Trump tweet linking Nafta, steel tariffs offers ammunition to opponents

6 March 2018 11:12pm

5 March 2018. By Adam Sigal.

The decision by US President Donald Trump to publicly link steel and aluminum tariffs to the North American Free Trade Agreement could risk the viability of those tariffs in US courts.

“NAFTA, which is under renegotiation right now, has been a bad deal for U.S.A," Trump tweeted on Monday. "Massive relocation of companies & jobs. Tariffs on Steel and Aluminum will only come off if new & fair NAFTA agreement is signed.”

The president announced his intent to implement a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports last week. The Trump administration is justifying the tariffs under Section 232 of the Trade Expansion Act, which allows the US to impose restrictions on trade when necessary to protect national security.

Linking such tariffs to Nafta exposes the administration to the argument that the action is not, in fact, designed to protect national security. If a vital national security interest were at stake, why would the president be willing to bargain it away?

US courts have given presidents wide latitude to take action to protect national security, but if the White House is willing to provide Canada and Mexico tariff exemptions in exchange for trade preferences, that could open the door for other countries to bring suit in US courts.

There are mechanisms, however, to seek an exemption from the tariffs. For example, the US Department of Commerce is likely to accept applications for products or countries to be exempted.

In the event of an unsatisfactory resolution to Nafta talks, the president could direct Secretary of Commerce Wilbur Ross to hold or deny any application for exemption from Mexico or Canada. However, such a move would likely be viewed by the courts as arbitrary and capricious under the Administrative Procedure Act, which governs the way agencies establish regulations.

Trump’s own comments could establish the agency was acting outside of its national security mandate.

In Mexico City, where trade officials of Mexico, Canada and US were concluding the seventh round of Nafta negotiations on Monday, Canadian and Mexican officials criticized the tariffs.

“Should restrictions be imposed, Canada will take appropriate measures,” Canadian Foreign Relations Minister Chrystia Freeland said.

Mexican Economic Minister Ildefonso Guajardo Villarreal in a tweet said Mexico should not be included in the steel and aluminum tariffs: “It is the wrong way to encourage the creation of a modern NAFTA.”

Trump's own informal Twitter style has complicated his agenda before, including his previous remarks about the steel and aluminum tariffs.

Likewise, his loose talk has created issues in legal matters such as the transgender military ban, the AT&T-Time Warner merger and the Deferred Action for Childhood Arrivals program.