Trump Has Other Tariff Options         11/06 06:12

   

   WASHINGTON (AP) -- President Donald Trump has warned that the United States 
will be rendered "defenseless'' and possibly "reduced to almost Third World 
status" if the 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%, the 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.

   Protecting national security

   In both of his terms, Trump has made aggressive use of his power -- under 
Section 232 of Trade Expansion Act of 1962 -- to impose tariffs on imports that 
he deems a threat to national security.

   In 2018, he slapped tariffs on foreign steel and aluminum, levies he's 
expanded since returning to the White House. He also plastered Section 232 
tariffs on autos, auto parts, copper, lumber.

   In September, the president even levied Section 232 tariffs on kitchen 
cabinets, bathroom vanities and upholstered furniture. "Even though people 
might roll their eyes" at the notion that imported furniture poses a threat to 
national security, Veroneau said, "it's difficult to get courts to second-guess 
a determination by a president on a national security matter."

   Section 232 tariffs are not limited by law but do require an investigation 
by the U.S. Commerce Department. It's the administration itself that does the 
investigating -- also true for Section 301 cases -- "so they have a lot of 
control over the outcome," Veroneau said.

   Reviving Depression-era tariffs

   Nearly a century ago, with the U.S. and world economies in collapse, 
Congress passed the Tariff Act of 1930, imposing hefty taxes on imports. Known 
as the Smoot-Hawley tariffs (for their congressional sponsors), these levies 
have been widely condemned by economists and historians for limiting world 
commerce and making the Great Depression worse. They also got a memorable pop 
culture shoutout in the 1986 movie "Ferris Bueller's Day Off."

   Section 338 of the law authorizes the president to impose tariffs of up to 
50% on imports from countries that have discriminated against U.S. businesses. 
No investigation is required, and there's no limit on how long the tariffs can 
stay in place.

   Those tariffs have never been imposed -- U.S. trade negotiators 
traditionally have favored Section 301 sanctions instead -- though the United 
States used the threat of them as a bargaining chip in trade talks in the 1930s.

   In September, Treasury Secretary Scott Bessent told Reuters that the 
administration was considering Section 338 as a Plan B if the Supreme Court 
ruled against Trump's use of emergency powers tariffs.

   The Smoot-Hawley legislation has a bad reputation, Veroneau said, but Trump 
might find it appealing. "To be the first president to ever use it could have 
some cache."