Economy - Politics

Steel Industry Sues Trump Administration To Block Tariffs, Alleges Trump Has Overstepped His Authority

Published on June 27, 2018 by Athena Pallas

The steel industry trade group, American Institute for International Steel (AIIS), is suing the Trump administration to block the enforcement of Trump’s steel and aluminum tariffs, contending that Trump has overstepped his authority, assuming powers only Congress has. Indeed they are correct to point out that issue. Presidents only have the power to impose tariffs on the basis of national security, which is why Trump is claiming that is the reason he has imposed steel and aluminum tariffs on E.U., Canada, and Mexico. However, saying that these close allies are a national security risk is completely baseless, and Trump’s real reasons for imposing them have to do with his protectionist leanings on trade.

Only Congress has the power to impose tariffs for reasons other than national security. So Trump is overstepping his authority and AIIS is calling him out on it in their suit and asking the court to stop Trump from enforcing the tariffs. Trump’s protectionist policies, in his mind, are meant to preserve American industry and manufacturing, but as is clear from this lawsuit, American industry and manufacturing see it as harming them, not helping them. Many American manufacturers rely on foreign steel and aluminum, partly because U.S. supply of certain types of these metals can often be insufficient. Now that foreign made steel will have a 25% import tariff and aluminum a 10% import tariff, costs for U.S. manufacturers will increase, causing prices of their products to go up for consumers and potentially causing loss of customers and resultant job losses as well. According to The Hill:

The American Institute for International Steel (AIIS) on Wednesday filed a lawsuit challenging President Trump’s tariffs on imported steel and aluminum. Joined by two member companies in the lawsuit, the trade association asks a court to declare that Trump’s 25 percent tariffs on steel are unconstitutional because, it charges, they represent an improper “delegation of legislative power to the president,” and violate the doctrine of separation of powers and the system of checks and balances. The lawsuit, filed in the U.S. Court of International Trade, asks the court to block the Trump administration from enforcing the tariffs.

President Trump somehow imagined that he could impose these steel and aluminum tariffs and the effected countries would just accept it without retaliating. He was wrong, of course, as all the effected countries have announced retaliatory tariffs, targeting in particular products made in states with prominent Republican Congresspeople, like the E.U.’s tariffs on bourbon (Kentucky – Senate Majority Leader Mitch McConnell) and Harley-Davidson motorcycles (Wisconsin – Speaker of the House Paul Ryan). Harley-Davidson, facing unsustainable $100 million a year losses thanks to the tariffs, has decided to move more of their production out of the U.S. in order to be able to sell in the E.U. without the tariffs. President Trump has decided that is a good idea to attack Harley-Davidson for announcing that plan, expecting them to be patient for some eventual, vague, relief from those tariffs, but the economic reality is that Harley-Davidson is doing what it has to in order to survive.

Trump has further threatened countries imposing retaliatory tariffs that he will retaliate for their retaliation. Of course that is the very definition of a trade war, one that harms both sides, one that increases prices for consumers, raises costs for manufacturers and farmers, and likely leads to job losses and economic downturns. The fault for all of this lies squarely with President Trump. This lawsuit by the AIIS seeks to stop Trump in his tracks – it remains to be seen how successful it will be in doing so.

Featured image via Wikimedia Commons.