Trade

Trump Loses Legal Authority For Car Tariffs

JM Ashby
Written by JM Ashby

The question of whether or not Trump will impose tariffs on foreign cars and car parts may be answered as a federal court has ruled that he can't, at least not for the same reason the Commerce Department gave him permission to.

The Department of Commerce launched a Section 232 investigation earlier this year and "found" that imports of foreign cars and car parts are a threat to national security, giving the White House up to six months to act on the department's findings.

But Trump didn't act. Trump didn't impose tariffs nor did he take action to formally delay a decision and that means the window of opportunity has closed.

A company that was subjected to Trump's tariffs on foreign steel imported from Turkey challenged Trump's decision to increase those tariffs in federal court and the company won. The court ruled that Trump can't unilaterally impose or increase tariffs after the window of time has closed.

In a decision published on Monday, the Court of International Trade ruled that Trump ran out of time on a Section 232 investigation of steel imports, when he tried to double the tariffs on Turkish steel to 50% in August 2018. [...]

The New York-based federal court, which handles appeals of U.S. duty determinations, ruled in Transpacific Steel LLC’s favor and said Trump’s “expansive view” of his Section 232 powers was “mistaken” and is confined.

“Although the statute grants the President great discretion in deciding what action to take, it cabins the President’s power both substantively, by requiring the action to eliminate threats to national security caused by imports, and procedurally, by setting the time in which to act,” wrote judges Claire Kelly and Jane Restani in the decision dated Nov. 15.

Devin Sikes, a trade lawyer with Akin Gump in Washington, wrote in a note to clients that the case lays the groundwork for future challenges to Section 232 cases.

Based on this ruling, I'd say companies should line up to challenge Trump's tariffs on virtually everything including imports from China. Trump first imposed tariffs on Chinese goods in the summer of 2018 because they're supposedly a threat to national security and he has used that authority to impose new tariffs and increase existing tariffs multiple times in the last year.

Exports who spoke to Reuters say Trump may be able to cite other statutes that would allow him to impose tariffs on foreign cars and parts, among other things, but trade laws governing threats to "national security" clearly have limits on them.

Of course, the limits aren't strict enough, if you ask me; the Trump regime says imports are a threat to national security, but we've never seen the supposed threat explicitly spelled out. The Commerce Department says foreign imports weaken domestic industries, which is debatable, but it's quite a stretch to say that harms our national security in any case.

I suppose you could say weakening American automakers would be a threat to national security in the case of a major war, but Trump was only considering imposing tariffs on European, Japanese, and South Korean cars; cars made by our closest allies in the world. None of this ever made sense.

Given that there's less than a year remaining between today and the 2020 election, we may have seen the very last of Trump's "national security" tariffs.

  • waspuppet

    Sounds like a win-win for Trump: He got to scream about imposing tariffs, but he doesn’t have to live with the disastrous effects of having actually imposed them. And his poo-flinging minions will never know. Or try to find out.

    Anytime Trump can accomplish something without actually doing anything, that’s his ideal outcome.

  • muselet

    Good news, even though the decision was based solely on technical grounds.

    It’s long past time for Congress to amend the Trade Expansion Act of 1962, particularly Section 232. The potential for mischief is simply too high, even if the president isn’t a chowderheaded bully.

    –alopecia