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US President Donald Trump’s aggressive implementation of country-specific tariffs will face scrutiny from the Supreme Court next month.
At stake would be Trump’s broad use of the International Emergency Economic Powers Act to impose widespread tariffs. Two federal courts have already ruled such practices illegal, prompting the Trump administration to seek appeals, including asking the Supreme Court to hear the cases. The Supreme Court is scheduled to hear the arguments in November.
The administration has argued that the president’s use of IEEPA to impose tariffs is justified by Trump’s declared national emergency related to the trade deficit and fentanyl trafficking. More broadly, the government contends that because Congress enacted the IEEPA, it has oversight authority, not the courts.
Through its interpretation of the IEEPA, the Trump administration has been able to impose tariffs on a wide range of US trading partners without additional bureaucratic machinations. The government has also cited IEEE Increasing previously approved tariffs, such as 50 percent combined tariffs on Indian imports.
“I think part of the appeal of IEEPA was that there was no reporting,” said Alexander Shafer, a partner in the international trade group at law firm Crowell & Mooring. There are no findings to be made. The president declares a state of emergency and then says, “Here’s what we’re going to do about it,” without any red tape to go through.
The Trump administration has not relied solely on the IEEPA to advance its tariff regime, and regardless of the Supreme Court’s decision, the president retains multiple tools to continue the tariffs. Here’s a look at some of these mechanisms and how the Trump administration is using them.
Article 232
Along with the IEEPA tariffs, the Trump administration has also relied heavily on Section 232 of the Trade Expansion Act of 1962 to impose tariffs and initiate investigations into specific sectors.
“I think part of the appeal of IEEPA was that there was no reporting.”
Alexander Shafer
Partner, International Business Group, Crowell & Mooring
Through Section 232, Trump has imposed 50 percent tariffs on steel and aluminum imports, 25 percent tariffs on autos and auto parts, and most recently a series of tariffs on furniture and other wood products. These charges are due to Section 232 reviews that must be completed before tariffs are applied. The Trump administration is conducting several other Section 232 investigations, including the Semiconductors, Pharmacy and Vital minerals.
“One of the reasons why there are so many launches [Section] “The 232 investigation is because the backstop is already underway because Section 232 was upheld by the Court of International Trade and the Court of Appeals for the Federal Circuit in connection with the first Trump administration’s steel and aluminum tariffs.”
Goods subject to current Section 232 investigations account for roughly 40 percent of U.S. trade, Husisian said, meaning the potential impact of tariffs based on such an investigation would be significant in itself even if Trump were to stop using IEEPA.
Section 301
Another tool that Trump has used in both of his terms to impose tariffs is Section 301 of the Trade Act of 1974. Through this mechanism, the Office of the US Trade Representative conducts reviews every 12 to 18 months to determine whether tariffs or other measures may be needed to combat unfair trade practices by certain countries.
During his first term in office, Trump used Section 301 to impose tariffs on imports from China. Former President Joe Biden later endorsed the levy, adding it to products such as electric cars, batteries and semiconductors.
Similar to Section 232, tariffs imposed through Section 301 reviews have already received judicial protection. A federal appeals court in September upheld Trump’s use of Section 301 to impose tariffs during his first term in office.
Given such a track record for Section 232 and Section 301, there is reason to believe that the Trump administration will be more aggressive in pursuing such avenues for new tariffs.
“I think initially I would expect to see more reliance on Sections 232 and 301,” said Kelsey Christensen, an international trade attorney at Clark Hill.
Article 338
Another potential tool the Trump administration could use is Section 338 of the Tariff Act of 1930. The law allows tariffs of up to 50 percent to be imposed by presidential proclamation in response to discrimination by another country against U.S. trade. The President also has the power to cancel and amend any tariffs imposed.
However, according to Shaffer, the substance has not been used since the 1940s and could face a WTO backlash. However, given the current lack of a WTO Appellate Body, the United States can appeal any panel review decision “to oblivion.”
President George W. Bush signs the Central American Free Trade Agreement at the White House on August 2, 2005 in Washington, DC.
Mark Wilson via Getty Images
Section 201
According to Christensen, while Section 338 authorizes broader enforcement powers, Section 201 of the Trade Act of 1974 is “a protective inquiry.”
Section 201 proceedings begin with a petition, including those directed by the state. The tool required an approximately six-month investigation by the US International Trade Commission To determine whether “material damage” is being done to a specific domestic industry, according to Shaffer.
“It’s a little bit like a dumping case, except instead of proof, what needs to be shown, in an open case, is material injury,” Schaefer said.
According to Shaffer, President George W. Bush used the tool to impose steel tariffs during his presidency. Similarly, a Section 201 petition by Harley-Davidson in the 1980s resulted in a 45 percent tariff on Japanese motorcycles.
Section 122
Section 122 of the Trade Act of 1974 gives the president the authority to quickly impose tariffs due to a trade deficit, similar to what Trump has used with IEEPA. However, this material has more rigid guardrails. According to Shaffer, the duties cannot exceed 15 percent and will expire after 150 days unless Congress approves an extension.
“Fifteen percent is not as high as some of the rates in some countries, but it’s actually the rate for a lot of countries,” Schaefer said, referring to current country-specific tolls. And so you can imagine [Trump] “By using it instead of what he’s done now.”
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