to all importers of excluded articles without them having to submit their own requests. However, the CIT found no indication that Section 232 itself or the proclamations required broader product-based exclusions or that not providing such exclusions would be inconsistent with the purpose of the tariffs. Instead, the CIT determined that the proclamations give the DOC discretion to “fill in the statutory gap regarding the details” of the exclusion process and that the DOC’s regulations fulfilling that charge are entitled to deference because they are a reasonable interpretation of the proclamation texts.

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