President Donald Trump may have found the killer weapon to punish countries at will: by imposing tariffs on their exports to the United States. This was reported by Qazaqyia.kz citing The Guardian.
Since February, when the Supreme Court struck down tariffs imposed under the International Economic Emergency Powers Act (IEEPA), Trump has been looking for a new tool. Policy wonks have been predicting what new legal justification he would deploy.
Last Friday, Trump imposed tariffs on all countries under Section 301 of the Trade Act of 1974, arguing that trading partners unfairly undercut US companies by importing goods made with forced labor. However, this section does not provide the carte blanche Trump wants, as it is meant to retaliate against specific "acts, policies and practices" that are "unreasonable" and "burden or restrict" US companies. The strategy can be challenged in court.
The truly menacing precedent comes from Trump's decision to impose a 50% tariff on imports from Canada. The White House cites Canadian discrimination against American dairy, booze, and cars, which paradoxically arose as retaliation against Trump's original tariffs. Some observers point to Trump's threat to punish Canada for forest-fire smoke.
Trump invoked Section 338 of the Smoot-Hawley Tariff Act of 1930, which allows the president to impose tariffs on any country that puts the US "at a disadvantage compared with the commerce of any foreign country." This section was never used to impose tariffs before, only as leverage.
America's trading partners were elated in February when the Supreme Court ruled against Trump's use of IEEPA. However, the court showed deference to the president, not objecting to his spurious invocation of national emergencies. The justices merely objected to his use of the statute to impose taxes, which are the preserve of Congress.
Previously, presidents have gotten away with similar arguments. In 1975, Richard Nixon was allowed to invoke the Trading with the Enemy Act of 1917 to impose tariffs on a Japanese zipper company, though the US was not at war with Japan. Trump's lawyers cited this precedent in the Supreme Court.
After his Supreme Court loss, Trump imposed a 10% tariff on everyone by invoking Section 122 of the 1974 act, which allows tariffs to prevent balance of payments imbalances. However, such imbalances no longer exist, and Trump's own lawyers admitted the use was ridiculous.
Trump is determined to pursue his trade war, and his minions have trawled through legal statutes to restore roadblocks to trade. This poses a significant threat to global trade.