Dive Brief:
- The U.S. Supreme Court refused to hear a case brought by representatives from the steel industry on Monday, which sought to challenge President Trump's tariffs on global steel imports as unconstitutional. The petitioners have the option to bring their case before a lower court.
- The American Institute for International Steel, Sim-Tex (a Texas-based oil and gas pipe wholesaler) and Kurt Orban Partners (a California-based steel-trading company) brought up the case, asserting the president has too broad of an authority under Section 232 of the Trade Expansion Act of 1962 to impose tariffs, particularly the 25% tariff on steel imports from all countries except for Argentina, Australia, Brazil, Canada, Mexico and South Korea.
- "It's an extraordinarily broad grant of authority, and the president's actions under the statute have imposed billions of dollars worth of losses on the American economy as a whole," Tim Meyer, a law professor at Vanderbilt University and counsel for the petitioners in this case, told Supply Chain Dive. "Some of that falls on people like my clients the American Institute for International Steel and its members, many of whom import steel so they're actually paying the tariff but there's a huge number of industries ... and business in the supply chains that use steel ... that are affected."
Dive Insight:
Meyer said the rising economic toll of the tariffs is heavily impacting not only the steel industry itself but other major organizations that rely on steel imports. In the petition, Meyer and his fellow counselors said the tariffs are already causing price increases and port slowdowns and increasing the likelihood of layoffs in associated industries like longshoring and auto manufacturing.
"What we decided to do was to attack the statute on constitutional grounds ... control over tariffs and control over the power to regulate foreign commerce is given by the constitution to the Congress [under the non-delegation rule]," Meyer said.
Members of Congress on both sides of the aisle have taken issue with the administration's use of Section 232 powers, as well. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, plans to introduce a bill after the August recess that would allow Congress to weigh in on any tariff actions and "any restrictions imposed by the president would be limited to a defined period of time unless extended by an Act of Congress," according to a press release from Sen. Grassley's office.
In addition, Trump has frequently considered levying additional tariffs on auto imports and parts over the past year, under his Section 232 powers, which has added another layer of urgency to the petitioners' suit.
While the executive and legislative branches are active on the tariff front, the judicial branch appears to take a passive approach with the Supreme Court's refusal to hear the petition. The method the petition was presented, however, was unusual. Meyer said they petitioned the Supreme Court to allow the plaintiffs to present their case without having to go through an appeals process in a lower court.
"It is rare for the Supreme Court to agree to hear a case before a ruling by the Court of Appeals, and our appeal will now heard by the U.S. Court of Appeals for Federal Circuit," Alan Morrison, the counsel of record for the case, told Supply Chain Dive in an email. "We continue to believe that we have a strong legal case that Section 232 is unconstitutional."
Morisson continued to say if they win their case there in the fall, it is likely the federal government would ultimately challenge it in the Supreme Court in the future.
