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US court defends Trump's 2019 raise on Turkey steel tariffs

Posted on 14 July 2021

The US Court of Appeals for the Federal Circuit ruled July 13 that former President Donald Trump had the authority to double a tariff on Turkish steel imports from 25% to 50% under Section 232, thereby reversing a 2019 US Court of International Trade decision that placed limits on such actions.

The court said Trump acted within the president's authoritative parameters by adhering to national security provisions set forth by Section 232 and did not need to initiate a new investigative probe to justify the tariff raise on Turkey.

"The president did not depart from the [US Commerce Department] secretary's finding of a national-security threat; indeed, the president specifically adhered to the secretary's underlying finding of the target capacity-utilization level that was the rationale for the predicate threat finding," the court said in its filing.

"Moreover, the president made the determination that further import restrictions were needed to achieve that level in a short period after the secretary's finding and after the initial presidential action, and that initial presidential action (in March 2018) itself announced a continuing course of action that could include adjustments as time passed."

The court said its decision exclusively applies to Trump's action against Turkey, which is among the major exporters of steel to the US.

"We do not address other circumstances that would present other issues about presidential authority to adjust initially taken actions without securing a new report with a new threat finding from the secretary."

Trump initiated a 25% steel tariff and 10% aluminum tariff on metal imports from most countries under Section 232 in March 2018. The tariff was imposed following Commerce's investigation which found that surging steel and aluminum imports posed a national security threat.

The steel tariff was increased to 50% on only Turkish imports from August 2018 to May 2019.

Serving as the plaintiffs, US-based steel importer Transpacific Steel and a group of Turkish steel producers challenged Trump's action in the CIT in January 2019 and received a favorable ruling.

 

Overturn of CIT ruling

 

The appellate court specifically challenged two arguments from the CIT's ruling of unlawful conduct concerning the timing of Trump's actions and his targeting of only one country.

In the CIT case, the plaintiff group alleged that the tariff hike was wrongfully implemented outside of a 90-day time period from Commerce's initial national security investigation, a provision referenced in Section 232, and violated Transpacific's equal protection guarantee of the Fifth Amendment to the Constitution by singling out steel imports from Turkey.

"The authority of the president includes authority to adopt and carry out a plan of action that allows adjustments of specific measures, including by increasing import restrictions, in carrying out the plan over time," the appellate court said in its 2-1 decision overturning the CIT's ruling, referencing the time period concern.

The court also dismissed the CIT's opinion that the president violated equal protection rights.

"The most demanding standard that could apply here is the undemanding rational-basis standard," it said. "The president's decision to take one of a number of possible steps to achieve the goal of increasing utilization of domestic steel plants' capacity to try to improve their sustainability for national security reasons meets that standard."

In a dissenting opinion, Judge Jimmie Reyna said he affirmed the CIT's decision, adding that "discretionary authority Congress granted the president under Section 232 is temporally limited and that the president in this has case exceeded that authority."

Source : Platts