Supreme Court Denies Hearing of Section 232 Constitutional Challenge, Bringing Case to Close

A high-profile legal effort to declare Section 232 tariffs unconstitutional has come to an unsuccessful end, after the Supreme Court on June 22 issued an order declining to hear the case. The high court’s denial of certiorari leaves the American Institute for International Steel, the trade group that filed the lawsuit, with no remaining options to continue its two-year fight against the tariffs, which it had argued were an unconstitutional delegation of congressional tariff powers to the president.

There’s “nothing further for us to do,” said Alan Morrison, the George Washington University law professor that represented AIIS. Though the Supreme Court’s order was issued without explanation, as is its common practice, the order in effect leaves in place the court’s own precedent from a 1976 case called Algonquin, which the Court of International Trade and the Federal Circuit of the U.S. Court of Appeals had both found binding in rulings against AIIS’s challenge (see 2002280058). The decision has implications for other Section 232 cases, including a class action lawsuit seeking a refund of all Section 232 tariffs that was filed in January (see 2001240036).

AIIS said it “regrets the decision” in a statement posted to its website June 22. “From the beginning of our challenge to the Presidential tariff-making at the heart of this case, we have been guided by one principle: we speak out when the cause is right and the livelihoods of our members and steel supply chain colleagues are harmed,” AIIS President Richard Chriss said. “Even though the Supreme Court did not today agree to accept our petition, our cause is still right. We reinvigorated a robust national conversation about the proper separation of powers in our system of ordered liberty. That conversation continues. Now it is up to Congress to place limits on Presidential decision-making.”

The American Iron and Steel Institute, a trade group that mainly represents domestic steel producers, applauded the decision. “This lawsuit by steel importers was a weak attempt to mask the fact that surging foreign imports have severely impacted the domestic steel industry and threaten our national and economic security,” AISI’s president, Thomas Gibson, said in a statement. “The decision by the Supreme Court today not to hear further arguments in this case is acknowledgement once again that Congress acted within its constitutional authority when it authorized the president to take action to adjust imports that threaten to impair our national security. We have consistently maintained this fact and are pleased that the highest Court agreed,” Gibson said.

The high court’s denial of certiorari was not unexpected, given that the percentage of cases granted a hearing every year hovers in the low single digits. “It was always considered a long shot the that Supreme Court would grant cert in this case, though there is a compelling argument that it should have,” said Dan Ikenson of the Cato Institute, which had filed an amicus brief in support of AIIS’s bid to get the court to take up the case.

But the denial means the executive branch retains broad leeway in setting tariffs under Section 232, said William Yeatman of Cato, who played a central role in drafting the think tank’s brief. “It's unfortunate that the Court condoned the lower courts' overly restrained approach to judicial review of the president's statutory powers,” Yeatman said. “The government wouldn't concede that a peanut butter embargo is subject to judicial oversight!” The upshot is that, “as long as the president utters the magic words ‘national security’” and jumps through “the minimal procedural hoops,” his Section 232 power is “unbound,” Yeatman said.

Any continued efforts to curtail that authority will now have to move through Congress, said Ikenson, who heads Cato’s trade policy center. “Ultimately, the onus was always on Congress to change the law and -- even without the Supreme Court hearing the case -- that outcome is possible, eventually,” Ikenson said. “For political and, perhaps, policy reasons, this Congress hasn’t mustered the will to reassert its Article I authorities over trade.”

“Reforming Section 232 and other trade laws that may be illegal or unconstitutional likely will require two-thirds of both chambers to override the president’s veto,” Ikenson said. “The question now becomes whether a veto override would be necessary if [Democratic presidential nominee-apparent Joe] Biden were president. Some like to think a more assertive Congress and an enlightened president could restore some balance between the branches to trade policymaking, but it’s not a given that Biden would be willing to weaken the executive branch by signing the legislation into law or that a Democratic Congress would even attempt to rein in the president. Congress continues to be quite content with its abdication of trade authority, frankly,” he said.