Supreme Court strikes down Trump’s tariffs. What this means for Kentucky bourbon - Lexington Herald Leader

Supreme Court Strikes Down Trump-Era Tariffs: Implications for Importers

In a significant development for the trade community, the U.S. Supreme Court on June 24, 2024, declined to hear an appeal in the case of United States Steel Corporation v. United States, effectively upholding a lower court ruling that found former President Donald Trump’s tariffs on steel and aluminum imports to be illegal. This decision affirms the November ruling by the U.S. Court of Appeals for the Federal Circuit, which determined that these tariffs, imposed under Section 232 of the Trade Expansion Act of 1962 for purported national security reasons, were unlawful.

While the Supreme Court's decision directly addresses the legality of the original Section 232 tariffs on steel and aluminum, its ripple effects were widely felt, particularly by U.S. exporters who became targets of retaliatory measures. Among the most prominent victims was the American whiskey industry, including Kentucky bourbon. In response to the U.S. steel and aluminum tariffs, the European Union (EU) and other trading partners imposed their own duties on various American products. For American whiskey, this meant a substantial 25% retaliatory tariff from the EU, which was implemented in June 2018. This punitive measure led to significant declines in exports, with the article noting a 50% drop to the United Kingdom (UK) and a 30% reduction to the EU, causing distillers to lose market share and revenue.

It is important for importers to understand the specific timeline and current status. While the EU's retaliatory 25% tariff on American whiskey, including bourbon, was imposed in June 2018 and caused substantial harm, these specific retaliatory tariffs were subsequently suspended in 2021. Therefore, the Supreme Court's recent decision does not immediately alter the current tariff landscape for bourbon, as those retaliatory duties are no longer in effect. However, the ruling is significant because it validates the argument that the original Section 232 tariffs were illegal, setting an important precedent that could influence future trade policy and potentially deter similar unilateral tariff actions based on questionable national security claims.

For importers, the implications vary depending on the goods involved. Importers of steel and aluminum products that were subject to the original Section 232 tariffs should consult with their legal counsel and customs brokers immediately. There may be avenues to file protests or other claims to seek refunds for duties paid on these illegal tariffs. For importers of Kentucky bourbon and other American whiskeys, while the EU's retaliatory tariffs are already suspended, this ruling provides a measure of legal clarity and reinforces the importance of a rules-based international trading system. All importers are advised to continue closely monitoring trade policy developments, review their supply chain strategies for resilience against future trade disruptions, and maintain open communication with their customs compliance teams to navigate the evolving regulatory environment.