The United States Court of International Trade (CIT) upheld Section 232 tariffs on steel imports, ruling against steel consumers who argued that former President Donald Trump imposed the duties incorrectly.
The three-judge panel in New York found that the presidential proclamation imposing the tariffs didn’t violate Section 232, and they dismissed the case on Thursday February 4.
This was the latest in a series of challenges by steel importers opposed to the imposition of the tariffs and quotas since they were put in place by Trump in 2018. Section 232 established 25% duties on imports of steel and 10% on those of aluminium.
Section 232 “grants the president latitude in evaluating whether imports threaten the national security,” the CIT judges said in their ruling.
Universal Steel Products - a Fort Lee, New Jersey-based importer, processor, and distributor of steel and aluminium coils - argued that the process of imposing the tariffs was deficient because there was no expiration date, no impending threat to national security and Trump exceeded his authority in imposing the duties on commodities.
Universal Steel Products was joined by SK Steel Corp, Jordan International Co, Dayton Parts LLC and Borusan Mannesman Pipe US Inc in making the argument.
Section 232 is part of the Cold War-era Trade Expansion Act of 1962 and allows for investigations into imports that could be detrimental to US national security. If the investigations find this to be true, Section 232 allows tariffs or other fees to be imposed on these imports.
The American Metals Supply Chain Institute (AMSCI), formerly the American Institute for International Steel, has led the fight against the Section 232 tariffs and quotas on steel and aluminium. The US Supreme Court declined to hear a case against the duties for a second time on June 22, 2020, ending the lobbying group’s challenge to the law.
AMSCI is urging President Joe Biden to eliminate the steel and aluminium tariffs, arguing that their removal will lower domestic costs and boost employment in the US metals supply chain. The protectionist policies have outlived their usefulness, AMSCI chairman John Foster said in a letter to Biden dated February 1.
The duties collected by the federal government due to Section 232 are adding up. The US Customs and Border Protection assessed almost $1.3 billion in Section 232 steel duties, and $500 million in aluminium duties in fiscal 2020, the agency said in report released on February 3. The 2020 fiscal year ran from October 1, 2019, to September 30, 2020.
Domestic steel and aluminium producers and workers support Section 232 and are urging Biden to maintain the steel and aluminium tariffs and quotas. US Steelmakers and the United Steelworkers union last month applauded Biden's executive order strengthening “Buy America” laws.
Biden reinstated aluminium tariffs on the United Arab Emirates at the start of this month, less than two weeks after they were removed, signaling to some market participants that the new administration will keep broader Section 232 tariffs in place.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $59.23 per hundredweight ($1,184.60 per short ton) on February 5, unchanged from the previous day and the highest level on record since Fastmarkets started covering this segment of the domestic steel market in 1960.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 15-16 cents per lb on Friday, unchanged since December 18 and the highest level since reaching the same range on September 15 of last year.