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AIIS seeks Supreme Court intervention on 232

Apr 16, 2019 | 04:24 PM | Chicago | Michael Cowden

Tags  American Institute for International Steel, AIIS, Supreme Court, Section 232, Donald Trump, Customs and Border Protection, CBP, Kevin K. McAleenan imports

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.

The urgency of the matter justified going straight to the highest court in the US and bypassing the US Court of Appeals for the Federal Circuit, the AIIS said.

“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.

A three-judge panel at the Court of International Trade (CIT) ruled against the AIIS on March 25, with the trade group subsequently vowing to take its fight to the Supreme Court.

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 President Donald 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 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 ($652.60 per short ton), 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 $34.38 per cwt on April 16 - 25% below the July high.


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