Trump Plans New Tariffs Using Different Laws After Supreme Court Ruling

The Supreme Court blocked President Trump's tariffs, but he plans to use other laws like Section 301, which has been used before. This could change trade rules.
By Newsroom | Politics, Trade |

Trump Faces Setback on Tariffs, Signals New Approach

The U.S. Supreme Court has ruled against President Donald Trump's broad use of tariffs, a key part of his economic strategy. The court decided he overstepped his authority by using a specific law to impose taxes on goods from almost every country. This decision, a significant blow to his agenda, has prompted Trump to look for alternative legal avenues to enact tariffs. He has stated his intention to proceed with new tariffs using different laws, signaling a continued commitment to this trade policy despite the legal challenges.

After Supreme Court Loss, Trump Plans to Impose Global Tariffs Using Different Laws - 1

Background of the Tariff Dispute

The Supreme Court's decision on Friday struck down tariffs that President Trump had enacted under the International Emergency Economic Powers Act (IEEPA). This law, designed for emergency situations, was interpreted by Trump's administration to allow for wide-ranging tariffs. The court's 6-3 ruling affirmed that IEEPA did not grant the president such authority for these broad tariffs, upholding a lower court's decision.

Read More: Supreme Court Stops Trump Tariffs; President Plans New 10% Tax

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  • IEEPA Tariffs: The tariffs in question were largely imposed using IEEPA. These tariffs accounted for a substantial amount of U.S. tariff revenue.

  • Supreme Court Ruling: The court found that the executive branch exceeded its legal powers by using IEEPA for these sweeping tariffs.

  • Reaction: Some within the Republican party, including those who have previously opposed Trump, have welcomed the decision as a proper reassertion of power by the legislative branch. Trump himself has reacted with strong criticism of the justices involved.

Trump's Proposed Alternatives for Tariff Implementation

Following the Supreme Court's rejection of tariffs under IEEPA, President Trump has publicly stated his intent to utilize other existing laws to impose new tariffs. He has indicated that he is already considering at least two specific legal provisions: Section 122 and Section 301.

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  • Section 301: This section has been previously used by both the Trump and Biden administrations to impose tariffs, particularly on goods from China. It allows for investigations into unfair trade practices and can result in additional duties.

  • Section 122: This section is also being considered by Trump as a legal basis for new tariffs.

  • Section 338: This is another broad legal authority that has been cited as a potential option. It was used during Trump's first term to levy duties on steel and aluminum.

  • Section 232: This provision is designed to address national security concerns related to imports and can be applied to specific sectors. It does not require an agency investigation before tariffs can be imposed.

  • Section 201: This section also provides authority for tariffs but may have specific rollout procedures that would prevent immediate implementation.

The Supreme Court's decision on the IEEPA tariffs has significant implications for both U.S. trade policy and the economy. While the ruling may have been met with approval by some segments of the stock market, it represents a substantial setback for Trump's declared economic agenda.

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  • Revenue Impact: The tariffs previously imposed under IEEPA constituted a large portion of the revenue generated from tariffs. The invalidation of these means a potential loss of this revenue stream.

  • Domestic Manufacturing: Promises made by Trump that these tariffs would revitalize U.S. manufacturing have not shown clear evidence of materializing, according to some reports.

  • Refunds: There is a question of whether billions of dollars collected through these tariffs may need to be refunded.

  • "Zombie Tariffs": The potential for "zombie tariffs" or tariffs that are constantly challenged and overturned is a possibility, especially if new tariffs are enacted through legally contested means.

Expert Perspectives

Analysts suggest that President Trump has a demonstrated willingness to leverage tariffs as a significant negotiating tool in trade relations. His administration's expansive interpretation of existing laws, as seen with IEEPA, highlights a strategic approach to trade enforcement.

  • "Trump is a true believer when it comes to using tariffs as a negotiating tactic." (NPR)

  • The Trump administration previously used Section 301 to impose tariffs, and the Biden administration has continued to use this section for specific goods from China. (The Atlantic, Bloomberg Law)

Conclusion and Next Steps

The Supreme Court's ruling has invalidated President Trump's use of the International Emergency Economic Powers Act for imposing broad tariffs. However, the president has signaled a strong intent to continue pursuing tariffs by exploring other legal authorities, including Section 122 and Section 301. This indicates a potential continuation of trade disputes and economic policy shifts as the administration seeks to implement its tariff strategy through alternative legal channels. The precise impact of these new efforts and the legal challenges they may face remain to be seen.

Read More: US Trade Office Starts New China Trade Probes in 2024 and 2025

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Frequently Asked Questions

Q: Why did the Supreme Court stop President Trump's tariffs?
The Supreme Court said President Trump used a law called IEEPA incorrectly to put tariffs on many goods. The court ruled he did not have the power to do this for such broad tariffs.
Q: What will President Trump do about tariffs now?
President Trump said he will use other laws to create new tariffs. He is looking at laws like Section 122 and Section 301.
Q: Which laws might President Trump use for new tariffs?
President Trump is thinking about using Section 122 and Section 301. Section 301 was used before for tariffs on China. Section 338 and 232 are also possible options.
Q: How could this affect the U.S. economy?
The old tariffs brought in a lot of money. Stopping them might mean less money for the government. It's unclear if this will help or hurt American factories.
Q: Could people get money back from the old tariffs?
It is possible that billions of dollars collected from the tariffs that were stopped might have to be paid back to people or companies.
Q: What does this mean for future trade?
President Trump sees tariffs as a way to negotiate. He will likely keep trying to use tariffs even with these legal challenges, which could lead to more trade changes.