Circumventing the US Supreme Court, US President Donald Trump might have found a way to resurrect his tariff wall in a fashion that analysts say could prove more durable to legal challenges.
Last week, Trump slapped sweeping new tariffs on 60 trading partners and saw 25-percent duties take effect on Brazilian products. Both cases involved an authority that has been used to impose levies before.
Trump separately tapped an untested justification for 50-percent tariffs on many Canadian goods.
Photo: AFP
The actions and threats “underscore the president’s continued affection for tariffs, and that they are not going away as long as he is in the White House,” Asia Society Policy Institute senior vice president Wendy Cutler said.
Trump’s latest tariffs of 10 percent to 12.5 percent apply to goods from 60 economies beginning on Friday. They came after probes over forced labor concerns, under Section 301 of the Trade Act of 1974.
Cutler said this has a lower likelihood of being overridden by courts, saying Trump’s top trade official Jamieson Greer had carefully navigated procedural requirements before imposing duties.
More concerning was Trump’s targeting of Canada using the untested Section 338 of the Tariff Act of 1930, Atlantic Council international economics chair Josh Lipsky said.
The justification was Canada’s alleged discriminatory treatment of US exports, with duties effective after a month.
“That’s more tariff-as-punishment” and could signal that Washington intends to keep less conventional tools at its disposal, Lipsky said.
It is an “uncertainty generator,” Cato Institute economist Scott Lincicome said.
Trump’s newest tariffs already face legal challenges from small businesses.
As courts have earlier allowed the use of Section 301 for imposing duties, arguments against Trump’s latest salvo would likely focus on official findings that justified action, Lincicome said.
“That’s just not something that courts typically want to weigh in on,” he added.
Some said that Trump lacks such broad powers to impose sweeping tariffs.
Within months of returning to the presidency, Trump unleashed a barrage of tariffs on US trading partners.
He invoked emergency economic powers to impose a swath of these duties quickly, a move deemed illegal by the high court in February.
Trump’s sector-specific tariffs, imposed under different legal authorities on steel, automobiles and other goods, are unaffected.
Officials have launched Section 301 investigations, including on forced labor, to reinstate duties.
However, Lincicome said that past investigations were more substantive. A probe into China during Trump’s first term took a year to result in duties.
This time, probes into 60 economies including major partners such as the EU and India spanned just four months.
US tariffs are tough to undo. Former president Joe Biden, the Democrat who succeeded Trump after his first term, kept his predecessor’s tariffs on China intact.
Even if a future leader wanted to reverse Trump’s duties, revenue considerations would complicate the situation, Lipsky said.
Many countries were likely hoping the worst of trade conflict was behind them, he said, but some might have doubts.
The Trump administration has struck 19 framework or reciprocal tariff deals. Yet, threats of new duties loom with Washington investigating 16 economies including China, the EU and Japan over excess industrial capacity.
“The administration has been careful not to exceed the tariff levels agreed to in bilateral agreements,” Cutler said. “But partners are concerned that this assurance may not hold.”
Peterson Institute for International Economics senior fellow Chad Bown believes Trump is missing a chance to address bigger problems such as China’s rare earth export curbs.
Trading partners have to “fight a two-front trade war — dealing with Trump’s tariffs and China’s export restrictions — instead of just being able to focus on China,” he said.
While countries have expressed disappointment, Cutler said, there are no signs of retaliation, “knowing full well they would risk further US tariff escalation.”
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