US President-elect Donald Trump appears ready to once again turn to one of his favorite legal tools to back up threats to impose tariffs on imports from Mexico, Canada and China: the International Emergency Economic Powers Act ( IEEPA, one of several legal options to implement its tariff agenda.
This week, Trump launched his first trade-related attack of his second term, eight weeks before taking office, threatening to impose 25% tariffs on goods from Mexico and Canada, and additional 10% tariffs on products Chinese. This is in order to pressure these countries to reduce the flow of the deadly opioid fentanyl and illegal immigration to the United States.
Trade lawyers and other experts say Trump has enough authority to act quickly without congressional approval. These are the key tools it could use to advance its broad tariff agenda:
International Emergency Economic Powers Act
Trump could declare a national emergency due to the fentanyl crisis and the situation on the US southern border, which would activate the use of this law enacted in 1977 and updated in 2001 to allow the imposition of tariffs or financial sanctions.
During his first term, Trump invoked this law on several occasions, including a threat to impose a 5% tariff on Mexican goods. He withdrew the threat after Mexico promised to deploy security forces to stem the flow of illegal immigrants.
Read: Trump’s tariff threats unleash chaos and leave the USMCA on the verge of breaking up
The then-Republican president also claimed that the law gave him the authority to “order” American companies to leave China, and toward the end of his term in August 2020, he again used the IEEPA in an attempt to ban the video platform. Chinese TikTok.
Congress can revoke the use of this law by passing a joint statement of disapproval. However, “that’s a tall order, especially with a Republican Congress at the start of Trump’s term,” said Stephen Kho, a trade lawyer at Akin Gump and former China trade compliance adviser at the Office of the US Trade Representative.
Courts have generally upheld challenges to this law and its predecessor, the Trading with the Enemy Act of 1917, which then-President Richard Nixon invoked in 1971 to impose an additional 10% tariff on all U.S. imports in an effort to resolve a payments crisis and pressure Germany and Japan to revalue their currencies against the dollar.
Section 232, Trade Expansion Act of 1962
Trump has proposed blanket tariffs of 10% to 20% on all U.S. imports. Like Nixon, he could invoke the IEEPA for this, but he would face a higher standard when defining an “unusual and extraordinary threat” to national security, foreign policy, or the economy.
Experts also believe Trump could again turn to the Cold War-era Section 232 statute to support broader tariffs, but this would require a new investigation that could take months to complete.
Read: Trump makes a high-risk bet on tariffs as a means to curb fentanyl
Trump invoked Section 232 to impose tariffs of 25% on global steel imports and 10% on aluminum in 2018, but negotiated waivers for Canada and Mexico a year after they removed their retaliatory tariffs on pork, beef beef, bourbon and other American products.
Section 301, Trade Act of 1974
Trump is likely to again turn to Section 301, the basis of his 2018-2020 trade war against China, to expand his tariffs on Chinese imports. This law allows the United States to retaliate against unfair trade practices by its partners and was used to impose tariffs of up to 25% on $370 billion worth of Chinese goods, from semiconductors to machinery and toys, after a investigation by the Office of the Trade Representative found that China was misappropriating US intellectual property and coercing the transfer of US technology to Chinese companies.
Newly nominated US Trade Representative Jamieson Greer could modify existing Section 301 findings to justify new tariffs on Chinese goods, as current Representative Katherine Tai did to support Joe Biden’s higher tariffs on electric vehicles, batteries , semiconductors and solar products.
But Greer could also launch a new Section 301 investigation into state-driven industrial overcapacity in China, a growing concern for the United States and market economies, and practices of industrial domination.
While business lawyers say there is well-documented evidence of such practices, it would likely take several months for a new Section 301 investigation to be completed, given the need for public comment periods and hearings.
Section 122, Trade Act of 1974
Trump could invoke this section to impose an additional global tariff for 150 days to restrict imports in the event of balance of payments problems or to prevent a significant depreciation of the dollar.
Congress added this power as a result of the 10% tariff measure adopted by Nixon in 1971. But the statute limits the tariff action to 150 days, unless Congress extends it.
Lee: After threat of tariffs, Mexico will seek dialogue to create a stronger region and not conflict: Economy
Section 338, Tariff Act of 1930
This anti-discrimination law remains in effect, although it has not appeared in public government correspondence since the late 1940s.
At that time, the United States and its trading partners agreed to “cap” global tariff rates under the postwar Comprehensive Agreement on Tariffs and Trade, predecessor to the current World Trade Organization.
It would allow Trump to impose additional tariffs of up to 50% on products from any country that discriminates against American products in a way that puts American products at a “disadvantage” compared to imports from other countries.
With information from Reuters
Follow us on Google News to always stay informed
