The Trump administration has gone through one trade law after another to try to find a solid legal basis for imposing the high tariffs on foreign goods desired by President Trump.
He’s about to try yet another approach.
A 10 percent global tariff that Mr. Trump imposed in February after the Supreme Court overturned his previous global tariffs is set to expire at 12:01 a.m. Friday. The administration has a new batch of tariffs ready to replace it, which could be announced as early as Thursday.
In June, the administration proposed imposing tariffs on 59 countries and all 27 countries of the European Union, citing their failure to pass or enforce laws barring products made using forced labor from entering their countries. These tariffs would be issued under Section 301 of the Commerce Act of 1974 and set between 10 and 12.5 percent. They would apply to countries supplying more than 99 percent of U.S. imports – recreating the expiring 10 percent global tariffs.
Other tasks will probably come later. The administration has proposed another round of tariffs, also under Section 301, on 15 countries and the European Union to compensate for what the White House says are unfair practices in their manufacturing sectors.
The administration also turned its attention to another obscure trade law earlier this week, when Mr. Trump signed orders imposing 50% tariffs on billions of dollars of Canadian exports. The law, the Tariff Act of 1930, also known as the Smoot-Hawley Tariff Act, was written by Congress to protect American businesses at the start of the Great Depression, although many historians believe it actually made the crisis worse. The provision in Section 338 of the law that the administration used this week has never been used to impose tariffs.
Mr. Trump has long argued that U.S. tariffs on imports were unfairly low, and he came to power intent on transforming that system. But his efforts have been met with numerous stops, starts and setbacks, reflecting the fact that a president’s legal authority over tariff policy is, in some ways, limited.
The Constitution gives power over trade to Congress, but lawmakers have written numerous laws allowing the president to impose tariffs in certain circumstances. But generally, these laws are designed to help the president combat unfair trade practices in certain countries or industries, not to replace the U.S. tariff system altogether.
Peter Harrell, a visiting scholar at Georgetown Law School, said Mr. Trump was using Section 301, a law designed to push another country to fight an unfair trade practice, to try to impose “perpetual tariffs on almost all imports.”
“Trump is very clearly pushing to use laws that Congress intended to resolve separate trade disputes with individual countries to fundamentally rewrite the U.S. tariff regime, which is not what Congress intended to do with these laws,” he said.
The Supreme Court struck down one of Mr. Trump’s favorite legal tools in February, when it declared his use of an international emergency law to impose tariffs illegal and ordered the refund of about $160 billion in tariff revenue. Mr. Trump used the law to announce his “Free Day” tariffs on foreign countries and to penalize Canada, Mexico and China for their real or alleged role in transporting fentanyl to the United States.
After the Supreme Court’s decision, Mr. Trump turned to Section 122 of the Trade Act of 1974 as a stopgap. The law allows presidents to impose tariffs to resolve balance of payments problems, but it comes with a 150-day deadline that expires Friday morning.
Mr. Trump’s use of Section 122 has also been the subject of legal challenges. A group of small businesses and a coalition of states each sued the administration, saying the government did not meet the law’s strict criteria. In May, a majority of judges in a federal trade court agreed, handing down Mr. Trump’s second major tariff defeat.
The administration appealed the decision, and the courts allowed the government to continue collecting the 10 percent tax on imports as the appeal progresses.
The provision the administration turns to next, Section 301, is more tried and tested. Mr. Trump used it to impose tariffs on China during his first term, and its use has survived numerous legal challenges.
But it has never been used in such a radical way, to simultaneously impose tariffs on dozens of countries. And some critics say the administration is not following the law because it is using the law as an excuse to reinstate rates it has already negotiated. While Jamieson Greer, the U.S. Trade Representative, and other U.S. officials have said they cannot prejudge the outcome of the trade investigations, administration officials have privately reassured foreign countries that their tariff rates would end up being the same as in deals negotiated last year.
Testifying before Congress on Wednesday, Mr. Greer said the administration remains committed to imposing tariffs, regardless of the legal approach.
“The specific powers used by this administration have changed, but the business strategy has not,” Mr. Greer said. “We are committed to continuing to use tariffs and negotiate deals to support the reindustrialization of our economy, protect American workers, raise their wages, and reduce our trade deficit.”
Tony Romm reports contributed.
