NAFEM addresses impact of Section 232 and 301 tariffs with Int’l Trade Commission

More than 85% of NAFEM members responding to a recent survey report that tariffs are impacting their abilities to control costs, and 60 percent report that Section 232 and 301 tariffs are causing severe economic harm to their companies. NAFEM shared this information with the U.S. International Trade Commission (ITC) to inform their ongoing investigation of the impact of the tariffs on U.S. industries.

“The Section 232 and 301 tariffs have negatively affected U.S. foodservice equipment and supplies production, raised costs for producers and consumers, and lowered the availability of completely U.S.-manufactured products,” NAFEM said in its comments. “Specifically, NAFEM’s U.S. manufacturing member companies have struggled with securing adequate steel and aluminum raw material inputs at competitive prices since the imposition of Section 232 tariffs in 2018.”

Additionally, since the implementation of the Section 301 tariffs on imports from China, NAFEM members have experienced a lack of supply and/or higher prices on critical components needed for their primarily U.S.-manufactured products.

The ITC initiated its investigation at the direction of the Omnibus Appropriations Act, which was signed into law on March 15. The law directed the ITC to prepare a public report that provides: 1) background information on the Section 232 and 301 tariffs and an overview of the tariffs that were in effect as of March 15; and 2) an economic analysis of the impact of those tariffs on U.S. trade, production, and prices in the industries most affected by these tariffs.

“The tariffs have caused significant economic issues for NAFEM members with respect to procuring raw material inputs, manufacturing finished equipment, and ultimately increasing prices for the U.S. consumer,” said Charlie Souhrada, CFSP, NAFEM vice president of regulatory & technical affairs.

In addition to its written comments, NAFEM testified at the July 21 ITC hearing. The Commission’s final report on the impact of Section 232 and 301 tariffs on U.S. industries is due to be published March 15, 2023.

Supreme Court limits EPA’s reach; ruling could impact other federal agencies and regulations

The ability of federal agencies to issue regulations without congressional authority was impacted by a recent U.S. Supreme Court decision that curbed the U.S. Environmental Protection Agency’s (EPA) right to regulate carbon emissions from existing power plants. In the majority opinion, Chief Justice Roberts wrote, “A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from the representative body.” In the dissenting opinion, Justice Kagan wrote, “The court’s decision strips the EPA of the power Congress gave it to respond to the most pressing environmental challenge of our time.”

According to NAFEM legal counsel Tammy Helminski, Barnes & Thornburg, “The scope of the agency’s authority is at the root of the Supreme Court’s concern. Usually, Congress writes laws generally and leaves it to the agencies to determine how to best implement. In this case, the Court believes this is a ‘major question’ that needs explicit authority from Congress for EPA to proceed.”

While this case focused specifically on the EPA’s ability to regulate power plants under the Clean Air Act, it has implications for other federal regulations. “This is a very blunt instrument that could chill a lot of regulation and climate policy by not just the EPA but other agencies,” said Jody Freeman, founding director of the Harvard Law School Environmental Law and Policy Program.

Conversely, Jonathan Brightbill, who argued the case for the government during the Trump administration, said. “Today’s ruling is one of the most significant developments in administrative law.”

“I think a large number of other administrative agencies will now be thinking really hard about certain policy proposals.”

Supreme Court watchers are now awaiting an expected ruling this fall in a case that deals with the waters of the U.S. (WOTUS). The Army Corps of Engineers and EPA use this description when determining what falls under their scope in the Clean Water Act. “Expect many legal challenges to be filed,” added Helminski.