A fair number of commentators believe the Supreme Court is soon set to invalidate President Trump’s use of the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs.  This begs the question: what next?  President Trump and high-ranking administration officials have stated publicly and repeatedly that they have a plan to continue the tariffs should the Court rule against the administration.  Exactly how the administration plans to do so has been held closer to the vest.  Well-known options like Section 232 and 301 are currently being used and have been discussed as possible, albeit less desirable alternatives, and most businesses already are painfully aware of their existence.  However, lurking in the shadows is a statutory provision, first enacted in 1922 and only slightly modified in 1930, authorizing the President to impose new or additional tariffs on countries that discriminate against U.S. commerce or articles thereof.  Section 338 of the Tariff Act of 1930 is that statute and it may be about to step out of last century’s shadows into today’s headlines. 

A few aspects of Section 338 will be of keen interest should President Trump utilize the statute to rehabilitate the IEEPA tariffs. 

First, is an investigation required?  The statute states that the President must make findings of fact before acting.  But how that finding of fact will be made remains to be seen.  In the past, the proceedings appear to have been conducted confidentially, but a lot has changed since then, especially with sunshine laws. 

Second, what will the role of the U.S. International Trade Commission be in any fact finding?  The statute provides that the Commission is to be informed “at all times” of discrimination against the commerce of the United States and when it learns of any discrimination, it must inform the President and provide recommendations.  The Commission’s annual reports from 1922 forward report numerous applications and proceedings were conducted under Section 338 and its predecessor (Section 317).  

Third, will interested parties be able to file petitions with the Commission requesting relief from discrimination?  Although nothing in Section 338 speaks directly to this, it is clear from past practice that stakeholders could bring applications for relief.

Appleton Luff’s team of international trade experts stands ready to assist your company – no matter what happens next.