The American Institute for International Steel (AIIS) has requested that the United States Supreme Court hear its case that the President Donald Trump administration’s Section 232 tariffs and quotas on imported steel violate the US Constitution.
“Having a second three-judge panel hear the same case is a waste of judicial resources,” the AIIS said in a petition for writ of certiorari dated Monday April 15.
The AIIS’ case alleges in part that Section 232 violates the Constitution by allowing the president to act without the checks and balances that the nation’s founders intended the legislative and judicial branches of government to provide against the executive branch.
The case also targets Kevin K. McAleenan, the commissioner of US Customs and Border Protection (CBP) – the federal agency tasked with collecting Section 232 tariffs, which stand at 25% in the case of most imported steel products and 10% for imported aluminium.
The Commerce Department declined to comment, and the White House and CBP did not respond to Fastmarkets’ requests on April 16.
Section 232: The law of would-be kings?
“The Constitution provides that Congress shall make the laws, but… there are no meaningful limits on what the president can do under Section 232,” the AIIS wrote in its appeal. And unless Trump is restrained, Section 232 could be deployed to hammer imported automobiles or automobile parts “at any time.”
Experts have cautioned that Section 232 tariffs on the automobile sector could topple the rules-based global trading system embodied by the World Trade Organization (WTO).
And there is precedent for a presidential ambush on imports, given that Trump unilaterally increased tariffs against Turkey – and no other country – to 50%, the AIIS noted. “Section 232 left him completely unconstrained in deciding what tariff rates to apply, how to apply them, or that some countries should and other countries should not, be subject to this tariff,” the group added.
Through March, the US government has collected $4.5 billion in steel tariffs and $1.5 billion in aluminium tariffs – something that has cost US jobs, reduced importers’ profits and incited other countries, including US allies and trading partners, to retaliate, the AIIS said.
Straight to the Supremes
“If this court grants this petition, petitioners are prepared to meet whatever schedule the court orders so that this issue can be promptly and definitively resolved,” the AIIS said in its writ .
A nonprofit trade association , AIIS said its members collectively handle, import, ship or store 80% of all basic steel products brought into the US.
Association members petitioning the Supreme Court in the case include oil country tubular goods (OCTG) wholesaler Sim-Tex LP, which imports 40,000-45,000 tons per month from South Korea, Taiwan, Brazil, German and Italy. Another petitioner is Kurt Orban Partners LLC, which buys 200,000-250,000 tons of imported steel per year – all of it subject to 25% tariffs.
An appeal to the Federal Circuit could take a year or more, time that importers can’t afford especially given that concerns about Section 232 can be decided only by the Supreme Court, the group said.
Trump used Section 232 to justify placing tariffs and quotas on imported steel in March of last year. The measure caused US steel prices to surge to their highest point in nearly a decade. It also resulted in unprecedented price volatility.
Hot-rolled coil prices started 2018 at $32.63 per hundredweight, rising by 40.5% to an annual peak of $45.84 per cwt in early July in the aftermath of duties being extended in June to traditional US allies and trading partners in Canada, Mexico and the European Union.
Fastmarkets AMM’s daily Midwest hot-rolled coil index has fallen steadily since then to stand at $687.60 per short ton ($34.38 per cwt) on April 16 – 25% below the July high.