Two steel companies and an industry group known for its free trade views are suing to block the Section 232 tariffs that are supposed to stop the flood of foreign-made steel.
Texas-based SIM-TEX, Kurt Orban Partners of California and the Washington D.C.-based lobbying group the American Institute for International Steel filed a federal lawsuit on Wednesday challenging the legality of Section 232 investigations, which are authorized in the 1962 Trade Expansion Act.
Section 232 enabled the administration to impose a 25 percent tariff on all imported steel on the grounds that the damage imports do to American steel companies constitutes a threat to national security. Administration officials reasoned the United States should not be dependent on foreign-made steel if the country ever again needs to manufacture tanks, ships and aircraft carriers for a major war.
The lawsuit asks the Court of International Trade to scrap the tariffs, arguing Congress unconstitutionally deferred its powers to the president in the 1962 trade act, and that there is no provision in the law for judicial review, allowing for a too-broad interpretation without checks and balances.
“In addition to the totally open-ended choice of how to counter any threat that imports may present, Section 232 allows the president to consider virtually any effect on the U.S. economy as part of ‘national security,’” AIIS President Richard Chriss said in a release.
The American Iron and Steel Institute, the largest trade group representing the steel industry, dismissed the legal challenge as little more than an inconsequential legal nettle.
“We believe this case is without merit and we are confident the court will reject this challenge to the constitutionality of the Section 232 statute,” American Iron and Steel Insitute President Thomas Gibson said in a release. “Congress acted within its constitutional authority when it authorized the president to take action to adjust imports when the Secretary of Commerce has determined that such imports threaten to impair the national security.”
Imposed in March after years of near-record imports, the tariffs finally seem to be having an impact. Steel imports declined by 23 percent month-over-month in May, according to AISI.
But the AIIS contends the Section 232 tariffs have resulted in price increases of more than 50 percent, giving members such as railroads, transportation companies and union locals difficulty in obtaining steel.
“Unlike most cases brought against actions of the Trump administration, it is Congress — through its delegation of unfettered discretion to the President in this statute — and not the president that is the violator of the Constitution,” attorney Alan Morrison said. “The president simply took advantage of the opportunity to impose his views on international trade on the American people, with nothing in the law to stop him.”