A Challenge To Unconstitutional Tariffs
“National Security” has become an ambiguous term in politics, as it has over time become a call for unlimited presidential powers. The party that holds the reigns will see it as the necessary security to maintain a free state, while the opposition hears a proxy term for “I want to expand government without consent from Congress.” Section 232 of the 1962 Trade Expansion Act is one of those outgrowths of executive power, allowing the president to implement tariffs to curb supposed threats to national security. With the expansion of tariffs under the Trump Administration, a controversial debate has been sparked, not only on the economic impact of trade restrictions but of the constitutionality of tariffs without legislation from Congress. Nearly the entire trade agenda of President Trump has been implemented by the supreme authority of the executive branch, leaving the American Institute for International Steel (AIIS) a path to show a clear lack of separation of powers.
The AIIS, an association of steel importers that are directly harmed by Trump’s 25% steel tariffs, filed a lawsuit in June of 2018 which argues that Section 232 used to justify the legality of this tariff is unconstitutional on the grounds that it is “an improper delegation of legislative authority and violates the principles of separation of powers and checks and balances established by the Constitution.” The case was filed suit in the Court of International Trade, a federal court established under Article III that has a track record of siding with the federal government. This court struck down the lawsuit in March, however, the AIIS then petitioned their case to the Supreme Court. The case has gained attention from groups in opposition to President Trump’s tariff agenda, including the free-market advocating Cato Institute that filed a brief in support of the challengers.
The plaintiffs allege that Section 232 of the Trade Expansion Act is unconstitutional on the grounds that it constitutes an improper delegation of legislative authority in violation of Article I, Section I of the Constitution and the separation of powers doctrine. Article I, Section I states that “all legislative powers herein granted shall be vested in a Congress of the United States.” The plaintiffs further emphasize that Article I, Section VIII provides that only Congress shall have the power to lay and collect taxes, as well as “Duties, Imposts, and Excises…[and] to regulate Commerce with Foreign Nations.” Section 232 of the 1962 legislation reverses the separation of powers enshrined in the Constitution and is clearly not limited to specific threats to national security, given that the term is subjective.
The plaintiffs briefly explain the legal procedure for the Secretary of Commerce and the president to determine whether or not foreign trade threatens national security, 232(d), and how it includes an unlimited definition, obviously departing from the common notion relating to foreign invasion. If actual national security is up for debate, Secretary of Defense Jim Mattis actually advised that military requirements steel represent only 3% of US production. While the plaintiffs clearly show how the law allows for unlimited tariffs by Presidential decree, the case of the current steel tariffs is the perfect example, where apparently the President badly wanting the tariffs for protection of domestic producers and negotiating leverage with foreign nations is a threat to “national security.” It is probably not a stretch for the AIIS to allege that this was not Constitutional intent.
When the Court of International Trade struck down the lawsuit from AIIS, they used various case-law to show the legitimacy of congressional delegations of power to the executive branch. J.W. Hampton Jr. & Co. v. United States (1928) explains that Congress, through the legislative process, can delegate powers to another body provided it leaves a clear process to exercise these powers. In this case, its delegates Article I, Section I powers regarding international trade to the Secretary of Commerce and the president under clear rules and procedures established under Section 232 of the Trade Expansion Act that leave an actual process to define national security. The court opinion then cites a multitude of past opinions where the Supreme Court upheld delegations of power to the executive branch in areas of various regulations of the economy in the public interest. These include occupational licensing, air-quality standards, and voting power among security holders, assuming that the same applies to tariffs under the 1962 law. The plaintiffs cite the Constitution’s separation of powers, ignoring the possibility of a legal delegation of these powers.
The opinion of the defendant Court of International Trade shows the overwhelming use of case-law as opposed to the rule of law in modern day arbitrations. Many government actions, like this one, may be objectively unconstitutional by the context of the founding document but then ruled unconstitutional by a Supreme Court opinion of the past. It gives off the court narrative that “unconstitutional government action has existed for over one hundred years, so we don’t care anymore.” While the concept of Congressional delegation of power to the executive branch, creating a massive imbalance of power to create what some call the “Fourth Branch of Government”, is still completely up for debate, the Court can easily write it off with J.W. Hampton Jr. & Co. v. United States.
There is also the fact that AIIS only filed this lawsuit as an interest group, using the constitution as justification to undermine national security and end the tariffs. On the contrary, the plaintiffs and groups like the Cato Institute will say that the president is using a phony “national security” cry as an excuse for increased power and protectionism. As a whole, invoking Section 232 does not relieve the political implication tariffs. Unless all the domestic steel producers that benefit from tariffs at everyone else’s expense just happen to love “national security” while the steel importers hate it.
After the Court of International Trade rejected the plaintiffs’ case, they petitioned to the Supreme Court. On Monday, June 24, the Supreme Court denied the case, leaving in place the 25% steel tariffs for now. At this point, it is likely that the case will end up at the Supreme Court at some point. The only other option would be a rollback of executive power from Congress, forcing a vote to arbitrarily decide what constitutes “national security.” However, this is unlikely, as the federal government has never made a trend of decreasing executive power.