From Inside U.S. Trade:

President Trump can no longer impose tariffs on autos using Section 232 of the Trade Expansion Act of 1962 because a statutory deadline has lapsed, two trade analysts argued this week.

“Importantly, although Section 232’s language is quite generous in the authorities it delegates to the Executive, it is not a carte blanche for a president to unilaterally tax any import he wishes in perpetuity,” the R Street Institute’s Halie Craig and Clark Packard asserted in a Jan. 7 blog post. Craig is a former trade staffer for Senate Finance Committee member Pat Toomey (R-PA). Packard is an attorney who previously advised the National Taxpayers Union on trade issues.

The Commerce Department concluded its Section 232 autos probe last year, sending President Trump a report saying imports of autos and parts threatened national security. The report has not been released. Trump then set a 180-day deadline for negotiations with Japan, the European Union and other countries, hoping to ensure restrictions on imports. The deadline passed in mid-November of last year without action from the White House.

“As a result, there is a strong argument that the administration has entirely forfeited its legal authority to tariff autos and auto parts under Section 232,” Craig and Packard wrote. “President Trump’s only options on that date were to take additional action or shut the book on Section 232 auto tariffs entirely.”

Craig and Packard said Section 232 makes “clear that, by the end of the 180 days, the president must (‘shall’) make some determination about how to proceed, including identifying specific ‘additional actions’ to address the threat of imports.”

“This is important: The statute should not be interpreted to permit the president to make a decision after 180 days have elapsed; otherwise, the 180-day limit on initial negotiations is entirely meaningless as a procedural benchmark and might as well have been left out of Section 232 altogether,” they continued.

Toomey has made a similar argument, saying last November that the “window” for Trump to impose tariffs had closed. A major auto dealers group told Inside U.S. Trade it would consider mounting a legal challenge to any auto tariffs based on a decision by the Court of International Trade in a case involving Section 232 tariffs on Turkish steel, which Trump doubled months after initially imposing them. Craig and Packard pointed to the same CIT decision in making their case.

“The Trump administration’s lawyers argued that the president could daisy-chain new trade restrictions by amending his initial Section 232 steel and aluminum tariff proclamations from five months prior. The court rejected this argument, ruling that the administration had violated Section 232’s procedural timelines (as well as the equal protection clause of the Fifth Amendment),” they wrote.

Bradford Ward, a partner at King & Spalding and a former official with the Office of the U.S. Trade Representative, however, told Inside U.S. Trade last November that the CIT, in its ruling, made a distinction between the action the president took in the Turkish steel case and “ongoing action” such as the autos decision. Ward said that once a negotiation phase begins, there are no subsequent explicit deadlines for the president to act under Section 232. “It would appear, in other words, that where they are now there isn’t a clear statutory deadline that requires them to take action on any particular timeline,” he said.

Craig and Packard acknowledged that the CIT did not comment on “continuing action” by the president, but added that the “court’s logic would suggest that daisy-chaining negotiations into perpetuity, all the while reserving the right to impose tariffs if talks go south, also contravenes the purpose of including ‘prescribed time limits’ in Section 232.”

“If negotiations could continue indefinitely, in secret and without formal notification from the president by a certain point in time, why would Congress have bothered to specify 180 days as the deadline for the president to decide whether to take additional action?” they asked.

“The White House will in all likelihood cling to this small sliver of ambiguity in Section 232 to justify future tariffs on auto imports, should the president decide on a whim to tax foreign Volkswagens, Toyotas or cars assembled in Mexico,” they added. “But the auto industry, Congress and American taxpayers should be willing to call the administration’s bluff: The President has missed his window to legally impose auto tariffs under Section 232.”