U.S. President Donald Trump is pushing a strong reciprocal tariff policy as he enters his second term, but a legal halt has hit the International Emergency Economic Powers Act (IEEPA), which he had regarded as a key rationale. However, as President Trump has secured numerous other legal mechanisms delegated by Congress, predictions suggest that the 'tariff war' will not easily subside.
On the 29th of last month, the U.S. Court of Appeals for the Federal Circuit ruled that the reciprocal tariff measures imposed by President Trump based on the IEEPA were illegal. The IEEPA enables the president to impose economic sanctions on a foreign country in the event of an 'unusual and extraordinary threat' to national security. It was enacted in 1977 and has previously been used by the United States to sanction countries such as Iraq, Russia, and North Korea.
The Trump administration has been implementing reciprocal tariffs on major trading partners based on the IEEPA. However, the International Trade Court unanimously ruled in May that tariffs based on the IEEPA were illegal, and the appellate court reaffirmed this decision. Under this ruling, the current tariffs will remain in place until October 14, and since President Trump has indicated his intention to appeal, the final conclusion is expected to be made by the Supreme Court.
Even if the Supreme Court rules that the Trump administration's tariff policy is illegal, it is widely anticipated that the current tariff measures will be maintained. This is because there are provisions in the Trade Expansion Act, apart from the IEEPA, that President Trump can use to uphold the reciprocal tariffs. While these provisions, about five in total, impose procedural requirements before activation, they can provide legitimacy for regulations targeting specific industries or countries.
A prominent provision is Section 232 of the Trade Expansion Act. This provision permits the president to impose tariffs on certain items for 'national security threats.' President Trump has utilized this to impose high tariffs on ▲steel ▲aluminum ▲automobiles ▲copper products, and the Department of Commerce is currently conducting pre-imposition investigations on industries such as ▲semiconductors ▲pharmaceuticals ▲wind turbines.
Section 201 is also mentioned as a card for imposing tariffs. This provision allows tariffs to be levied after an investigation by the International Trade Commission (ITC) if the U.S. manufacturing industry suffers serious damage due to an increase in imports. President Trump previously relied on this provision to impose tariffs on solar modules and washing machines in 2018. However, this provision is regarded as suitable for imposing regulations focused on industries rather than specific countries.
Section 301 allows for the imposition of tariffs in response to unfair trade practices or violations of international agreements by foreign countries, which can be activated following an investigation by the Office of the United States Trade Representative (USTR) and feedback from the public. President Trump imposed tariffs on Chinese imported goods through this provision in 2018, and this has remained in effect. In July, the USTR initiated investigations into ▲trade and intellectual property ▲deforestation ▲the ethanol market concerning Brazil.
Additionally, Section 122 is mentioned, which allows for the imposition of a 15% tariff for a maximum of 150 days to prevent a large international balance of payments deficit or a sharp decline in the value of the dollar. Although there has been no precedent for its application, it is a measure that can be extended with congressional approval. Moreover, Section 338 of the Smoot-Hawley Tariff Act, enacted in 1930, permits retaliatory tariffs if a specific country takes discriminatory action against the United States, although there is no precedent for its use, there is still the possibility that President Trump may utilize it.
Ted Murphy, a lawyer specializing in global trade, noted, "The IEEPA can be enacted immediately without hearings or reports, making it a priority for President Trump. However, other provisions require complex processes for activation, but they can serve as a basis for imposing tariffs in the future."