Steel users file suit over Trump tariff
Post-Gazette Washington Bureau
WASHINGTON — A new 25 percent tariff on imported steel faces a legal challenge from the American Institute for International Steel.
The trade group and two of its members — SIM-TEX of Texas and Kurt Orban Partners of California — filed suit Wednesday in the U.S. Court of International Tradein New York.
The plaintiffs — who are users of steel, not producers — seek to block the tariff on constitutional grounds. They argue that the tariff was imposed under a section of the 1962 Trade Expansion Act that they say is unconstitutional. They contend it violates the separation of power provision of the Constitution, and that only Congress, not the president,can impose taxes.
“The Constitution gives complete responsibility for trade, 100 percent, to Congress. That’s what this country is founded on: No taxation without representation,” said Gary Horlick, an international trade attorney who supports the plaintiffs’ position.
Section 232 of the Trade Expansion Act allows the president to impose tariffs on goods whose import could pose a national security risk. President Donald Trump invoked that clause after a Commerce Department finding that reliance on steel imports threatened the military’s ability to procure materials to build defense equipment. He also used it to impose a 10 percent tariff on aluminum and is considering a 25 percenttariff on imported cars.
In a February memo, Defense Secretary James Mattis said the availability of steel and aluminum does not impact his department’s ability to provide for the national defense since its requirements amount to just 3 percent of domestic production. Still, he agreed that unfair practices by foreign steel and aluminum traders do present threats to national security.
Plaintiffs say other antidumping and countervailing investigations already address unfair trade practices.
Plaintiffs’ attorney Alan B. Morrison said the statute is an abdication of Congress’authority and responsibility for the collection of taxes and a violation of the separation-of-powers clause. Compounding matters, Congress in 1962 provided little guidance and no channelfor judicial review.
“The president can do whatever he wants to protect the domestic steel industry under the banner of national security, which Congress has essentially defined to mean essentially anything that affects the American economy,” Mr. Morrison told reporters in Washington on Wednesday. “The president is essentially being told to do whatever you want to fix whatever problem you perceive.”
American producers who benefit from decreased foreign competition are on the government’s side and say the lawsuit has no merit.
“Congress acted within its constitutional authority when it authorized the presidentto take action to adjust imports when the secretary of commerce has determined that such imports threaten to impair the national security,” said Thomas J. Gibson, president and CEO of the American Iron and Steel Institute, which represents steelmakersand industry suppliers.
Members of the American Institute for International Steel include railroads, port authorities, union locals and logistics companies. Most of them do not pay the tariff directly but are adversely affected by reduced availability of imported steel.
Filed against U.S. Customs and Border Protection, the AIIS suit does not seek monetary damages. Whilethe lawsuit addresses only steel tariffs, a ruling in the plaintiffs’ favor is likely to have similar implicationsfor aluminum tariffs.
A spokesman for the Department of Homeland Security, which oversees Customs and Border Protection, said he could not comment on pending litigation.
Mr. Morrison requested that the case be heard by a three-judge panel. He hopes for a resolution by Labor Day, although other trade attorneys involved in the case suggested it could take muchlonger.
Separately, a bipartisan coalition of U.S. senators is trying to address the issue legislatively. Introduced by Sen. Bob Corker, R-Tenn., the bill would resolve AIIS’s concerns by requiring congressional approval for tariffs recommended by the WhiteHouse.