Trump's Tariffs Face Legal Headwinds as He Contemplates New Trade Tools

U.S. President Donald Trump's tariffs are under scrutiny from the courts, but the White House is exploring alternative ways to realign global trade. A federal appeals court is still deciding whether to impose a stay on Trump's global tariffs enacted under the International Emergency Economic Powers Act of 1977. The U.S. Court of International Trade previously ruled the duties were unlawful, finding that Trump had exceeded his presidential powers by using IEEPA to broadly implement tariffs. As the Trump administration appeals the decision, it is considering other trade laws, including Section 338 of the Tariff Act of 1930, which allows tariffs of up to 50% on countries that treat U.S. products unfavorably.

Key Takeaways:

• The U.S. Court of International Trade ruled Trump's global tariffs under the International Emergency Economic Powers Act of 1977 were unlawful, citing excessive use of presidential powers.
• The Trump administration appealed the decision and is considering alternative trade laws, including Section 338 of the Tariff Act of 1930, which allows up to 50% tariffs on countries that treat U.S. products unfavorably.
• Trump may also look to Section 301 of the Trade Act of 1974, which requires country-by-country investigations and public comment periods before imposing tariffs.
• Section 122 of the Trade Act of 1974, another law being considered, allows up to 15% tariffs to address balance-of-payments deficits, but these duties can only last 150 days without Congressional approval.
• Trump's strategy may be undermined by the limited duration of Section 122 tariffs, potentially reducing his leverage in trade negotiations.
• Trump has also suggested tariffs will help pay down the U.S. deficit, but Section 122 is unlikely to work as a long-term revenue strategy.

Statistics:

• Up to 50% tariffs can be imposed under Section 338 of the Tariff Act of 1930.
• Tariffs under Section 301 of the Trade Act of 1974 can take weeks or months to implement, involving country-by-country investigations and public comment periods.
• Up to 15% tariffs can be imposed under Section 122 of the Trade Act of 1974, but these duties can only last 150 days without Congressional approval.
• The U.S. Court of International Trade has previously ruled Trump's global tariffs unlawful, citing excessive use of presidential powers under IEEPA.

Sources:

• The Canadian Press
• Kelly Geraldine Malone, The Canadian Press
• Greta Peisch, former general counsel for the Office of the U.S. Trade Representative