Lawmakers Opposed to Trump's Tariffs Look to Courts to Step In

(Bloomberg) -- Republican lawmakers opposing President Donald Trump’s imposition of steel and aluminum tariffs said the White House may face lawsuits to block the duties, even as legal experts cast doubt that the cases would succeed.

There will almost certainly be broad legal challenges of the Trump administration claim that protecting U.S. steel and aluminum producers is necessary for national security, John Cornyn of Texas, the second-ranking Republican senator, said Friday.

“Of course this will have to go through the usual litigation process, either the WTO or the courts to see how this works,” Cornyn said at an energy conference in Houston.

Cornyn is among the Republicans who’ve bucked the president on the tariffs, warning that they risk undermining strong U.S. economic growth and undercutting the benefits of the Republican tax cut legislation passed last year. At least two Senate committees are planning hearings on Trump’s action, and Republican Senator Jeff Flake of Arizona said he’s planning legislation that would nullify the tariffs.

But Republicans also are looking to possible lawsuits by companies hurt by the tariffs as a way to roll them back.

Exemptions

The administration is still working out exemptions from the tariffs of 25 percent on steel imports and 10 percent on aluminum before they take effect in two weeks. If U.S. importers and industrial users decide to challenge the tariffs in court, they may try a tactic that stymied Trump’s original ban on letting visitors from certain countries enter the U.S. and his executive actions on immigration: using his own words against him.

Trump set the tariffs based on a Commerce Department investigation that found imports of the metals pose a risk to national security. The probe was authorized under the seldom-used Section 232 of the 1962 Trade Expansion Act, which gives the president broad powers to impose restrictions on domestic security grounds.

Trump’s Words

But in numerous public statements, Trump has cited U.S. jobs and unfair trade when talking about the tariffs.

“Our factories were left to rot, and to rust all over the place. Thriving communities turned into ghost towns,” Trump said in front of a group of workers before signing the tariff proclamations. “You guys know that, right? Not any longer. The workers who poured their souls into building this great nation were betrayed, but that betrayal is now over.”

Companies may claim that Trump’s use of the national security rationale is inconsistent with his protectionist public statements, and therefore is an illegitimate use of Section 232, said Raj Bhala, a specialist in international trade law at Kansas University School of Law.

They also could challenge the law itself, claiming Congress delegated to the president too much of its Constitutional authority to regulate foreign trade when it passed Section 232, Bhala said, or try to identify defects in the process that Trump and his Commerce Department used in bringing the tariffs forward.

To block the tariffs, even temporarily, opponents would have to convince a judge that they’re likely to win and that they’d suffer irreparable harm if the tariffs go into effect.

Tough Challenge

Several lawyers were skeptical that a court would block the president. On Monday, the U.S. Court of International Trade, which hears cases involving trade and customs law, dismissed a challenge by a group of Canadian solar panel manufacturers that sought to block a 30 percent Trump tariff on imported solar cells.

Even if there is an initial victory from a friendly court to stay Trump’s tariffs, a case would face difficult appeals, according to Mark Warner, a Toronto-based trade lawyer with MAAW Law who practices in the U.S. and Canada.

“The traditional American court jurisprudence is that you’ve got to give deference to an American president’s interpretation of national security,” Warner said.

WTO Complaints

Countries could challenge Trump’s action in the World Trade Organization, putting this international forum in the uncomfortable position of determining what is in the “essential security interests” of the U.S., in accordance with an existing agreement on tariffs and trade. A WTO decision wouldn’t halt U.S. tariffs, but rather authorize retaliation from trading partners.

In Congress, some Republicans are trying to claw back authority to implement or at least review tariffs. But it may be difficult to get a veto-proof majority with some Democrats supporting Trump’s action.

Senator Mike Lee, a Republican from Utah, is proposing legislation that would generally require future tariffs to get congressional approval. Flake of Arizona said he wants quick action on his proposal “before this exercise in protectionism inflicts any more damage on the economy.”

“Trade wars are not won, they are only lost,” Flake said in a statement shortly after the president signed the tariff proclamations. “Congress cannot be complicit as the administration courts economic disaster.”

Both Senate Finance Committee Chairman Orrin Hatch of Utah and Senate Homeland Security and Governmental Affairs Committee Chairman Ron Johnson of Wisconsin are planning hearings in coming weeks about the decision. Both said they are continuing to lobby the president to change course.

In a Friday letter to Commerce Secretary Wilbur Ross, Johnson outlined concerns about the impact on his home state. Johnson demanded a host of data from the administration pertaining to its process of deciding to impose the tariffs. That includes information on domestic and foreign production of both metals that would justify the “national security” needs cited by Trump.

“The tariffs on steel and aluminum risk undermining these positive economic developments by increasing input costs to American manufacturing and steel-dependent industries employing more than 17 million workers,” he said.

Despite widespread condemnation from House Republicans, none have introduced measures to counter Trump’s action. House Speaker Paul Ryan of Wisconsin said he disagrees with the tariffs and will “continue to urge the administration to narrow this policy.” A statement from Ways and Means chairman Kevin Brady applauded Trump for exempting Canada and Mexico, but reminds him that Congress “has constitutional authority over trade with foreign nations,” even if that authority was previously ceded to the president.

--With assistance from Tina Davis and Josh Wingrove

To contact the reporters on this story: Anna Edgerton in Washington at aedgerton@bloomberg.net, Bob Van Voris in federal court in Manhattan at rvanvoris@bloomberg.net, Laura Litvan in Washington at llitvan@bloomberg.net.

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Justin Blum

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