WASHINGTON—The American Institute for International Steel filed a lawsuit last week in the U.S. Court of International Trade in New York challenging the constitutionality of the statute under which President Trump imposed a 25 percent tariff on imported steel—and is preparing to do to the tune of 20 percent on imported autos.
The suit, which was joined by member companies SIM-TEX of Waller, Texas, and Kurt Orban Partners L.L.C. of Burlingame, Calif., also sees a court order preventing further enforcement of the 25 percent tariff.
The trade association argues that Section 232 of the 1962 Trade Expansion Act is unconstitutional because it allows the president unlimited ability to restrict trade on national security grounds and Congress can't delegate away all its powers without some guidance on how to act.
"In addition to the totally open-ended choice of how to counter any threat that imports may present, Section 232 allows the President to consider virtually any effect on the U.S. economy as part of 'national security,'" AIIS President Richard Chriss said in a statement.
Arguing against the unusual vagueness of the congressional delegation of authority makes the AIIS case a more serious legal challenge than one by a steel importer that argues Trump's statements indicate the motivation is protectionism rather than national defense, legal experts say.
Courts tend to defer to the executive branch in cases of national security, but the basis of the AIIS case has proven successful in other contexts, they say.
AIIS represents steel intermediaries such as railroads, port authorities, union locals, traders and logistics companies. It says they are harmed because the tariff increase significantly reduces the amount of steel imported into the U.S. and thereby reduces their revenues and working hours for employees.
The AIIS complaint also says the law violates the doctrine of separation of powers and the system of checks and balances because there is no provision for judicial review of the president's decisions in how he responds to the perceived threat to national security from imported steel.
"Unlike most cases brought against actions of the Trump administration, it is Congress—through its delegation of unfettered discretion to the president in this statute—and not the president that is the violator of the Constitution," said Alan Morrison, lead counsel for the plaintiffs. "The president simply took advantage of the opportunity to impose his views on international trade on the American people, with nothing in the law to stop him."
The plaintiffs are requesting a three-judge panel be appointed, instead of a having a single judge decide the case, so than any appeal can go straight to the Supreme Court for expedited review.
Many Republicans in Congress are unhappy with the White House's instigating a trade war with allies over steel, aluminum and autos, and using tariffs in an attempt to change China's behavior related to unfair technology acquisition.
A handful of senators support legislation that would require congressional approval for tariffs based on national security. But there is little serious support for the measure because lawmakers don't want to end up like Rep. Mark Sanford, R-S.C., who lost his primary after mildly criticizing Trump on trade and other matters. And any bill that passed Congress would need a large majority to override a certain presidential veto.
Congress lost an opportunity to curtail Trump's trade powers when it let Trade Promotion Authority, which allows trade deals to be negotiated and presented to Congress for fast-track review, to automatically renew July 1 without conditions.
Efforts to reach the White House for a response were unsuccessful.