November 6, 2023

Supreme Court Declines To Hear Steel Derivative Tariff Case

As Reuters reported last week, the United States Supreme Court has declined to hear a challenge to the U.S. government’s Section 232 tariffs on steel derivatives. The Biden administration had urged the Supreme Court not to take up the case.

The case began after two companies alleged the penalties are unconstitutional because the U.S. Congress never granted the president broad power over foreign trade to impose them. In 2021, the U.S. Court of International Trade agreed, striking down the steel derivatives tariffs by alleging the Trump administration had missed statutory deadlines to impose them.

As Reuters noted, this past February, however, the U.S. Court of Appeals for the Federal Circuit reversed the U.S. Court of International Trade’s decision, citing a ruling it had made in 2022 that found U.S. presidents are authorized to impose “contingency-dependent” tariff increases in order to fulfill their original national security objectives, if those objectives remain valid. One of the two companies appealed that appeals court ruling to the Supreme Court this past July.

The Supreme Court’s decision not to hear that challenge ends that case, but the second company also has made a plea to the Supreme Court which has not yet been decided. Last week’s decision is not the first time the nation’s highest court has declined to hear challenges to the Section 232 metals tariffs. This past March, the Supreme Court turned away a challenge by a group of U.S.-based steel importers, and, in 2022, the justices refused to hear a challenge by steel companies to former President Donald Trump’s 2018 decision to double tariffs on steel imports from Turkey.

As a reminder, when it comes to Section 232 tariffs, Connecting the Dots reports developments for members’ information only.

MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, MSCI has advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.

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