AIIS Files to Take Battle Over Trump's Tariff Power to the High Court

A U.S. Court of International Trade panel last month expressed reservations about the wide authority granted to the president under the law — Section 232 of the Trade Expansion Act of 1962 — but said it was nevertheless bound by a 1976 high court ruling that upheld the statute.

The ruling dealt a loss to a group of importers assembled as the American Institute for International Steel. AIIS has argued that by passing Section 232, Congress gave away its authority over trade policy to the White House without offering any guidance or limitation to how it should be carried out and violated the Constitution’s so-called nondelegation principle.

In the importers’ opinion, Section 232 essentially acts as a blank check for the White House to impose whatever import restrictions it wants, regardless of any actual security risk.

“Under Section 232, the president may not only choose among imposing tariffs, quotas, embargoes … or a combination of them — but there are no limits on the scope, duration, or amount of any remedy, nor is there a requirement that it be tied to any factual finding,” AIIS told the justices in its certiorari petition Monday.

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Trump used Section 232 to impose a 25 percent levy on steel and 10 percent tariff on aluminum last year after deeming those imports a threat to national security, and is considering whether to do the same for imported cars and auto parts. Critics have accused the White House of using security as a thin veil for economic protectionism.

Section 232 lay mostly dormant for years before Trump revived it, sparking a fierce legal clash over whether the law is an outdated relic of Cold War economic paranoia.

There has not been a successful nondelegation claim since 1935, and most observers view the AIIS case as something of a long shot. Also standing in the importers’ way is the fact that the high court already considered a nondelegation claim for Section 232 in the 1976 case Federal Energy Administration v. Algonquin and upheld the statute.

But the importers have taken pains to draw a distinction between Algonquin and the current battle over the steel and aluminum duties. For one, the importers said that the Algonquin court considered only whether the president’s decision to impose import fees rather than quotas was unconstitutional, while the current case asks a much broader question about the statute itself.

AIIS also argued that case law since 1976 has effectively erased the ability of parties to mount legal challenges against decisions that are left to the sole discretion of the president. The lack of meaningful judicial review only strengthens the view that Section 232 is an overly broad delegation of power to the White House, the importers say.

The CIT rebuffed both of those arguments, and AIIS has now asked the Supreme Court to either rule that Algonquin does not apply to the current case and examine the facts of its claim anew, or to simply reverse its Algonquin decision outright.

Still, the most pressing question is whether the case is ripe for Supreme Court consideration at all. The parties agreed to use a unique CIT rule to have their case heard by three judges rather than one, and AIIS said that it should now bypass review by the Federal Circuit and go straight to the high court.

“Having a second three-judge panel hear the same case is a waste of judicial resources, especially because the decision of the CIT as to the scope of the ruling in Algonquin can only be authoritatively determined by this court,” AIIS said.

The importers also underscored the urgency of the case by citing the heavy costs of Trump’s steel and aluminum tariffs, which have tallied $4.5 billion and $1.5 billion, respectively, and the fact that Trump may soon use the law again to restrict imports of cars.

“It is therefore essential for everyone — the president, Congress, and every person whose livelihood is dependent on imports of these products — to know whether Section 232 is constitutional,” AIIS said.