Steel tariff suit challenges delegation of legislative power

Congress has broad discretion to delegate its legislative power to the president. This delegation is not unfettered, however. A case pending in the U.S. Court of International Trade, which has exclusive jurisdiction over trade-related powers delegated by Congress to the executive, tests the limits of Congress’ power. The case is significant, because it has the potential to affect the president’s use of tariffs based on the claim of national security.

On June 18, the American Institute for International Steel filed a lawsuit arguing that President Donald Trump’s recent imposition of a 25 percent tariff on imported steel from certain countries based on “national security” is an unconstitutional delegation of Congress’ power. Congress has failed, they assert, to provide the president with intelligible guidelines on the use of tariffs and quotas. They ask for declaratory and injunctive relief with respect to those tariffs and other trade barriers imposed by Presidential Proclamation 9705, Trump’s March 8 order adjusting duties on steel imports.

The U.S. Constitution gives Congress the “power to lay and collect taxes, duties, imposts and excises” and to “regulate commerce with foreign nations” (Article I, Section 8, Clauses 1, 3). Congress has the accompanying power to make the laws necessary to carry out those powers. Because Congress has the sole authority over the regulation of tariffs and foreign commerce, the president must properly be given the authority to act in these areas by statute.

The guiding constitutional principle is that the authorizing statute must empower the president to act as an agent of Congress by carrying out its will, and not as a grant giving the president lawmaking power. The U.S. Supreme Court has held that a delegation by Congress is constitutional only if it includes “intelligible standards” that guide the president in exercising the granted power.

The Trade Expansion Act of 1962, which was enacted during the height of the cold war with the former Soviet Union, is the relevant statute. It was a reaction to the concern that U.S. industries might become too reliant on foreign producers, and thereby threaten national security. Section 232 provides that if the secretary of commerce determines that “an article is being imported into the United States in such quantities or such circumstances as to threaten to impair the national security,” then the president is authorized to take certain “actions necessary to adjust the imports of such article.”

In Federal Energy Administration v. Algonquin SNG, Inc., 426 U.S. 548 (1976), the plaintiffs challenged a presidential proclamation that raised license fees on imported oil under Section 232. They argued that the fees were beyond the president’s authority, and therefore constituted an unconstitutional delegation. The Supreme Court rejected the argument. It held that Section 232 did not constitute an improper delegation because the statute established “clear preconditions” to presidential action, including required findings by the secretary of commerce. In addition, Section 232 sets forth specific factors to consider in exercising presidential authority. Unless the Court of International Trade distinguishes Algonquin, the Supreme Court’s reasoning is a serious obstacle to the plaintiffs in the present case prevailing on the unconstitutional delegation claim.

The plaintiffs concede that their challenge is not based on whether the president acted within the scope of Section 232. This also is the position of the Department of Justice, which represents the executive. Why the plaintiffs conceded this point in their complaint is not clear. Perhaps it was intended to emphasize their view that the president’s unfettered discretion offends the checks and balances protected by the Constitution. Regardless of the reason, the claim that “intelligible standards” do not exist is not the only theoretical argument.

The question of whether the president’s action falls within the scope of that power should have been argued. The argument is complicated, however, by the fact that Section 232 does not have a provision for judicial review, and judicial review is not available under the Administrative Procedure Act because the president is not an administrative agency.

The court admittedly will not examine the president’s reasoning as to the existence of a national security emergency, or the facts that led Trump to this determination. But judicial review should be able to consider whether the tariffs imposed by the president bear a reasonable relation or nexus to the national security determination. This review should also extend to the subsequent granting of waivers or exemptions from the tariffs by the Department of Commerce.

In the complaint, the plaintiffs cite press reports that “Trump has officially put more tariffs on U.S. allies than on China,” which is ironic given the national security rationale for the tariffs. The changing justification for the tariffs also is troubling. The official justification for the additional tariffs now proposed by the president is based on Chinese mercantilism, not national security.

Deference to the president and the decision making process is clearly appropriate under Section 232. But the president ought not to be able to wave the wand of “national security” to avoid judicial review. Allowing the president to do whatever he wants to fix what he perceives as a national security problem is not consistent with our constitutional system of government.

John Minan is an emeritus professor of law at the University of San Diego School of Law.