While the U.S. Supreme Court struck down his sweeping import tariffs, President Donald Trump still has options to continue imposing tough import taxes.
Tariffs were the cornerstone of Trump’s foreign and economic policy in his second term, with double-digit “reciprocal” tariffs imposed on most countries, which he justified by declaring the long-standing US trade deficit a national emergency.
The nine-justice Supreme Court panel was not convinced by Trump’s sweeping claims about the authority to impose tariffs as he sees fit. Ruling was issued 6-3 against them. The Supreme Court said the order was illegal because the president acted alone, even though the US Constitution specifically gives Congress the power to impose taxes and impose tariffs.
But that doesn’t mean the Republican doesn’t have other options on which to base his tariff policy. He could reuse the tariff powers he deployed in his first term and extend other powers, including those dating back to the Great Depression.
Now that he has The IEEPA option is gone, here are Trump’s other options:
Donald Trump’s tariff options after court ruling
- Combating unfair trade practices: The United States has long used an easy cudgel to attack countries it accuses of engaging in “unjustified,” “unreasonable,” or “discriminatory” trade practices. This is Section 301 of the Trade Act of 1974.
Donald Trump himself has previously used it aggressively – especially against China. In his first term, he invoked Section 301 to impose sweeping tariffs on Chinese imports in a dispute over aggressive tactics Beijing has been using to challenge US technological dominance. The United States is also using 301 powers to counter what it calls unfair Chinese practices in the shipbuilding industry. There are no limits on the size of Section 301 definitions. They expire after four years but can be extended.
But the administration’s trade representative must conduct an investigation and usually hold a public hearing before imposing Section 301 tariffs. Experts said Section 301 is useful in dealing with China. But it has its drawbacks when dealing with smaller countries on which Trump imposed reciprocal tariffs.
- Targeting the trade deficit: The US Congress specifically gave the White House limited authority to address the problem in another law, Section 122 of the Trade Act of 1974. This allows the president to impose tariffs of up to 15% for up to 150 days in response to a trade imbalance. The administration does not even have to conduct an investigation beforehand. But the Section 122 power has never been used to enforce the definitions, and there is some uncertainty about how it will work.
- Protecting national security: Donald Trump has aggressively used his authority under Section 232 of the Trade Expansion Act of 1962 to impose tariffs on imports he considers to be a threat to national security during his current and previous terms. He imposed tariffs on foreign steel and aluminum in 2018, tariffs he has expanded since returning to the White House. Article 232 also imposed tariffs on automobiles, automobile parts, copper, and wood. In September, the Republican president imposed Section 232 tariffs on kitchen cabinets, bathroom countertops and upholstered furniture.
Section 232 definitions are not subject to law, but require investigation by the U.S. Department of Commerce. It is the department itself that is investigating – this also applies to Section 301 cases, so it has a great deal of control over the outcome.
- Reviving Depression Era Definitions: Nearly a century ago, in the midst of the collapse of the United States and world economies, Congress passed the Tariff Act of 1930, which imposed massive tariffs on imports. These tariffs, known as the Smoot-Hawley tariffs (to their sponsors in Congress), were widely condemned by economists and historians for reducing global trade and worsening the Great Depression. They also received a memorable pop culture tribute in the 1986 film Ferris Bueller’s Day Off.
Section 338 of the law allows the president to impose tariffs of up to 50 percent on imports from countries that discriminate against American companies. No investigation is necessary, and there is no limit to how long the tariffs can remain in effect.
These tariffs were never imposed — US trade negotiators traditionally preferred Section 301 sanctions instead — although the United States used the threat of them as a bargaining chip in trade talks in the 1930s.
US Treasury Secretary Scott Besent told Reuters in September last year that the administration was considering Section 338 as an alternative plan if the Supreme Court ruled against Trump’s use of emergency powers definitions.
