The Port of Alaska should resist Trump’s steel tariffs

On March 1, President Donald Trump announced a 25 percent tariff on steel. He communicated his tariff policy on the premise that other countries will get “hit with tariffs” if they don’t change their trade policies. In September, Trump justified those tariffs by saying “China is now paying us billions of dollars in tariffs.” The president’s claim that other countries pay the United States for the cost of tariffs is false. In fact, Americans pay the tariffs if they purchase or have purchased imported steel. Now it appears that Alaskans will be paying Trump’s taxes as well.

On Sept. 13, the Port of Alaska was charged $500,000 by U.S. Customs and Border Protection. The Anchorage-based port purchased steel pilings before the steel tariffs were enacted, but the federal government insists that Alaskans are still liable for paying tariffs on that steel. Port managers were in shock. The port is currently trying to move forward with a modernization program, which would be the first comprehensive rebuilding of the port since its construction in the 1950s. The $298 million cost associated with this modernization is already difficult enough for Alaskans to accommodate. Many understand the importance of the port. After all, 85 percent of all goods that Alaskans purchase in stores go through it at some point. If there’s a cost to be incurred, then it needs to be a sound investment. We do not want that investment stalled, thwarted or diminished by a ridiculous tariff imposed by Washington, D.C.

The question, then, is what we can do about it. Port managers have a few options. CBP does provide a petition for relief, but it is restricted to fees under $200,000. Fortunately, the Port of Alaska has experience with creative litigation. In 2010, an expansion project failed after critical materials were found to be improperly installed by contractors. On behalf of the port, the Municipality of Anchorage sued the private contractors and the behemoth federal agency overseeing them: the U.S. Maritime Administration. Despite these odds, Anchorage won the case and received money as restitution.

The Port of Alaska needs to file a lawsuit against CBP. At first glance, this may seem vindictive. CBP is just doing its job by enforcing presidential directives. Regardless, Anchorage attorneys do have a chance to prove wrongdoing in a court of law. When Trump signed the order to impose tariffs, it was not made clear if it would apply to steel already ordered and purchased prior to those tariffs taking effect. Sensible bureaucrats should think not. Surely a business or local entity cannot be held liable for violating a policy not yet in effect. But CBP is not piloted by sensible bureaucrats. Anchorage must expose this in court. The city does not argue that CBP is wrongful for enforcing tariffs, but it is wrongful for the misappropriation of presidential policy. It is the responsibility of CBP to interpret Trump’s vague directives in a just and equitable way to the best of their ability. Anchorage must argue that charging the Port of Alaska for steel purchased prior to the tariffs taking effect is unjust.

All good plans have a backup. If litigation fails, then the Port of Alaska should intentionally run delinquent on the fee. This is a brazen move, but it is necessary for Alaska to demonstrate its sovereignty in a federation of free states. Every time that we capitulate to federal bullying, we invite another round of it down the road.

A showdown with CBP will require patience and fortitude. Their credibility as an enforcement agency will be undermined if they cannot collect on levied fees. However, Anchorage has a strong card to play. The U.S. Department of Defense considers the Port of Alaska to be a National Strategic Seaport. This means that the DOD requires the port to maintain 48 hours readiness at all times and to support emergency situations and logistical needs. Readiness includes having available cash on hand. If CBP attempts to strong-arm Anchorage into compliance, then we need to make the case that such an action will hinder the port’s ability to support the DOD’s strategic needs. This pits one big federal agency against an even bigger one. We shouldn’t expect the DOD to necessarily intervene on our behalf, but we should recognize that this ties the hands of CBP quite a bit.

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The legal justification for the steel tariff is already on shaky ground. The U.S. Constitution vests Congress with the power to “lay and collect taxes, duties, Imposts and Excises…” Despite this, the White House cited Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs without any oversight if there is a threat to national security. The claim that steel imports directly threaten national security is unsubstantiated. It is even more absurd to penalize an Alaskan port that actually does play a role in national security. The Port of Alaska must not capitulate to this fee. If it does, then the cost will be passed onto the majority of Alaskans who rely on that critical infrastructure.

Correction: A previous version of this article stated that President Donald Trump had announced a 2 percent tariff on steel. This number has been changed to the accurate number of 25 percent. Some verbiage regarding the specific nature of the fine has also been changed to reflect the true nature of the fee.