Last week, the Liberty Justice Center (the public interest group I worked with on the case challenging Trump’s earlier IEEPA tariffs, which led their invalidation by the Supreme Court) filed the first lawsuit challenging President Donald Trump’s massive Section 338 tariffs against a variety of Canadian imports. Three days later, Trump exempted some previously covered Canadian products from the tariffs, probably to help Maine Sen. Susan Collins and other congressional Republicans fearful of voter backlash in the upcoming midterm election:
President Donald Trump signed a proclamation on Friday that removes some Canadian products from tariffs imposed under Section 338 of the Tariff Act of 1930 and adds others, the White House said. The changes take effect Oct. 30.
Plywood sheets, some paper products, certain machinery and refrigeration equipment, and certain packing crates and boxes come off the list. Some valves, along with carpets, waste products and other goods, take their place.
The tariffs, set at 50% according to CNBC, apply whether or not a good originates under the U.S.-Mexico-Canada Agreement….
The fact that American businesses and consumers in states like Maine are suffering from the tariffs gives the lie to the notion that only foreigners are burdened by them. Trump’s action here also underscores how the tariffs have become highly unpopular, and a drag on GOP prospects in the upcoming election.
While Trump may have (perhaps only temporarily) lifted some of the Section 338 tariffs, most remain in place. As noted above, he imposed additional tariffs on some goods, even as he lifted them on others. And the Section 338 tariffs are still still illegal for a variety of reasons I summarized in my previous post on the LJC lawsuit against them, as well as earlier writings:
I have previously written about why Trump’s Section 338 tariffs are harmful and illegal. See my recent Montreal Economic Institute paper on this topic, and earlier pieces here, here, and here. To briefly summarize, the tariffs on Canada are illegal because 1) Section 338 has been superseded by later legislation, 2) even if Section 338 is still operative, Trump’s tariffs do not meet its requirements because the Canadian actions they supposedly respond to do not “discriminate” against US goods, as the law requires, 3) Trump’s tariffs do not “offset” the Canadian actions (as Section 338 also requires), but go far beyond that, 4) the administration’s interpretation of Section 338 runs afoul of the “major questions” doctrine, and 5) if Section 338 is operative and does authorize the Trump actions, it would violate the constitutional nondelegation doctrine (which restricts delegation of legislative power to the executive).
The LJC complaint advances all five of these arguments. To prevail, they need win on only one.
Trump has also used Section 338 to ban some Canadian imports entirely. That too is illegal, though the bans (unlike the tariffs) are not directly at issue in the LJC case. They may well be challenged in future litigation, however.
In addition to illegally usurping congressional power over taxation, the Trump trade war against Canada damages our economy and poisons relations with a key ally. Courts should strike it down, just as they did with the IEEPA tariffs and the more recent Section 122 tariffs. They should also invalidated the massive Section 301 “forced labor” tariffs, which have been challenged in three cases currently before the US Court of International Trade.
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