The Trump administration’s latest volley of tariffs include those imposed under section 301 and those imposed under section 338. The 50% tariffs now in effect on Canada (with more threatened on January 1) are putatively under the authority of section 338, and the replacement for the illegal IEEPA tariffs are putatively under the authority of section 301. The bridge to the section 301 tariffs were tariffs imposed under section 122, which have since expired (as the statute limits their use to 150 days).
Section 301 Challenges
The replacement for the IEEPA tariffs came in the form of section 301 tariffs, which imposed blanket tariff rates between 10% and 12.5% on most countries. The putative justification for these tariffs is forced labor practice in the countries on which the tariffs were imposed. Multiple challenges were filed in the Court of International Trade, and the cases were consolidated under the caption, In Re Section 301 Forced Labor Cases. The court selected Learning Resources, Inc. v. United States as the sample case for purposes of the Court’s initial consideration and resolution of the plaintiffs’ claims. All other cases were stayed pending resolution of the sample case.
The plaintiffs filed their motion for judgment on the agency record yesterday, and the government will file their response brief no later than September 4. The reply brief is due September 18, and oral argument is scheduled for September 30 before Judges Choe-Groves, Reif, and Wang. (Judge Reif was part of the CIT panel that ruled against the government in the IEEPA tariffs.)
Section 338 Status
While there has not yet been any legal challenge associated with the newly imposed tariffs on Canada, such a challenge is surely days (if not hours) away. The legal arguments behind any challenge is likely to fall into three buckets. First, as I have previously noted, there is a colorable argument that the operative portion of section 338 has been repealed by statute and is therefore unavailable to impose tariffs. Second, even if it has not been repealed, Peter E. Harrell and Jennifer Hillman make the case in The Volokh Conspiracy that the way they have been employed against Canada is inconsistent with the statute. From the piece:
The strongest arguments against Trump’s 338 tariff actions are that he misapplied the statute.
First, Section 338 authorizes the President to impose tariffs to “offset such burden or disadvantage, not to exceed 50 per centum ad valorem or its equivalent, on any products of, or on articles imported in a vessel of, such foreign country.” . . . . The two key criteria of a tariff designed to “offset” a harm are (a) that the tariff apply to the goods that benefit from the practice being offset, and (b) that its amount match or approximate the value of that harm.
Trump’s Section 338 tariffs fail to meet either criterion. They target a vast array of products beyond the scope of the purported Canadian discrimination, including hockey sticks and cement, rather than being tailored to cars, dairy products, and alcohol; the motor-vehicle action covers no motor-vehicle tariff lines at all.
The third line of argument would be to build off the Supreme Court’s holding in Learning Resources, Inc. v. Trump, where the Court firmly rejected the notion that the President has unilateral authority to impose tariffs. While that case focused on tariffs imposed under IEEPA, the Court rejected the idea that IEEPA could be read “to effect a sweeping delegation of Congress’s power to set tariff policy—authorizing the President to impose tariffs of unlimited amount and duration, on any product from any country.” While section 338 has a limitation (they’re capped at 50%), it is clearly the President who is setting the tariff policy, but our Constitution assigns that responsibility to Congress.
Section 122 Challenges
Following the Supreme Court’s decision in Learning Resources, which invalidated any tariffs imposed under the authority of IEEPA, the Trump administration responded by immediately imposing replacement tariffs under the auspices of section 122 of the Trade Act of 1974. Those were almost immediately challenged, and in a panel decision by the Court of International Trade, the court found those tariffs to be unlawful. The government appealed, and the Federal Circuit granted a stay pending appeal. (Since these tariffs are no longer operative, the effect of this stay is merely to prevent any tariffs paid from being refunded.)
The government filed its opening brief on July 21 (the linked version is a corrected version filed July 29), and the appellees’ responses are due Monday. Assuming that brief is filed Monday, the government’s reply brief will be due three weeks later, at which point the case will be fully briefed and will await oral argument. Because tariffs are no longer being collected under this statute, there is perhaps less urgency for this case to be resolved than there was for the IEEPA tariffs.
