Potential challenges to Section 232 steel/aluminum tariffs

January 28, 2020

A legal challenge to the Section 232 tariffs on imported steel and aluminum has been filed in the U.S. Court of International Trade. The challenge seeks to prove that the Secretary of Commerce’s interpretation of the term “national security,” upon which the tariffs are based, is invalid. According to court documents, the findings in the report do not demonstrate a threat to national defense or the national economy. “The statute cannot reasonably be interpreted to permit a positive finding based only on one industry’s competitive disadvantage.” The filing also claims that the exclusion process is “arbitrary, capricious and contrary to law.” The Coalition of American Metal Manufacturers and Users (CAMMU), of which NAFEM is a member, participated in the legal challenge.

Pending WTO ruling unlikely
An outstanding dispute related to the Section 232 tariffs, brought against the U.S. by numerous countries last year, is pending at the World Trade Organization (WTO). In the past, if a country lost a dispute at the WTO, challenging countries could be authorized to retaliate against it with tariffs of their own. This is the same mechanism that ended prior to U.S. tariffs on global steel imports in the early 2000s. This, however, is an unlikely outcome in 2020 since the U.S. has blocked appointments to the WTO’s Appellate Body since 2016. The organization does not have the quorum needed to render decisions.

More Section 232 tariffs possible
Christine Sohar Henter, NAFEM legal counsel, Barnes & Thornburg, advises that, given the administration’s preference to rely on national security as the basis to impose Section 232 tariffs, other potential Section 232 investigations could be announced in 2020, including uranium, titanium sponges, automobile parts and others.

In the meantime …
There has been no further action from the White House on President Trump’s tweet threatening to impose tariffs on steel imported from Brazil, and steel and aluminum imported from Argentina.

Exclusion process continues
Companies can apply for exclusions from Section 232 tariffs if a steel/aluminum product is not available domestically in sufficient quantity or quality. Requests are filed at the Department of Commerce’s (DOC) portal. DOC provides a user guide and Q&A . Additional resources and media coverage are available on the CAMMU website.

Categorized in: Advocacy News, Taxes, Tariffs & Trade