Toomey Says He's Not Sure if Current Section 232 Tariffs Will Be Rolled Back Through Congressional Action

Sen. Pat Toomey, R-Pa., is leading the charge to roll back Section 232 tariffs and put Congress in the driver's seat for future 232 actions, but he doesn't know how close the consensus Senate Finance Committee bill will come to his vision for how to address what he called an antiquated law.

The biggest difference between his bill and the one introduced by fellow Republican Sen. Rob Portman of Ohio is that Toomey's would not allow any future tariffs to go forward without congressional approval, and Portman's would expand Congress' ability to disapprove of Section 232 tariffs. Portman's approach means Congress would have to find a veto-proof majority to stop Section 232 tariffs.

"I really think this is the central element of our bill," Toomey said March 28 in a speech at the Washington International Trade Association. If the approval failed in either chamber, the tariff would not become effective. And the Senate approval would be subject to cloture, and so would require 60 votes.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, is trying to split the difference between the two bills by allowing tariffs to go forward without congressional approval, but limiting how long they can last without affirmative approval. Toomey said he didn't want to negotiate in public, declining to answer an International Trade Today question about whether a 90-day duration, or a month-long duration, would be acceptable to him. "It is a subject of conversation," he said.

But Toomey said he and Grassley see eye-to-eye on the importance of reclaiming congressional authority in the matter, and that the administration's willingness to impose tariffs around the world on many products -- including cars -- is an abuse of the national security statute. "My staff and his staff are working together every day to get to a bill we can move," he said. "It won’t be identical to my bill, but I'm hoping it will be substantively equivalent."

Another major divergence between the Portman and Toomey bills is that Portman's leaves the steel and aluminum tariffs in place, and Toomey's requires congressional approval for them to continue. When asked by a trade group that represents manufacturers that make metal fasteners and formers whether the current tariffs will be part of the compromise bill, Toomey replied: "That’s one of the more controversial parts. I don’t know how it ends up."

A panel of trade lawyers who spoke about Section 232 after Toomey's speech agreed there is some momentum for a law to restrict the use of Section 232, but they did not predict it will pass this year. All agree it would need veto-proof margins to become law. Stacy Ettinger, a partner at K&L Gates, said, "I do expect they will craft an excellent compromise piece of legislation. I do think the legislation will move through the committee without issue." But then it starts to get fuzzy, she said. Even if it has the support of 67 senators, if the majority of that support is from Democrats, the Senate majority leader is unlikely to schedule it for a vote. "If we look at the track record of Leader [Mitch] McConnell, he’s clearly tread very cautiously at poking the president in the eye."

So, Ettinger said, it's unlikely to go to the floor as a stand-alone bill, but it's possible it could become an amendment to some must-pass legislation. "They could get there, but I’d say maybe a 50/50 chance we end up in stasis," she said, with more than 60 votes in the Senate, but not enough to override a veto.

If it were to become law, Ettinger has questions about how it would work for companies that have been paying the duties. If it does end the current Section 232 levies, what’s the transition process? Will there be refunds of previously paid duties? Liquidated or just unliquidated?

Vanessa Sciarra, the top trade policy executive at the National Foreign Trade Council, said there's not enough momentum to get it through both chambers with veto-proof majorities. "I think there will be 232 reform -- it's not going to be quick," she said. "We’re going to be talking about this for a couple of years."

The panel also included Robert DeFrancesco, a former White House lawyer who helped shape the current policy. He argued that the tariffs are reviving aluminum smelting and the steel industry without significantly damaging employment at downstream users. "Converting it to an approval mechanism essentially kills the statute and you’ll never use it again," he said. He even criticized the idea of giving the Pentagon the decision-making power on whether an imported product is a national security threat. That element is in both Portman's and Toomey's bills. "The Department of Defense is the customer," he said. "Customers don’t like to pay fairly traded prices for their products."