Trump's Tariff Threats: A New Frontier in His Global Trade War

Strategic Insights -

President Trump's recent threats to impose a 50% tariff on Brazil's exports to the United States, linked to that country's treatment of former President Jair Bolsonaro, have raised new legal questions about the president's powers over trade. This move marks a novel expansion of the president's use of tariffs as a tool to influence foreign policy, a strategy that has already drawn a spate of legal challenges. The president's attack on Brazil fits a broader pattern, in which he has sought to leverage the tools of commerce to assist his allies or advance an agenda unrelated to international trade.

Key Takeaways:

  • President Trump has signaled he will use the threat of steep levies to reorient trade and protect his political allies, including former President Jair Bolsonaro of Brazil.
  • The president has a history of viewing tariffs as a potent weapon for raising revenue, boosting manufacturing, and making it easier for American companies to sell their goods abroad.
  • Mr. Trump's public admonishment of Brazil's treatment of Bolsonaro has raised questions about his authority to issue tariffs in pursuit of purely political objectives, with some legal experts arguing that this could be a new frontier in his global trade war.
  • The president's tariff threats have already drawn a spate of legal challenges, including a case filed by small businesses suing the government, which argues that the tariffs are a problem because they can change at the drop of a hat and are difficult to track.
  • The president's renewed tariff threats seem to affirm the arguments of the small businesses, which were made in the case.
  • The president's primary justification for issuing tariffs under the federal economic-emergency law is to respond to a trade deficit, but his attempts to protect Bolsonaro have "nothing to do with that."
  • The White House has communicated its tariff approach only through a letter, rather than through an executive order, which has raised questions about its rationale and legal basis.
  • The Brazil letter does feel unique, as most of the tariff actions have been grounded in trade issues, according to Greta Peisch, a former trade official and partner at Wiley Rein.
  • President Trump's tariffs will be only beneficial for the economy, he claims, saying on Truth Social that the United States is "taking in Hundreds of Billions of Dollars in Tariffs."

Statistics:

  • 50%: The tariff threat faced by Brazil's exports to the United States.
  • 2022: The year in which Jair Bolsonaro faced charges of trying to orchestrate a coup and remain in power after an election defeat.
  • August 1: The date by which Brazil's exports to the United States could face a 50% tariff, according to President Trump.
  • Hundreds of Billions of Dollars: The amount of tariffs that the United States is said to be taking in, according to President Trump.
  • Dozens: The number of countries that could face higher tariffs on their exports to the United States next month, according to the president.
  • 1977: The year in which the International Emergency Economic Powers Act was passed, a law that President Trump has adopted a more expansive and contested view of.
  • 2018-2020: The years in which President Trump has imposed tariffs on over $350 billion in Chinese goods, according to the Peterson Institute for International Economics.

Sources:

  • "The New York Times", an article titled "Trump's Tariff Threats: A New Frontier in His Global Trade War"
  • International Emergency Economic Powers Act, a 1977 law passed by the US Congress.
  • Truth Social, a post made by President Trump claiming that the United States is "taking in Hundreds of Billions of Dollars in Tariffs"
  • The Peterson Institute for International Economics, a report on the US-China trade war.