Steel Consumer Groups Slam Turkey Tariff Decision

“Imagine a world in which the congressionally determined statutory deadlines have no real meaning,” American Metals Supply Chain Institute (AMSCI) President Richard Chriss said. “That’s the world we would face if this decision stands. That would make rational business planning exceptionally difficult, if not impossible.”

Chriss was referring to a recent decision by the U.S. Court of Appeals for the Federal Circuit to overturn a ruling by the U.S. Court of International Trade (CIT).

A three-judge panel at the CIT had unanimously ruled that Trump overstepped his powers – and the Congressionally established timeline for changes to Section 232 – when he doubled Turkey’s Section 232 tariff from 25% to 50% via tweet in August 2018. The Federal Circuit in a 2-1 decision overruled the lower court, allowing the 50% tariff on Turkish steel to stand.

CIT cases are usually decided by a single judge. A three-judge panel is reserved only for cases of “high significance.” And it’s unusual for two judges on the Federal Circuit to reverse a unanimous decision from the CIT, Chriss said.

“This is an astonishing and dangerous development,” he said. “This case will likely come back to haunt us in ways that we cannot presently imagine.”

Federal Circuit Judge Jimmie Reyna issued a blistering dissent from his colleagues – circuit judges Raymond Chen and Richard Taranto – who upheld Trump’s action.

The Constitution grants Congress sole power over tariffs. Section 232 gives the president only limited authority to act in the event of a sudden increase in imports, Reyna wrote in his dissent.

The Federal Circuit’s 2-1 decision obliterates that balance of power. “I fear that the majority effectively accomplishes what not even Congress can legitimately do, reassign to the president its constitutionally vested power over the tariff,” he wrote.

And the problems with Section 232 extend far beyond the specific issue of whether the doubling of Turkey’s tariff was legal. The process of seeking exclusions from the national security tariffs in general remains cumbersome and “an opaque black box,” Chriss said.

Even the reason for applying the tariffs – imports pose a threat to national security – is “baseless” given that the Department of Defense (DoD) did not enitrely support their use and given that the measures were applied equally to U.S. adversaries and allies, he said.

“DoD continues to be concerned about the negative impact on our key allies. … It is critical that we reinforce to our key allies that these actions are focused on correcting Chinese overproduction and countering their attempts to circumvent existing antidumping tariffs,” former Defense Secretary James Mattis wrote in a letter to the White House and top cabinet officials ahead of the imposition of Section 232.

Trump nonetheless applied the tariffs equally to traditional U.S. allies such as Canada, Mexico and the European Union.

“Tariffs have proven over and over again to benefit the few at the expense of the many. They have put the real burden directly on the backs of our country’s manufacturers and supply chain sectors,” Chriss said.

The Coalition of American Metal Manufacturers and Users (CAMMU), another trade group representing steel buyers, agreed.

“The numerous lawsuits resulting from the previous administration’s imposition of Section 232 steel tariffs is yet more evidence that it is time for the Biden administration to end them,” CAMMU Executive Director Paul Nathanson said.

Any benefits Section 232 granted to domestic steel mills were outweighed long ago by the harm caused to their manufacturing customers. “These problems will only be exacerbated if Congress passes a massive infrastructure package that will create even more demand for steel,” Nathanson said.

By Michael Cowden, Michael@SteelMarketUpdate.com