Economy

Trump's Tariffs Vulnerable to Legal Challenge

March 12, 2018

Legal experts say President Trump’s efforts to use the Section 232 steel tariffs as a bargaining chip with NAFTA and other trade negotiations could make the U.S. position more difficult to defend before the World Trade Organization and the courts. An importer hit with the tariff could claim the president had exceeded his authority under Section 232 of the Trade Expansion Act of 1962, arguing that the tariffs were imposed for reasons other than national security.

Comments by President Trump repeatedly link the steel tariffs with other trade issues, casting doubt on the argument that the tariffs are about national defense. “NAFTA is under work right now… They said we don’t want to pay tariffs. I said let’s make a deal on NAFTA. And if you make a decent deal, a fair deal for the American worker, the American people, you will have no problem with the tariff,” Trump commented recently. In a March 10 tweet on trade with the EU, he said: “The European Union, wonderful countries who treat the U.S. very badly on trade, are complaining about the tariffs on Steel & Aluminum. If they drop their horrific barriers & tariffs on U.S. products going in, we will likewise drop ours. Big Deficit. If not, we Tax Cars etc. FAIR!”

Grant Aldonas, former Undersecretary of Commerce during the Bush administration, told Inside U.S. Trade that the Trump administration has “undermined whatever scant legal authority they had to begin with” in their pursuit of tariffs on national security grounds and that the courts are likely to be skeptical when the tariffs are inevitably challenged. Aldonas will be a featured speaker at the Steel Market Update Steel Summit Conference Aug. 27-29 in Atlanta.