Steel cheers US court ruling on Section 232
Steelmakers in the United States applauded a ruling by the US Court of Appeals for the Federal Circuit that confirmed the US President can boost Section 232 tariffs long after they were first implemented.
In the two-to-one decision on Tuesday July 13, the three-judge panel overturned a US Court of International Trade (CIT) ruling that put a time limit on presidential tariff authority under Section 232.
The panel said that President Donald Trump was acting legally when he doubled a tariff on Turkish steel several months after the imposition of tariffs on steel and aluminium imports on national security grounds in March 2018.
Both the American Iron and Steel Institute and Steel Manufacturers Association praised the decision for allowing presidential flexibility in applying the tariffs that they see bolstering the US steel industry against unfair competition
“This is good news from [the] steel industry’s perspective... This is consistent with a lot of case law, in that presidents have a lot of leeway when it comes to national security. People can disagree with the policy, but the law is clear and allows for the adjustment of tariffs,” AISI president and chief executive officer Kevin Dempsey told Fastmarkets.
“SMA is pleased with [Tuesday’s] US Court of Appeals for the Federal Circuit decision,” SMA president Philip K Bell told Fastmarkets. “By reversing the ruling of the US Court of International Trade that the provisions of Section 232 of the Trade Expansion Act of 1962 were violated by increasing tariffs on steel imports from Turkey, the court reaffirms that the [Section] 232 statute gives the President authority to act to alleviate threats to national security stemming from imports.”
Transpacific LLC and several other Turkish steel importers claimed that the doubling of tariffs on Turkish steel was illegal when they filed suit in January 2019. The CIT panel agreed with plaintiffs and said that the President had failed to comply with deadlines that were added to Section 232.
“While this determination is limited to the facts and circumstances surrounding additional duties imposed on imports of Turkish steel, it shows that the [Section] 232 tariffs remain an important part of the toolkit that is necessary to fight unfair trade,” Bell said.
While President Joe Biden has reversed many Trump-era policies, he hasn’t announced any plans to end or weaken Section 232 tariffs and quotas. Biden has signaled that he will continue prioritizing US industry, including via the signing of an executive order strengthening “Buy America” laws during his first week in office. Commerce Secretary Gina Raimondo described Section 232 as “effective” on March 4.
“The Biden administration supports the view of the Trump administration, that it is important to have a healthy steel industry in the US,” Dempsey said. “The Biden administration won’t undermine the progress that [Section] 232 has enabled, such as the $16 billion in investment in the industry.”
The Biden administration will need the flexibility to make changes to Section 232 while it works to resolve a dispute over the tariffs with the European Union by the end of 2021, he said.
“This is a global program with flexibility to make country-by-country changes as [Biden] sees fit,” Dempsey said. “This will be especially important as he negotiates with the EU.”
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $89.94 per hundredweight ($1,798.80 per short ton) on July 13, down by 0.41% from $90.31 per cwt a day earlier. The index reached $90.58 per cwt on July 7, the highest since Fastmarkets started assessing the market in 1960.