Free Trade

Will These Lawsuits End Trump's Tariffs? More Than 3,500 U.S. Companies Hope So.

The lawsuits have been filed over the past two weeks by several major American companies, including retailers Target and Home Depot, car manufacturers Tesla and Ford, and several major manufacturing firms.

|

More than 3,500 American companies have filed lawsuits asking a federal court to cancel the Trump administration's tariffs on Chinese-made goods—by far the most significant legal challenge yet to the president's trade war.

The lawsuits were filed over the past two weeks in the U.S. Court of International Trade, a special federal court that hears cases involving customs laws and duties, on behalf of several major American companies. The plaintiffs include retailers Target and Home Depot, car manufacturers Tesla and Ford, and several major manufacturing firms. The companies are challenging what Dana Incorporated, an auto parts manufacturer and plaintiff, calls an "unbounded and unlimited trade war impacting billions of dollars in goods," Reuters reported.

The companies argue that the Trump administration failed to meet certain deadlines for imposing tariffs under Section 301 of the Trade Act of 1974, a federal law that gives the president authority to impose tariffs for the purposes of enforcing trade agreements or countering anticompetitive behavior by foreign countries. Trump invoked Section 301 when slapping an escalating series of tariffs on imports from China starting in 2018, but the lawsuits contend that the administration made procedural mistakes that should invalidate those tariffs.

Essentially, the court is being asked to determine whether Section 301 allows the White House to engage in what the plaintiffs call an "open-ended trade war," or if it merely allows a president to take distinct actions to counter perceived "discriminatory" actions by a foreign government, The National Law Review explains.

The companies concede in their lawsuit that Trump acted within his authority when he imposed 25 percent tariffs on about $50 billion dollars of annual Chinese imports in mid-2018. Those tariffs were implemented to counter what the Trump administration said was unfair practices by the Chinese government having to do with the theft of intellectual property from American-owned businesses.

But when the administration expanded the trade war to include 10 percent tariffs on another $200 billion of annual Chinese imports in 2019, the plaintiffs say it went too far. Section 301 allows a president to "modify or terminate" tariffs at any time, the plaintiffs argue, but it does not allow the government to expand tariffs beyond the initial action.

If the legal challenge is successful, the court would likely order the federal government to remove that second round of tariffs on Chinese imports and refund, with interest, the import taxes paid by American companies. "Duties paid by U.S. importers, by the way, not 'The Chinese,'" writes Dan Ikenson, director of the center for trade policy studies at the Cato Institute, a free market think tank.

This isn't the first legal challenge to Trump's trade war, but it is the first one to target Section 301 tariffs against Chinese-made goods. A previous effort filed by steel importers against tariffs imposed under Section 232 of the Trade Expansion Act of 1962 helped expose the hypocrisy of imposing tariffs for "national security" purposes on imports from allied countries, but their lawsuit failed to overturn them. The U.S. Supreme Court declined to take the case after the Trump administration prevailed at the U.S. Court of International Trade.

Even if the new legal effort succeeds, it would not revoke all of Trump's Section 301 tariffs and would not touch the Section 232 tariffs on aluminum and steel.

Congress, meanwhile, has been completely useless when it comes to reining in Trump's tariff powers. That means the best hope for ending Trump's tariffs probably lies with whoever occupies the White House next year.

Could a second-term Trump be more willing to abandon his failed trade war now that he no longer needs to appear "tough on China" to win reelection? Unlikely, but possible.

Alternatively, a newly inaugurated President Joe Biden could lift the tariffs with the stroke of a pen, though Ikenson warns that Biden could "perceive certain strategic and domestic political advantages in maintaining some, if not all, of those tariffs."

Ultimately, unless Congress takes steps to reform and limit presidential authority over trade, it seems like American businesses will continue to be at the mercy of whomever occupies the White House.

NEXT: This Time, We Really Should Think of the Children

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Would a libertarian support free trade with the Confederate States of America? Sure, economic freedom is an important part of liberty but should we profit off the use of slave labor?

    1. What you mean, we, kemosabe? What gives you the moral authority to tell me who I can and can’t trade with?

      1. Should a libertarian associate with people who so egregiously violate the NAP that they forcibly keep human chattel?

        1. It’s a valid question that each libertarian should ask himself. Trump didn’t bother, he assumed the moral authority to make the decision for everyone.

          Another point would be that if the actions of all Chinese manufacturers were so egregious, as you imply, why tax Americans for their actions? This strikes of pure protectionism, with some moral hand wringing as an after the fact excuse.

          Which brings me to my 3rd point. You can’t possibly think that all Chinese manufacturers are guilty of using slave labor, can you? So why a blanket policy?

          1. Probably because it is impossible to vet them individually.

            1. I make up to $90 an hour on-line from my home. My story is that I give up operating at walmart to paintings on-line and with a bit strive I with out problem supply in spherical $40h to $86h…DFc someone turned into top to me by way of manner of sharing this hyperlink with me, so now i’m hoping i ought to help a person else accessible through sharing this hyperlink…

              —————————–► Click here

          2. So to rephrase the question; knowing what we know about the same time Uighur holocaust and about slave camps making products for the US market, will you encourage purchases of Chinese products because there’s a good chance that they may not have been manufactured by slaves?


          3. It’s a valid question that each libertarian should ask himself.

            It is not. In fact, it’s a settled question that should be a barometer of if you are even vaguely libertarian. In no universe is slave labor anything other than a massive and fundamental violation of the NAP, and as such a ‘libertarian’ government would likely outright ban trade with governments (who also happen to run all the businesses) that engage in these kind of abuses.

            If you don’t see this, it seriously implies that you are not a libertarian of any stripe.

            Yeah yeah, I know, no true scotsman. But this Scotsman in particular, we know for sure, is anti-slavery and anti-ethnic cleansing yeah?

            1. And, just to be clear, I’m not the one that collectivized all Chinese businesses. The ChiCom did that.

              1. Conservative authoritarians want to dictate to us, with their labels! Conservative authoritarian declares Utah to be full of slave laborers? We will then NOT be allowed to buy stuff made in Utah!

                1. Except, of course, for the observable fact that Utah does not use slave labor whereas China most certainly does. Where are the concentration camps in Utah? Point them out on a map please. You can see pictures of the Chinese camps from space.

                  Libertarian philosophy, at least certain brands I suppose, is perfectly compatible with prohibiting trade with slavers. Because, you see, if it’s not a libertarians government’s job to enforce the NAP then what exactly is it’s purpose?

                  Wait, are you assuming a perfected enlightened man across the board? Where have I heard that before…

                  1. Slaves don’t get to control the fruits of their labor. To the extent that Government Almighty takes the fruits of our labors from us without any real choice left to us, we are ALL tax slaves, to include people in Utah! Leftists say we are slaves to corporate America, even when we willingly work for them for pay. Rightists label (willy nilly) their international scapegoats as being slavers. Who is, and who is not, a slave, isn’t totally a matter of black and white.

                    I say brainwashed conservative nut jobs are slaves to Der TrumpfenFuhrer! NO ONE should be allowed to freely buy from them, w/o paying taxes (tariffs) out the ass!

                    1. I quit working at shoprite and now I make $65-85 per/h. How? I’m working online! My work didn’t exactly make me happy so I decided to take a chance on something new…JGh after 4 years it was so hard to quit my day job but now I couldn’t be happier.

                      Here’s what I do…>> Click here

                2. Wow SQLSRY is a slave labor apologist, I knew they existed but damn.

                  1. He’s always been an evil, anti-human sociopath.

                3. Hello 1939 I knew you were hiding somewhere, wanting to make deals with CCP national socialists and such.


            2. You can’t possibly think that all Chinese manufacturers are guilty of using slave labor, can you? So why a blanket policy?

              Well, they all have the same ultimate owner that being the Chinese government so a better question is why allow exceptions for businesses that don’t overly use slave labor even though it’s the same umbrella.

      2. Leo, the answer to your question is in the question itself: morality gives me the right to question whether you are doing business with the nation which uses slave labor and doesn’t respect the human rights. Do you think that trading the slavers is moral? Do you think that laws of morality do not cover profiteering from the slave labor?

  2. You know who else wants to end Drumpf’s tariffs? Charles Koch, the billionaire who funds Reason.com.

    Rising from humble beginnings, Mr. Koch eventually became one of the 10 richest people on the planet. But that was before Drumpf’s high-tariff / low-immigration policies severely damaged his finances. Now, our benefactor is worth a pathetic $55.4 billion — barely enough to qualify for the global top 20.

    This. Is. Not. Normal.

    #VoteBidenToHelpCharlesKoch

    1. Koch Industries got started when Fred Koch stole intellectual property from Universal Oil Products and then helped Stalin set up oil refineries in Soviet Union. He also helped Hitler build the third largest oil refinery in the Third Reich which fueled the Nazi war planes. Nice hero you got there.

      1. It’s a parody account.

  3. We traded with Nazi Germany right up to when the British blockade prevented it and that worked out well.

    1. How dare you minimize the horrors of the Holocaust by comparing it to the Uighur internment camps. Last time I checked, the Nazis weren’t passing out pork chops and Pilsner beer to the camp inmates at Auschwitz!

    2. One would think that we have learned some lessons from the past.

  4. Subquestion: Are these lawsuits just trying to undo the Trump portion, or also the portion that was there before Trump?

    1. Sounds like they are going on a procedural violation and not unfortunately asking the court for where the Constitution was amended allowing the power to tax, to be placed in the executive branch.

      1. Which is a pretty fair question. Can Congress cede it’s authority through simple legislation? It would appear they can, although who is going to tell them no in this case?

  5. It’s a little ironic seeing this article sharing page space with the one saying we shouldn’t be selling weapons to the UAE. Funny how free trade gets thrown out the window when it might get us out of future wars.

    1. And remember the us in question is not the US government. It is the private businesses that actually make and design the weapons, who are doing the selling. If Reason is going to claim we’re doing business with ‘private’ chinese companies, it’s hypocritical to change their stance when it comes to private businesses in the defense industry.

      1. Cut Reason some slack. Journalists are just English majors who lack creativity.

        1. I’d give them more slack if the UAE writer was a regular, but they had to go out of their way to get her article. Which makes the paper own the stance all the more.

      2. The IP from defense contracts is generally owned by the US government. The government precludes the sale of such systems without their express consent per contract.

        1. That’s not how it works at all. The reason defense contractors can’t sell to other countries is because of ITAR. Which doesn’t give a flying fuck if the government ever gave you a red dime in exchange for your product. If the gov decides that your product is related to national defense, you aren’t allowed to sell it without their permission.

          The IP retention you are talking about is just an unlimited license for the government to recreate and use the technology you developed. It does not prevent you from selling the technology to anyone. It just prevents you from stopping the government from taking your hard developed technology and outsourcing it to a new manufacturer.

          So no, Reason is still being massively hypocritical here, because banning people from engaging in trade entirely is worse than putting a tax on it.

    2. ^ This.

      One could, I guess, say that they’re just saying that we ‘shouldn’t’ be selling weapons to UAE’ instead of ‘we should be outright prohibited from doing it’. However, when a business stands to make billions of dollars selling nukes to North Korea who are we to stand in their way?

      (And before someone points out nukes aren’t privately developed or owned weapons, one might note that’s because the U.S. government won’t let them build nukes. No one seriously believes G.E. can’t build one if the price is right.)

      There is no consistent principle shown here.

    3. Even more ironic because the UAE doesn’t have any aspirations or capability for world domination, while China does.

  6. C’mon man! Trump declared a national emergency and everybody knows the Constitution and all the laws passed subsequent to the Constitution are no longer operative when there’s a national emergency. Like it or not, Trump can do anything he wants, that’s the law.

    1. If it saves just one American life… you should be thankful to be paying the American government taxes on those USB cables you wanted to buy from Alibaba. Could you imagine how many Americans might die if they were 30% cheaper to you?

      1. What I imagine is how miserable life in the US will be when we become a satellite state of the Chinese. The Chinese own over $1T in US debt. Every time you buy a USB cable from China, you add money on top of that pile of debt.

        They can buy a substantial fraction of the NASDAQ or DOW with that. That kind of ownership brings a lot of political power, because there are jobs and IP tied to it.

        To China, money and debt isn’t about personal or societal wealth, it’s about global power and influence. The Chinese government uses its economy in order to restore China to what they think is its rightful place: as the dominant power at the center of the world.

    2. The Constitution provides for tariffs.

      The initial funding for the early federal government mostly came from tariffs.

  7. Kind of conflicted on tariffs. On the one hand, they might hurt consumers. On the other hand, they might encourage domestic consumption and punish corporations that engage in outsourcing.

    The BLM riots were an eye-opening moment for me. They made me realize that corporations are the agents of the New Cultural Revolution. If impeding their ability to profit makes them stop pandering to the woke mob, so be it. I don’t give a damn about the “rights” of corporations, which is distinct from individual liberty. Would rather be a Pat Buchanan or Ross Perot than a Mitt Romney.

    1. *which are distinct from the liberties that individuals are entitled to

    1. Jesus what a cuck.

    2. That almost reads like satire.

  8. Does the President know by increasing tariffs on Chinese steel that he allowed other countries steal manufacturers to raise their prices, effectively helping those nations while making me poorer? I get the bulk of my steel from West Africa, and those bastards took that opportunity to raise my prices. It’s like they don’t know that the first A in MAGA is for America not Africa.

  9. Poor Boehm.

  10. The Trump administration says tariffs on Chinese goods were justified because China was stealing intellectual property and forcing U.S. companies to transfer technology for access to China’s markets.

    1. China has no free market system. Trading with China is trading with the nation which uses slave labor, doesn’t respect the intellectual property and heavily subsidizes many of the companies that US companies compete against. China is an enemy, as long as they are a communist dictatorship. We shouldn’t be trading with the enemy.

  11. This is one of the reasons why I don’t want to vote for Jo Jorgensen. I am all for the free market and leveled playing field, but the playing field MUST BE leveled. It is a sham to require an American worker to compete against a Chinese worker paid $0.25 working for a state subsidized factory which uses intellectual property stolen from the Americans. I have no problems with Reagan’s decision to let Ford compete with Mercedes, BMW, Toyota, Honda and Nisan. That is all cool and kosher. So is the competition between Boeing and Airbus or Samsung and Apple. However, free trade with companies using slave labor of the political prisoners and enslaved ethnic minorities is not to my liking. Long story short, I don’t think that free trade with a country which doesn’t have a free market system makes sense. Huawei made the name for themselves by reverse engineering Cisco routers and selling them at half the price. Then they started copying Samsung phones and selling them at half price. Of course, the knowledge was purloined from Apple and Samsung and the OS is from Google. Huawei is heavily subsidized. We shouldn’t be doing business with any country which doesn’t have the free market system. Somebody up there has made an analogy with trading with the confederate states of America. It is an extremely good analogy. We all know how the cotton, tobacco and rice were produced in the old South. Trading with China is simply not the right thing to do.

    1. And let’s be clear why China is using slave labor to produce exports for the US and European markets at below cost in a free market: they use the proceeds from those exports to buy factories, real estate, investments, and debt in the US and Europe, and the more they buy, the more political power they have because Western politicians fall over over themselves to conform to the owners of corporations, not because of donations, but because of the voters that those corporations employ.

      China is using its slave labor, subsidies, and exports to attack the West through its free markets and its democratic system. It’s a typical Sun Tzu move for winning a war without fighting.

  12. Making Cash more than $15k to $18k consistently just by doing basic online work. AZS I have gotten $18376 a month ago just by working on the web. Its a simple and basic occupation to do from home and its profit are greatly improved than customary office work. Each individual can join this activity now just by pursue this link……..go to this site home media tech tab for more detail support your hear
    Here
    ══════❥❥❥❥ my work is my personality.. CLICK HERE FOR FULL DETAIL

  13. Could a second-term Trump be more willing to abandon his failed trade war now that he no longer needs to appear “tough on China” to win reelection?

    You’re still thinking that Trump operates like a politician. He doesn’t.

    Trump imposed tariffs on China because he believes that China is a hostile regime using trade to attack the US economy and gain influence. You may disagree with him (e.g. because of the usual faux libertarian arguments about free trade), but he doesn’t do this for appearances.

Please to post comments

Comments are closed.