Written by Jamie Rodgers, CEO of J.M. Rodgers Co., Inc.
It looks like the steel tariffs are here to stay, and so any company affected should plan for the long-term.
Shortly after the tariffs were put into place, a trade association of steel companies filed a lawsuit against their imposition in June of 2018. The lawsuit hinged on the assertion that the power that was provided to the President wasn’t proper, and so was taking too much power from the legislature. They believed that the law, Section 232 of the Trade Expansion Act of 1962, didn’t limit the President’s authority enough, and so imposing steel tariffs in this way was an overstepping of his authority.
The case was fast-tracked to appear before the Supreme Court, given that it had a huge impact on such a large amount of industries, with duties of over $4.5 billion being collected under these tariffs. They also said it was urgent because the President had also been threatening to impose tariffs on European cars under the same law, a threat that he has recently backed off from.
However, the Supreme Court unanimously rejected a hearing of the case, which means that for now, the tariffs will stay in place as they were. It’s possible that this association or other parties could sue in lower courts, but for the immediate future, it appears as if this is settled.
As discussed in my letter last week, the results for these tariffs have been mixed for the steel industry. While initially revenue went up and some investment was promised, prices on a world market dropped over time and US steel companies have seen dropping prices, revenues, and profit. As recently as the middle of last week, American steel behemoth US Steel announced the idling of many of its major blast furnaces in the Midwest due to sinking demand and prices.
Any duties paid on products under section 232 are not eligible for duty drawback. If you have any questions about how these or other duties would affect your company, please contact our VP of Sales Andrew Galloway at firstname.lastname@example.org or 973-726-5340.