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March 15, 2021

Court Rejects Challenge To The Section 232 Exclusion Process

On March 11, the U.S. Court of International Trade (CIT) rejected a constitutional challenge to the U.S. government’s exclusion process for its Section 232 steel and aluminum tariffs. The CIT addressed whether the modified process created by the U.S. Department of Commerce for requesting exclusions violated the Uniformity Clause that generally requires uniform taxation across all states and across the same products.

The CIT ruled it did not. Click here to read a full analysis of the decision.

As S&P Global Platts reminded readers, when the tariffs were put in place in 2018, the Commerce Department was authorized to exclude aluminum and steel articles from the tariffs if the particular article was “determined not to be produced in the US in a sufficient and reasonably available amount or of a satisfactory quality” and took into account national security considerations.

In related news: the Aluminum Association has released its latest “Trends in 232 Product Exclusions” report, which shows how aluminum users are continuing to request massive volumes of aluminum product exclusions to the Section 232 tariffs. Members of the association can view the full report here.

As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA).

MSCI also asked that Canada and Mexico be excluded from any trade penalties.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.