AIIS files lawsuit to challenge Trump’s steel tariffs

(Posted on 04/07/18)

The American Institute for International Steel (AIIS) and two of its member companies, SIM-TEX, LP, of Waller, Texas, and KURT ORBAN PARTNERS, LLC, of Burlingame, California, have filed suit in the United States Court of International Trade in New York City challenging the constitutionality of the statute under which President Trump imposed a 25% tariff on imported steel. The lawsuit seeks a declaration that the law relied on by President Trump to impose that tariff is unconstitutional, as well as a court order preventing further enforcement of the 25% tariff increase.

In its lawsuit, AIIS and the two companies allege that the statute, Section 232 of the Trade Expansion Act of 1962, violates the constitutional prohibition against Congress delegating its legislative powers to the President because it lacks any “intelligible principle” to limit the discretion of the President. Section 232 allows the President to impose unlimited tariffs or create other trade barriers at his unfettered discretion if he believes they are needed so that “imports will not threaten to impair the national security,” which is expansively defined in Section 232.

“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’,” said AIIS President Richard Chriss.

AIIS is America’s leading voice for the steel supply chain, and the only voice in Washington, D.C. for free and responsible trade in steel. Its members depend in a variety of different ways on imported steel for their economic well-being. Most of the members of AIIS – which include railroads and other transportation companies, port authorities, union locals, traders and logistics companies–do not pay the tariff increase directly. Their businesses and employees are harmed because the tariff increase significantly reduces the amount of steel imported into the United States—its intended effect—thereby reducing their revenues, and the hours and possibly jobs of their workers, which are dependent in significant part on how much product their businesses handle.

The steel tariff has numerous additional negative effects on U.S. business. American ports and their workers are seeing a sharp drop in throughput in their own businesses. In addition, U.S. steel-using manufacturers are encountering product price increases of 50% or more and are experiencing difficulty in obtaining the steel they need, regardless of whether they buy domestic-sourced or imported steel.

The AIIS complaint also rests on another constitutional flaw in the law, which plaintiffs say violates the doctrine of separation of powers and the system of checks and balances that the Constitution protects: there is no provision for judicial review of the President’s decisions in how he responds to the perceived threat to national security from imported steel. Moreover, recent Supreme Court cases have precluded judicial review of discretionary decisions by the President under similar statutes, and the Justice Department in a recent case involving this very tariff has stated that the courts cannot rule on whether the President has complied with the law.

“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,” noted Alan Morrison, lead counsel for the plaintiffs. “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.”

Morrison also pointed out that the lack of judicial review, on top of the completely unmoored powers of the President, “represents a far more dangerous threat to our democracy than any steel imports ever could.”
With their complaint, plaintiffs filed a motion asking the Chief Judge of the Court of International Trade to appoint three judges, instead of a single judge, to hear this case. That request is supported by a specific federal statute and a rule of the Court that authorize such an appointment when a case presents a constitutional challenge or has “significant implications” for the administration of the law. Plaintiffs believe that if the case is decided by a three judge court, there is a direct appeal to the Supreme Court, without having to go to the Federal Circuit, which is the normal review court for the Court of International Trade. That route would provide a speedier means of resolving this case, which is in the interest of all concerned.