A scholar at the market-oriented Mercatus Center, a research organization at George Mason University, said that although 25% tariffs on steel and 10% tariffs on aluminum have now been in place for three years, there's no sign they've successfully reduced global overcapacity in those metals. Christine McDaniel, a senior research fellow at the center, cited a Wall Street Journal article that found that the steel industry was not revived by the price protection from imports. McDaniel wrote in a research paper that the administration should be asked what it would achieve to leave the tariffs in place indefinitely. But if they are to stay, McDaniel said the exclusions process should be reformed.
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
The following lawsuits were filed at the Court of International Trade during the week of March 8-14:
Sen. Rob Portman, R-Ohio, one of the leaders of an effort to give Congress more of a voice in Section 232 tariffs, reintroduced a bipartisan bill with six co-sponsors that would give the Defense Department responsibility for certifying that imports are a national security threat, and would allow Congress to rescind trade restrictions under Section 232 through the use of a joint resolution of disapproval. Portman explained that disapproval is limited to oil restrictions, and that was added to the statute in 1980 “in response to concerns about the misuse of the statute.”
The Department of Justice declined to submit additional arguments in defense of President Donald Trump's decision to expand Section 232 steel and aluminum tariffs to steel derivatives beyond its original argument in front of the Court of International Trade, guaranteeing that the court will overturn the steel derivatives tariffs but allowing for an appeal.
The U.S. Court of International Trade dismissed a challenge to the Section 232 steel and aluminum tariffs' exclusion process, finding that the importer-specific exclusion process is constitutional. In the case, steel importer Thyssenkrupp Materials and its subsidiaries said that by excluding individual importers from the tariffs, the process violated the Constitution's uniformity clause by discriminating against steel and aluminum importers based on geography (see 2004230053). Thyssenkrupp also held that the exclusion process was inconsistent with presidential proclamations dictating how the exclusions should be conducted. Judges Claire Kelly, Gary Katzmann and Jane Restani in their March 10 opinion were unconvinced of both arguments and granted the government defense's motion to dismiss the case.
Congress should repeal the Section 232 provisions that allow the president to impose tariffs in response to national security threats, Cato Institute Senior Fellow Scott Lincicome and Research Fellow Inu Manak said in a policy analysis released March 9. The statute is "superfluous given the expansion of presidential trade and other national security powers in laws enacted" since Section 232 became law in 1962, they said. Absent the appetite for a full repeal of the tariffs -- Lincicome and Manak's first proposal -- the writers floated other options for congressional changes, including amending the law to hand final say over Section 232 to Congress, providing for judicial review, narrowing what constitutes “national security,” moving Section 232 investigations to an independent agency and including a public interest provision.
The tariffs on British goods on the Airbus list will be lifted for four months to create space for settling the Airbus-Boeing dispute between the United Kingdom and U.S. The U.K. had already suspended its tariffs on American goods over Boeing subsidies on Jan. 1. That suspension will also last another four months. The tariffs on British imports were lifted immediately.
U.S. trade representative nominee Katherine Tai said that despite the president's prioritizing of the domestic economy, “I don't expect, if confirmed, to be put on the back burner at all.” Tai, a veteran of the House Ways and Means Committee trade staff, faced largely friendly questioning over a more-than-three-hour hearing in the Senate Finance Committee on Feb. 25.
Thompson Hine trade attorney Dan Ujczo expects the only activity on trade in the first eight months of Joe Biden's presidency will be on issues either so small that they don't make a splash -- such as the Miscellaneous Tariff Bill and the Generalized System of Preferences benefits program -- or on issues that have an immediate need for action.
Importers of steel and aluminum could be facing higher antidumping duty rates, after the Court of International Trade ruled Feb. 17 that Section 232 tariffs are a form of normal import duties that should be deducted from foreign exporters' U.S. prices in AD duty rate calculations. The trade court held that, unlike Section 201 safeguard duties and AD/CV duties, which are not deducted, the national security-based Section 232 tariffs have a different purpose unrelated to remediating injury from an import surge or underpriced imports.