Supreme Court Will Not Hear Case on Constitutionality of Metal Tariffs

The U.S. Supreme Court will not hear the American Institute for International Steel’s (AIIS) case on the steel tariffs implemented by the Trump Administration early last year. The AIIS argued that the Administration’s use of Section 232 of the Trade Expansion Act of 1962 to justify the implementation of tariffs on both steel and aluminum is unconstitutional because it delegates legislative power to the president. Section 232 allows tariffs to be imposed by the president when imports are deemed to be damaging to U.S. national security.

According to the petition, as of March 28, 2019, “the [25%] steel tariffs collected have exceeded $4.5 billion, plus another $1.5 billion for aluminum on which there is a 10% tariff.”

“However, the $4.5 billion figure significantly understates the irreparable and ongoing harm to petitioner AIIS’s members and to countless other companies and individuals who have sustained losses from the reduction in imports of steel products and domestic price increases resulting from the order,” reads the petition.

The petition was denied without comment by the Supreme Court on June 24, 2019. This decision leaves in place the U.S. Court of International Trade’s March decision allowing the tariffs to continue. However, the Supreme Court could hear the case in the future after further review is given by the lower courts.

Background

A 25% tariff on steel imports and a 10% tariff on aluminum imports was implemented by the Administration in March 2018 to “build the steel and aluminum industries back.” These tariffs were recently lifted on Canada and Mexico as the countries continue to negotiate a trade deal to replace the North American Free Trade Agreement.

Canada is the No. 1 supplier of both metals to the U.S. The country represented about 41% of aluminum imports and 16% of steel imports when the tariffs were introduced initially. Mexico represented about 9% of the U.S. import market for steel and about 4% of the market for aluminum.

The aluminum tariffs currently apply to all countries of origin except Argentina, Australia, Canada and Mexico, while the steel tariffs apply to all except Argentina, Australia, Brazil, Canada, Mexico and South Korea.

Steel entry doors represent the largest share of both commercial and residential applications, according to the American Architectural Manufacturers Association, followed by aluminum for nonresidential and fiberglass for residential. Metal windows — mostly aluminum — make up roughly 10% of the residential market, but they’re the bulk of commercial fenestration products in the U.S.

Paul Becks, executive vice president with contract glazing firm National Enclosure Co., told USGNN™ that after the initial adjustment to raw material values (and budgets), they have seen little pricing pressure.

“Sometimes you need to have a little pain for long term gain,” he says.