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Trump admin seeks Supreme end to 232 case

May 29, 2019 | 06:01 PM | New York | Yvonne Li


President Donald Trump’s administration is seeking an end to the American Institute for International Steel’s (AIIS) challenge of the Section 232 tariffs and quotas on imported steel and aluminium, according to a brief filed with the US Supreme Court.

“[The] petitioners’ argument [that the 232 duties are unconstitutional] rests on a mistaken premise. Rather than authorizing the president to adjust imports whenever he pleases, Section 232 ‘establishes clear preconditions to presidential action,’ including a finding by the Secretary [of Commerce] that an ‘article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,’” the brief claimed.

The administration contends that a 1976 Supreme Court case – Federal Energy Administration v. Algonquin SNG, Inc. – “was correctly decided, and it is consistent with [the Supreme] Court’s more recent nondelegation precedents,” the brief stated.

The US Court of International Trade (CIT) also relied on the Algonquin case in its March 25 decision to deny a motion to undo the 232 tariffs.

Following the CIT ruling, the AIIS requested that the US Supreme Court hear its case, arguing that the urgency of the matter justified the trade group in bypassing the US Court of Appeals for the Federal Circuit.

While the Supreme Court is authorized to review a case “before judgment has been rendered in the court of appeals,” the brief claimed that the AIIS had not demonstrated that a deviation from normal appellate practices was “necessary or appropriate.”

In its plea, AIIS called for the high court to “overrule” Algonquin or “limit it to its facts,” the brief noted, although the Solicitor General wrote that “those arguments lack merit.”

Countering the AIIS claims that Section 232 is “a uniquely expansive delegation of power,” given the expansion of “national security” to encompass economic interests, the brief argued that the 2018 trade measures remain substantively the same as those applied in 1976.

“The statute that the Algonquin court upheld against a nondelegation challenge, like the statute in its current form, directed the president to ‘recognize the close relation of the economic welfare of the nation to our national security’ and to consider economic effects when taking action under the statute,” the brief stated.

Hot-rolled coil prices started last year at $32.63 per hundredweight ($652.60 per short ton) before rising by 40.5% to reach a nearly 10-year peak at $45.84 per cwt in early July 2018. Fastmarkets AMM’s daily Midwest hot-rolled coil index has fallen steadily since then, declining by 35.3% to hit $29.67 per cwt on May 28.

The 232 duties were implemented against most countries early last year, and against Canada, Mexico and the European Union last June. The duties against imports from Canada and Mexico were removed earlier this month.