Steel Exporter Scoffs at ‘National Security’ Basis for New Tariffs

MANHATTAN (CN) – Decrying the measures as a political ploy, a Russian-owned Swiss steel exporter brought a federal complaint Thursday to strike down tariffs on steel and aluminum ordered this month by President Donald Trump.

Represented by the Washington firm Thompson Hine, the Swiss company Severstal Export GmbH and its U.S. affiliate, Severstal Export Miami Corporation filed its suit Thursday in Manhattan at the U.S. Court of International Trade.

Seeking injunctive relief, the exporter says Trump’s March 8, 2018, steel proclamation is unconstitutional “because his stated national security justification is a pretext.”

The suit names Trump and the U.S. government as co-defendants, along with U.S. Customs and Border Protection, Acting CBP Commissioner Kevin McAleenan, the Department of Commerce, and Commerce Secretary Wilbur Ross.

Trump’s “tariffs are scheduled to be implemented on March 23, 2018, with no declared end date,” according to the complaint.

Noting that the proclamation exempted America’s largest steel exporters, Mexico and Canada, Severstal calls it clear that Trump’s claim to be enacting the tariffs for national security “is a specious pretext.”

“The president’s public statements on these exemptions lay bare that not only was the steel proclamation a political move, but the true rationale was simply that of seeking leverage in other trade negotiations,” the complaint continues.

Rather than protecting national security, Severstal says the tariffs are Trump’s way of making good on his promise to “bring jobs home.”

“Since the asserted national security grounds were a thinly veiled pretext for the president’s political agenda and his America First economic policy, the steel proclamation is unconstitutional and should be struck down,” the complaint states.

Severstal emphasizes that the authority delegated to Trump by Congress to impose tariffs is limited to circumstances where he was legitimately acting in the interest of national security.

Claiming that enactment of the 25 percent tariff will inflict “immediate, severe, and irreversible injuries,” Severstal wants Trump’s proclamation ruled unlawful and unconstitutional as applied to the Swiss steel importer, including its vessels containing steel products that are currently in transport by sea to the United States.

Severstal has an undisclosed amount of steel products headed for U.S. customers under contracts it entered into prior to March 8 proclamation, according to the complaint.

With the tariffs now taking effect, these shipments would be subject to the 25 percent duty, but Severstal says its Miami affiliate lacks sufficient funds to pay.

The tariffs “will effectively wipe out the plaintiffs’ painstakingly built U.S. business and ruin the goodwill and reputation that has taken over 20 years to grow and develop,” the complaint states.

Both plaintiff parties are wholly owned subsidiaries of PAO Severstal, a Russian producer of carbon and alloy steel products.

Representatives from PAO Severstal told Reuters that the United States accounted for just 2 percent of Severstal’s sales, though the company’s shares were down 2 percent.

Some time after Severstal filed its suit Tuesday, U.S. President Donald Trump announced that member states of the European Union, a class to which Switzerland does not belong, would be temporarily excluded from the recently hiked tariffs on steel and aluminum, along with Argentina, Australia, Brazil, South Korea, Canada and Mexico.

The exceptions will expire on May 1, 2018, as discussions continue, at which time Trump would decide whether to permanently exempt the countries based on the status of negotiations.

A representative from the Department of Justice said they are reviewing the filing.

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