Lawyers Wonder If Section 301 Investigation on Auto Imports Is Next
The silence from the White House on auto tariffs and a Court of International Trade ruling on 50 percent tariffs on Turkish steel (see 1911180013) has left some trade lawyers wondering whether the window has closed to levy Section 232 tariffs on European cars. The panel of judges said that the law “cabins the President's power" procedurally, because of its deadlines. The Trump administration missed its deadline of Nov. 14 last week.
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Akin Gump Attorney Devin Sikes blogged that when the government argued that a president could modify any Section 232 at will, "The CIT emphatically disagreed, holding that '[t]he President’s expansive view of his power under [S]ection 232 is mistaken, and at odds with the language of the statute, its legislative history, and its purpose.'" Meanwhile, Reuters reported that European Union Trade Commissioner Cecilia Malmstrom said that the EU had not been formally told that no tariffs are coming. But, she said, "there are severe legal limitations for the president to take further action."
Former World Trade Organization appellate body member Jennifer Hillman, who now teaches at Georgetown Law School, tweeted that the CIT decision confirms her view that the auto Section 232 case is now a dead letter. But, she and other lawyers say, that doesn't mean that there's no way to impose tariffs on auto imports. She tweeted Nov. 22 that the administration could start a new 232 investigation, or a Section 301 investigation.
Simon Lester, associate director of the Cato Institute's trade policy center, said in a phone interview that he does think it is weird the administration said nothing as the deadline passed for auto tariffs. He said maybe the administration is trying to decide if it is going to appeal the CIT ruling to figure out what it can say about its plans for auto tariffs.
He said he heard the administration could consider a Section 301 investigation on European auto exports, but he said it doesn't seem all that credible that German automakers have been engaging in unfair trade. He acknowledged that it's not that credible that auto imports are a threat to national security, either.
Then he said, "We’ve got this authorization to retaliate with Airbus subsidies -- couldn’t we just put tariffs on autos that way?"
But the Office of the U.S. Trade Representative chose to target European food exports, British apparel, blankets and bed linen, German and British hand tools, lenses, books and self-propelled heavy equipment, along with a lower 10 percent tariff on large civil aircraft.
Lester said the fact that the deadline came and went with no comment and that auto parts and autos were not part of the Airbus retaliation list suggests the administration doesn't really want to tax these products. Instead, he said, it seems like " they want to keep it out there" as a threat. But, he said, Europeans, too, can see that the administration doesn't want to impose the tariffs, so he doesn't see why a new investigation would have any more leverage in trade talks than the first one did.