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The Court Strikes, But the Tariffs March On
The left in America is celebrating the Supreme Court’s ruling in Learning Resources, Inc., Et Al. v. Trump, which held that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose tariffs, as the death knell of Trump’s tariff policy — a policy which is really just one quiver, albeit an important one, in Trump’s broader geoeconomic strategy. But the celebration will be short-lived. As Justice Kavanaugh pointed out in his dissent, and as Inu Manuk of the Council on Foreign Relations explains, there are at least four other federal laws that President Trump can use to impose tariffs.
Trump has already used one of them in the aftermath of the Supreme Court’s decision: Section 122 of the Trade Act of 1974. That act, Manuk notes, authorizes the president to impose tariffs or import quotas to respond to “large and serious” balance of payments deficits. The White House announced on Feb. 20 that pursuant to that act, the president “imposes, for a period of 150 days, a 10 percent ad valorem import duty on articles imported into the United States.” That tariff takes effect, according to the White House, on Feb. 24. The president’s executive order excepts certain items, such as critical minerals, energy products, some agricultural products, pharmaceuticals, some electronics, passenger vehicles, some aerospace products, and informational materials.
In the end, the Supreme Court’s decision will have little long-term impact on Trump’s America First geoeconomic policies.
“Tariffs,” according to the White House, “will continue to be a critical tool in President Trump’s toolbox for protecting American businesses and workers, reshoring domestic production, lowering costs, and raising wages.” Trump has since raised the tariff to 15 percent. Manuk notes that tariffs under Section 122 of the 1974 Trade Act expire after 150 days unless Congress extends them. (RELATED: The Productivity Boom Economists Didn’t See Coming)
Trump can also turn to Section 232 of the Trade Expansion Act of 1962, which authorizes the president to impose tariffs for national security purposes. Trump has already used this act to impose some tariffs (on steel, trucks, buses, lumber, copper, cars, and wood products), which, Manuk explains, unlike Section 122 tariffs, have “no cap on the tariff rate” and can be imposed “following an investigation and recommendations by the secretary of commerce.” Congress can end such tariffs by formal resolution, but, as Manuk writes, this has rarely happened.
Another statute that Trump has used against China, and can use against other countries, is Section 301 of the 1974 Trade Act. To impose such tariffs, Manuk writes, Trump needs to conduct investigations and make findings related to unfair trade practices by other nations — not a heavy lift. The Biden administration continued the tariffs imposed on China by Trump under the authority of this law. (RELATED: While Canada Cozies Up to China, Mexico Imposes Harsh Tariffs Due to Chinese Auto Dumping)
Finally, Trump can use Section 338 of the Tariff Act of 1930, which authorizes the president to impose tariffs on countries that discriminate against U.S. trade after the International Trade Commission makes a “finding” to support that determination. Manuk notes that this statute has never been used by any president, but it remains on the books.
In his dissent in Learning Resources, Inc. v. Trump, which was joined by Justices Thomas and Alito, Justice Kavanaugh reviewed the lengthy history of Congressional authorizations for presidents to impose tariffs and embargoes on other countries, citing instances in 1810, 1890, 1922, and noting Section 338 of the Tariff Act of 1930, Section 232 of the Trade Expansion Act of 1962, Sections 122, 201, and 301 of the Trade Act of 1974.
Indeed, Justice Kavanaugh noted the “nonsensical” result of the Court’s majority ruling that under the IEEPA, the president can impose a total embargo on imports from a foreign country, but cannot impose tariffs on that same country. And, as Justice Thomas noted in a separate dissent, the Court’s majority somehow excludes tariffs from the authority to “regulate importation.”
In the end, the Supreme Court’s decision will have little long-term impact on Trump’s America First geoeconomic policies. The president, who is not bashful about using his Article II powers, will most likely continue to use other laws to impose tariffs for the purpose of protecting American manufacturing, American workers, and the nation’s economic and geopolitical security. Those tariffs, too, will be challenged in the courts, but in the meantime, geoeconomic policy will be made by the Executive — not the Judicial — branch of government.
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