NEW YORK — The centerpiece of President Donald Trump’s economic policy — sweeping taxes on global imports — is under legal assault again.
Trump’s Tariffs Face New Legal Challenge
The U.S. Court of International Trade, a specialized court in New York, is hearing oral arguments Friday in an attempt to overturn the temporary tariffs Trump turned to after the Supreme Court in February struck down his preferred choice — even bigger, even more sweeping tariffs.
Last year, President Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA), declaring America’s longstanding trade deficit a national emergency and imposing double-digit worldwide taxes on imports. He interpreted the law to justify tariffs of any size, at any time and on any country.
Though, on February 20, the Supreme Court ruled that IEEPA did not authorize the use of tariffs to counter national emergencies. In response, Trump quickly announced 10% global tariffs under Section 122 of the Trade Act of 1974, which allows the president to impose tariffs of up to 15% for 150 days.
Section 122 is intended to address “fundamental international payments problems,” and a key question is whether this wording covers trade deficits. The provision is considered by some to be obsolete, as the dollar is no longer linked to gold.
Interestingly, Trump’s own Justice Department previously argued that IEEPA was needed because Section 122 did “not have any obvious application” in fighting trade deficits. The trade court itself also noted last year that Section 122 was available to counter trade deficits, rendering the IEEPA tariffs unnecessary.
Frequently Asked Questions
What law did Trump initially use to impose tariffs?
President Trump initially invoked the 1977 International Emergency Economic Powers Act (IEEPA) to impose tariffs, declaring a trade deficit a national emergency.
What is Section 122 of the Trade Act of 1974?
Section 122 allows the president to impose global tariffs of up to 15% for 150 days to address “fundamental international payments problems.”
When are the Section 122 tariffs scheduled to expire?
The Section 122 tariffs are scheduled to expire around July 24, unless Congress extends the authority or the administration implements alternative tariff measures.
As the court considers the legality of these tariffs, it remains to be seen whether the current measures will be upheld, altered, or ultimately struck down, and what impact that will have on international trade.
