Leibowitz on Trade: Tariffs, Court Case in the News

1. Canada’s tariffs went into effect today, July 1. Tariffs of 25 percent on many metal products from the U.S. were imposed, and 10 percent duties were placed on about 250 other products, including whiskey (a favorite of tariff retaliators because of its origin in Kentucky, Sen. Mitch McConnell’s home state), beer kegs (Ohio) and orange juice (Florida). The EU, Turkish and Mexican retaliatory tariffs went into effect earlier in June (June 5 for Mexico, June 21 for Turkey and June 22 for the EU). India and Russia also have notified the WTO that they intend to retaliate.
2. There was no progress on negotiations to avoid imposition of tariffs on about $34 billion worth of imports from China, effective July 6. China’s retaliation tariffs also will go into effect on July 6, covering a similar amount of U.S.-China trade.
3. The American Institute for International Steel (AIIS), Simtex LP and Kurt Orban Partners announced a lawsuit against the Section 232 steel tariffs in the Court of International Trade on Wednesday. The suit alleges that Section 232 of the Trade Expansion Act of 1962, as amended, is an unconstitutional delegation of legislative power to the executive branch of government. The statute, according to the complaint, “does not contain an intelligible principle from the Congress that the President must use when imposing tariffs or quotas….” It also alleges that the statute is unconstitutional because “there is no judicial review of the President’s determination under section 232.” Both points are serious and have serious implications but may or may not be true. However, if the courts were to rule that neither the Commerce Department’s report nor the president’s proclamation were subject to judicial review, the argument of an unconstitutional delegation of legislative power to the president would clearly be strengthened. The complaint does not ask the Court of International Trade for a preliminary injunction or a temporary restraining order, although such relief may be requested later.
4. Everett Eissenstat, Deputy Director of the National Economic Council and Deputy Assistant to the President for International Economic Affairs, has announced his departure from the White House. The Financial Times reported that he is leaving for personal and family reasons and not because of policy differences. Having known Everett for more than 20 years, I know he understands the value of trade and the rules-based trading system. He said in an interview that he expects to move to the private sector after more than two decades in government service. Eissenstat is a long-time veteran in international trade, having served on Capitol Hill (both House and Senate side), the U.S. Trade Representative’s office and the White House.

This week could well see more action from our trading partners and perhaps more action on the litigation front, as well.

Lewis Leibowitz

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