Steel Importer's Court Complaint Says Section 232 Tariffs Unconstitutional, Requests Temporary Hold
The Court of International Trade will hear arguments March 29 on whether it should issue a temporary block of recently imposed Section 232 steel tariffs as they apply to a Miami-based importer. Severstal Export Miami, a subsidiary of the Russian steel manufacturer PAO Severstal, argues that the tariffs are unconstitutional because they weren’t actually meant to address national security -- a fact purportedly belied by President Donald Trump’s own tweets -- and unenforceable for failure to provide fair notice to companies with shipments already on the water.
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Severstal Miami filed the lawsuit at CIT on March 23, joined by Severstal Export, a Swiss subsidiary of PAO Severstal that handles the Russian manufacturer’s overseas sales. They seek a temporary restraining order and a preliminary injunction preventing enforcement of the tariffs on Severstal Miami and Severstal Export while CIT considers the constitutionality of the Section 232 tariffs. Two U.S. steel manufacturers, Nucor and Steel Dynamics Inc. (SDI), have filed motions to join the case on behalf of the government.
According to a legal brief accompanying the Severstal request, the importer will suffer irreparable harm if the tariffs take effect, partly because Severstal Miami is contractually obligated to pay the tariffs and can’t return the generally custom-made steel it imports on behalf of clients. The tariffs will also likely cause Severstal Miami to be priced out of the U.S. market, close its doors, and lay off its employees, the brief said.
The steel importers compared the steel tariffs to the January 2017 ban on foreign nationals entering from several Muslim-majority countries, which was put on hold by courts skeptical of the Trump administration’s national security rationale. “Like the evidence concerning the Travel Ban, the evidence relating to the Steel Proclamation demonstrates that President Trump is once again citing national security concerns as justification for an unconstitutional exercise of executive power,” Severstal said.
Though the Constitution generally gives Congress the power to raise tariffs, Congress delegated to the president in Section 232 of the Trade Act of 1962 the ability to enact tariffs if imports imperil national security. But a White House press release touting the tariffs’ role in keeping Trump’s campaign promise to resurrect the U.S. steel industry, as well as President Donald Trump’s tweets after imposition of the tariffs promising to drop the tariffs for countries that give the U.S. economic concessions, show that the tariffs were actually imposed for political and economic reasons, the brief said.
The national security basis for the tariffs is also contradicted by a Defense Department report issued in connection with the investigation that highlighted national security concerns related to imposing the tariffs on allies (see 1802230018). Additionally, initially exempt countries make up about 60 percent of U.S. steel imports, the brief said. The Justice Department did not immediately comment.
Legal briefs in the case on whether CIT should issue the temporary holds are due April 10. The court recently denied Nucor’s request to participate in this first part of the case. In addition to the U.S., CBP and its Commissioner Kevin McAleenan, the Commerce Department and Commerce Secretary Wilbur Ross, as well as Trump are named as defendants. The government’s formal answer to Severstal’s complaint is due at the end of May. The 25 percent steel tariffs took effect March 23, though several companies received temporary exemptions (see 1803220050).
Email ITTNews@warren-news.com for a copy of documents related to this case.