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Trump Administration Continues Push to Reshape American Trade Relations by Imposing Tariffs on Steel and Aluminum Imports

Extract

On March 8, 2018, President Trump signed Proclamation 9704 and Proclamation 9705 imposing tariffs on imported aluminum and steel articles, respectively. According to Trump, the tariffs are “necessary and appropriate to address the threat that imports” of steel and aluminum articles “pose to the national security.” The imposition of tariffs in the name of national defense is the latest and most high-profile move by the Trump administration to orient the United States toward an “America First” trade policy.

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1 Proclamation No. 9704, 83 Fed. Reg. 11,619 (Mar. 8, 2018) [hereinafter Aluminum Tariff].

2 Proclamation No. 9705, 83 Fed. Reg. 11,625 (Mar. 8, 2018) [hereinafter Steel Tariff].

3 Id. at 11,626; Aluminum Tariff, supra note 1, at 11,620.

4 19 U.S.C. § 1862.

5 Id. at § 1862(c)(1)(A).

6 Id. at § 1862(d).

7 Id.

8 Id.

9 Dep't of Commerce, Section 232 Investigations: The Effect of Imports on the National Security, at https://www.bis.doc.gov/232 [https://perma.cc/F796-FFHA].

10 Dep't of Commerce, Section 232 Investigations Program Guide: The Effects of Imports on the National Security 16 (2007), available at https://www.bis.doc.gov/index.php/forms-documents/section-232-investigations/86-section-232-booklet/file [https://perma.cc/FE38-E7T4].

11 Id.

12 Donald J. Trump, Memorandum on Steel Imports and Threats to National Security, 2017 Daily Comp. Pres. Doc. (Apr. 20, 2017); Donald J. Trump, Memorandum on Aluminum Imports and Threats to National Security, 2017 Daily Comp. Pres. Doc. (Apr. 27, 2017).

13 U.S. Dep't of Commerce Press Release, Secretary Ross Releases Steel and Aluminum 232 Reports in Coordination with White House (Feb. 16, 2018), at https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination [https://perma.cc/S8M6-BHCG] (internal quotations omitted) [hereinafter Feb. 16 Dep't of Commerce Press Release].

14 Dep't of Commerce, The Effects of Imports of Steel on the National Security 1 (2018), available at: https://www.commerce.gov/sites/commerce.gov/files/the_effect_of_imports_of_steel_on_the_national_security_-_with_redactions_-_20180111.pdf [https://perma.cc/CMH9-9R5Y] (quoting Dep't of Commerce, The Effects of Imports of Iron Ore and Semi-Finished Steel on the National Security 5 (2001) and thereby adopting an understanding of “national security” similar to the one used in past Section 232 investigations).

15 Id. at 5. See also Dep't of Commerce, The Effects of Imports of Aluminum on the National Security 5 (Jan. 17, 2018), available at https://www.commerce.gov/sites/commerce.gov/files/the_effect_of_imports_of_aluminum_on_the_national_security_-_with_redactions_-_20180117.pdf [https://perma.cc/4Y26-C8CP].

16 Feb. 16 Dep't of Commerce Press Release, supra note 13.

17 Memorandum from Jim Mattis, Secretary of Defense, U.S. Dep't of Defense, to Wilbur Ross, Secretary of Commerce, available at https://www.commerce.gov/sites/commerce.gov/files/department_of_defense_memo_response_to_steel_and_aluminum_policy_recommendations.pdf [https://perma.cc/PEJ3-DTH6].

18 Id. (also noting that, of the three proposed recommendations made by Commerce, the Department of Defense preferred targeted tariffs to the two other options).

19 Donald J. Trump, Remarks at a Listening Session with Steel and Aluminum Industry Leaders and an Exchange with Reporters, 2018 Daily Comp. Pres. Doc. 3 (Mar. 1, 2018).

20 Aluminum Tariff, supra note 1, at 11,619; Steel Tariff, supra note 2, at 11,626.

21 Steel Tariff, supra note 2, at 11,627.

22 Aluminum Tariff, supra note 1, at 11,621.

23 Id. at 11,620; Steel Tariff, supra note 2, at 11,626.

24 Aluminum Tariff, supra note 1, at 11,621; Steel Tariff, supra note 2, at 11,627.

25 Aluminum Tariff, supra note 1, at 11,620; Steel Tariff, supra note 2, at 11,626.

26 Michelle Fox, Commerce Secretary Ross: Tariffs Are ‘Motivation’ for Canada, Mexico to Make a ‘Fair’ NAFTA Deal, CNBC (Mar. 8, 2018), at https://www.cnbc.com/2018/03/08/commerce-secretary-ross-tariffs-are-motivation-for-canada-mexico-to-make-a-fair-nafta-deal.html.

27 Aluminum Tariff, supra note 1, at 11,620; Steel Tariff, supra note 2, at 11,626. The tariff scheme also leaves open the possibility of narrower relief for any steel or aluminum article that the Secretary of Commerce determines is not “produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality” or “based upon specific national security considerations.” Aluminum Tariff, supra note 1, at 11,621; Steel Tariff, supra note 2, at 11,627.

28 Aluminum Tariff, supra note 1, at 11,620; Steel Tariff, supra note 2, at 11,626.

29 Id.

30 Donald J. Trump (@realDonaldTrump), Twitter (Mar. 9, 2018, 6:48 PM), at https://twitter.com/realDonaldTrump/status/972242845636669440.

31 Ana Swanson & Kennth P. Vogel, Trump's Tariffs Set Off Storm of Lobbying, N.Y. Times (Mar. 16, 2018), at https://www.nytimes.com/2018/03/16/us/politics/trump-tariffs-lobbying.html?rref=collection%2Fsectioncollection%2Fworld.

32 Letter from Representative Kevin Brady, Chairman of House Committee on Way & Means, et. al. to President Donald Trump (Mar. 7, 2018), available at https://online.wsj.com/public/resources/documents/LettertoPotus-03-07-2018.pdf [https://perma.cc/YH7F-956M].

33 Jordain Carney, Flake to Introduce Bill to Nullify Trump's Tariffs, The Hill (Mar. 8, 2018), at http://thehill.com/homenews/senate/377477-flake-to-introduce-bill-to-nullify-trumps-tariffs.

34 A Storm of Reactions to Trump's Tariffs, N.Y. Times (Mar. 9, 2018), at https://www.nytimes.com/2018/03/08/business/economy/trump-tariff-reaction.html (collecting reactions).

35 Statements by Vice-President Katainen and Commissioner Malmström at the European Parliament Plenary Debate: US Decision to Impose Tariffs on Steel and Aluminium (Mar. 14, 2018), available at http://trade.ec.europa.eu/doclib/docs/2018/march/tradoc_156640.pdf [hereinafter Katainen & Malmström Statement].

36 Ana Swanson, Trump's Tariffs Prompt Global Threats of Retaliation, N.Y. Times (Mar. 2, 2018), at https://www.nytimes.com/2018/03/02/us/politics/trump-tariffs-steel-aluminum.html.

37 Katainen & Malmström Statement, supra note 35.

38 General Agreement on Tariffs and Trade, Art. XXI, Oct. 30, 1947, 55 UNTS 194.

39 Alford, Roger P., The Self-Judging WTO Security Exception, 2011 Utah L. Rev. 697, 699 (2011). The closest the WTO has come to issuing a determinative ruling was in 1996, when the European Community filed a request for WTO consultation over the U.S.’s Cuban Liberty and Democratic Solidarity Act of 1996, which imposed a secondary boycott on Cuba. Id. at 719. But after President Clinton waived the effective date of the boycott, the European Community requested the suspension of proceedings at the WTO and the issue was ultimately resolved through diplomatic channels. See id.

40 Compare, e.g., Bhala, Raj, National Security and International Trade Law: What the GATT Says, and What the United States Does, 19 U. Pa. J. Int'l Econ. L. 263, 268–69 (1998) (implying from the text of Article XXI(b) that a member state has “sole discretion to determine whether an action conforms to the requirements set forth in” it and “no WTO Member nor group of Members, and no WTO panel or other adjudicatory body, has any right to determine whether a measure taken by a sanctioning member satisfies the requirements”), with Schloemann, Hannes L. & Ohlhoff, Stefan, “Constitutionalization” and Dispute Settlement in the WTO: National Security as an Issue of Competence, 93 AJIL 424, 445 (1999) (observing that “there is no inherent reason why a panel should not review [a state's assertion of essential security interests], sorting out cases of clear unreasonableness, without otherwise interfering with the state's definitional prerogative”); Akande, Dapo & Williams, Sope, International Adjudication on National Security Issues: What Role for the WTO, 43 Va. J. Int'l L. 365, 381 (2003) (rejecting “an entirely self-judging” interpretation of Article XXI).

41 White House Press Release, President Donald J. Trump Is Promoting Free, Fair, and Reciprocal Trade (Jan. 30, 2018), at https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-promoting-free-fair-reciprocal-trade [https://perma.cc/ZT3H-7P47] [hereinafter Jan. 30 White House Press Release]. See also Daugirdas, Kristina & Mortenson, Julian Davis, Contemporary Practice of the United States, 111 AJIL 1045 (2017) (discussing trade-related policy made during Trump's first year in office); cf. Veroneau, John K. & Gibson, Catherine H., Presidential Tariff Authority, 111 AJIL 957 (2017) (evaluating the extent to which Section 338 of the Tariff Act of 1930 could be used by the Trump administration to promote its trade agenda).

42 Jan. 30 White House Press Release, supra note 41. See, e.g., Donald J. Trump, Remarks on Signing Proclamations on Imports of Large Residential Washers and Certain Photovoltaic Cells and an Exchange with Reporters, 2018 Daily Comp. Pres. Doc. 4 (Jan. 23, 2018) (“We're, as you know, negotiating a new deal with NAFTA.”). Even as President Trump seeks to renegotiate America's existing free trade agreements, other nations are forging ahead without the United States on new trade pacts. For example, on January 28, 2018, eleven Pacific Rim nations agreed to a renegotiated Trans-Pacific Partnership, a trade agreement that the Obama administration had originally helped negotiate but from which President Trump withdrew prior to ratification. See Chieko Tsuneko, TPP Members Reach Agreement on Major Trade Pact, Wall St. J. (Jan. 23, 2018), at https://www.wsj.com/articles/tpp-members-reach-agreement-a-year-after-u-s-exit-1516709064.

43 See Megan Cassella, The Steel Elephant in the Room at NAFTA Round 7, Politico (Mar. 5, 2018), at https://www.politico.com/newsletters/morning-trade/2018/03/05/the-steel-elephant-in-the-room-at-nafta-round-7-123039.

44 See Paul Vieira & William Maudlin, U.S. Cites NAFTA Progress But Rejects Canadian Proposals, Wall St. J. (Jan. 29, 2018), at https://www.wsj.com/articles/u-s-cites-nafta-progress-but-rejects-canadian-proposals-1517249003.

45 Off. of U.S. Trade Rep. Press Release, Closing Statement of USTR Robert Lighthizer at the Sixth Round of NAFTA Renegotiations (Jan. 29, 2018), at https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/january/closing-statement-ustr-robert [https://perma.cc/6GSD-YYQG].

46 Id.

47 See Trump Remarks, supra note 42.

48 Compare Curtis A. Bradley, Exiting Congressional-Executive Agreements, at 2 (Oct. 25, 2017), available at https://ssrn.com/abstract=3049279 (arguing that, because the president has the authority to act unilaterally on behalf of the United States in terminating Article II treaties, the president has the unilateral authority to terminate ex post congressional-executive agreements such as NAFTA), with Joel P. Trachtman, Power to Terminate U.S. Trade Agreements: The Presidential Dormant Commerce Clause Versus an Historical Gloss Half Empty, at 4 (Oct. 15, 2017), available at https://ssrn.com/abstract=3015981 (“[A]llocation of the power to terminate trade agreements to the President, acting alone, would be inconsistent with the substance of the Constitution's allocation to Congress of control over both international and domestic commerce under the Commerce Clause of the Constitution.”). If withdrawal were to occur, there remains the related issue of whether and to what extent implementing legislation remains applicable following withdrawal. See Galbraith, Jean, The President's Power to Withdraw the United States from International Agreements at Present and in the Future, 111 AJIL Unbound 445, 447 (2018) (noting that “[s]ometimes implementing legislation specifies that it will not outlive the underlying agreement, but other implementing legislation lacks such obvious signals”).

49 Jan. 30 White House Press Release, supra note 41.

50 Proclamation No. 9693, 83 Fed. Reg. 3,541 (Jan. 23, 2018); Proclamation No. 9694, 83 Fed. Reg. 3,553 (Jan. 23, 2018).

51 Proclamation No. 9693, supra note 50, at 3,541.

52 U.S. Int'l Trade Commission Press Release, 100- to 150-Seat Large Civil Aircraft from Canada Do Not Injure U.S. Industry, Says USITC (Jan. 26, 2018), at https://www.usitc.gov/press_room/news_release/2018/er0126ll898.htm [https://perma.cc/79N7-Q5CH]. Although duties spoke of “Canadian civil aircraft” generally, the catalyst for the complaint was Canadian aerospace company Bombardier's sale of its new C Series aircraft to Delta Airways. See U.S. Dep't of Commerce Press Release, U.S. Department of Commerce Initiates Investigation of Imports of Civil Aircraft from Canada (May 18, 2017), at https://www.commerce.gov/news/press-releases/2017/05/us-department-commerce-initiates-investigation-imports-civil-aircraft [https://perma.cc/CL5X-294X] (referencing Bombardier Press Release, Delta Air Lines and Bombardier Sign Largest C Series Order for up to 125 Aircraft (Apr. 28, 2016), at https://www.bombardier.com/en/media/newsList/details.delta-air-lines-and-bombardier-sign-largest-c-series-order-for-u0.bombardiercom.html [https://perma.cc/6328-UR2H]).

53 U.S. Dep't of Commerce Fact Sheet, Commerce Finds Dumping and Subsidization of Imports of 100- to 150-Seat Large Civil Aircraft from Canada (Dec. 20, 2017), available at https://www.commerce.gov/sites/commerce.gov/files/fact_sheet_commerce_finds_dumping_and_subsidization_of_imports_of_100-_to_150-seat_large_civil_aircraft_from_canada.pdf [https://perma.cc/6CPT-6Y3Z].

54 U.S. Dep't of Commerce Press Release, U.S. Department of Commerce Finds Dumping and Subsidization of Imports of 100- to 150-Seat Large Civil Aircraft from Canada (Dec. 20, 2017), at https://www.commerce.gov/news/press-releases/2017/12/us-department-commerce-finds-dumping-and-subsidization-imports-100-150 [https://perma.cc/PC82-GL5D] (emphasis added).

55 Compare 19 U.S.C. § 1862(c) (leaving to the secretary of Commerce, and ultimately the president, the authority to “determine the effects on the national security of imports”), with 19 U.S.C. § 1671d(b) (assigning authority to the USTIC to make the “final determination” as to whether an industry is “materially injured” or “threatened with material injury” for countervailing duties) and 19 U.S.C. § 1673d(b) (assigning the USTIC the same authority for anti-dumping duties).

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