WASHINGTON— President Donald Trump has warned that the United States will be rendered “defenseless’’ and possibly “reduced to almost Third World status’’ if Supreme Court strikes down the tariffs he imposed this year on nearly every country on earth.
The justices sounded skeptical during oral arguments Wednesday of his sweeping claims of authority to impose tariffs as he sees fit.
The truth, though, is that Trump will still have plenty of options to keep taxing imports aggressively even if the court rules against him. He can re-use tariff powers he deployed in his first term and can reach for others, including one that dates back to the Great Depression.
“It’s hard to see any pathway here where tariffs end,” said Georgetown trade law professor Kathleen Claussen. “I am pretty convinced he could rebuild the tariff landscape he has now using other authorities.”
At Wednesday’s hearing, in fact, lawyer Neal Katyal, representing small businesses suing to get the tariffs struck down, argued that Trump didn’t need the boundless authority he’s claimed to impose tariffs under 1977 International Emergency Economic Powers Act (IEEPA). That is because Congress delegated tariff power to the White House in several other statutes — though it carefully limited the ways the president could use the authority.
“Congress knows exactly how to delegate its tariff powers,’’ Katyal said.
Tariffs have become a cornerstone of Trump’s foreign policy in his second term, with double-digit “reciprocal’’ tariffs imposed on most countries, which he has justified by declaring America’s longstanding trade deficits a national emergency.
The average U.S. tariff has gone from 2.5% when Trump returned to the White House in January to 17.9%, highest since 1934, according to calculations by Yale University’s Budget Lab.
The president acted alone even though the U.S. Constitution specifically gives the power to tax – and impose tariffs – to Congress.
Still, Trump “will have other tools that can cause pain,’’ said Stratos Pahis of Brooklyn Law School. Here’s a look at some of his options:
Countering unfair trade practices
The United States has long had a handy cudgel to wallop countries it accuses of engaging in “unjustifiable,’’ “unreasonable’’ or “discriminatory’’ trade practices. That is Section 301 of the Trade Act of 1974.
And Trump has made aggressive use of it himself — especially against China. In his first term, he cited Section 301 to impose sweeping tariffs on Chinese imports in a dispute over the sharp-elbowed tactics that Beijing was using to challenge America’s technological dominance. The U.S. is also using 301 powers to counter what it calls unfair Chinese practices in the shipbuilding industry.
“You’ve had Section 301 tariffs in place against China for years,’’ said Ryan Majerus, a partner at King & Spalding and a trade official in Trump’s first administration and in Biden’s.
There are no limits on the size of Section 301 tariffs. They expire after four years but can be extended.
But the administration’s trade representative must conduct an investigation and typically hold a public hearing before imposing 301 tariffs.
John Veroneau, general counsel for the U.S. trade representative in the George W. Bush administration, said Section 301 is useful in taking on China. But it has drawbacks when it comes to dealing with the smaller countries that Trump has hammered with reciprocal tariffs.
“Undertaking dozens and dozens of 301 investigations of all of those countries is a laborious process,’’ Veroneau said.
Targeting trade deficits
In striking down Trump’s reciprocal tariffs in May, the U.S. Court of International Trade ruled that the president couldn’t use emergency powers to combat trade deficits.
That is partly because Congress had specifically given the White House limited authority to address the problem in another statute: Section 122, also of the Trade Act of 1974. That allows the president to impose tariffs of up to 15% for up to 150 days in response to unbalanced trade. The administration doesn’t even have to conduct an investigation beforehand.
But Section 122 authority has never been used to apply tariffs, and there is some uncertainty about how it would work.
