On June 27, 2018, 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, filed suit in the United States Court of International Trade, challenging the constitutionality of Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862), the statute under which President Trump imposed a 25% tariff on imported steel.
The Court of International Trade is an Article III court that is at the same level as federal district courts, but its jurisdiction is defined by subject matter rather than geography. Additionally, the Court has exclusive jurisdiction over all cases involving the regulation of international trade, including customs classification and valuation.
Congress enacted Section 232 during the Cold War when national security issues were at the forefront of national debate. Section 232 provides the President with the ability to impose restrictions on certain imports based on an affirmative determination by the Department of Commerce (Commerce) that the product under investigation “is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.” Section 232 actions are of interest to Congress because they are a delegation of Congress’s constitutional authority “To lay and collect … Duties” and “To regulate Commerce with foreign Nations.”
Based on concerns about global overcapacity and certain trade practices, in April 2017 the Trump Administration initiated Section 232 investigations on U.S. steel and aluminum imports. Effective March 23, 2018, President Trump applied 25% and 10% tariffs, respectively, on certain steel and aluminum imports.
The lawsuit seeks a declaration that the law relied on by President Trump to impose a 25% tariff on imported steel is unconstitutional, as well as a court order enjoining further enforcement of the tariff.
Additionally, the lawsuit alleges that Section 232 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.
The Plaintiffs argue that if the president is allowed to impose tariffs for such vaguely defined reasons, "there is nothing he cannot do through tariffs, quotas, and similar remedies to bring about whatever result he thinks desirable, for any reason whatsoever." And if the court buys the government's argument for a broad reading of "national security" and upholds Trump's tariffs, it will effectively be signing off on limitless executive power in the realm of economic policymaking.
A three-judge panel will listen to oral arguments during the first scheduled hearing on December 19, 2018.