Trump Says He Will Reimpose Tariffs. Here's How He Could Do It

In a major setback for US President Donald Trump, the Supreme Court on Friday struck down sweeping tariffs imposed by his administration, ruling that the president had exceeded his authority by using emergency powers meant for national crises. The court said Trump relied on a law designed for national emergencies to justify broad trade tariffs, which judges concluded went beyond presidential powers.

However, the ruling may not mark the end of Trump's tariff agenda. In his first remarks after the ruling, Trump said, "Today I will sign an order to impose a 10% global tariff under Section 122, over and above our normal tariffs already being charged and we're also initiating several Section 301 and other investigations to protect our country from unfair trading practices of other countries and companies."

Section 122 of the Trade Act of 1974 is the fastest temporary option available for Trump. It allows tariffs of up to 15 per cent to address a large and serious balance-of-payments deficit. However, the authority lasts only 150 days unless Congress approves an extension. This could be a short-term solution till Trump administration finds a more permanent loophole.

One other law Trump can use is Section 232 of the Trade Expansion Act of 1962. This provision allows tariffs if imports are deemed a threat to national security. Trump previously used this law to impose tariffs on steel and aluminium during his first presidency. Unlike the tariffs struck down by the court, trade duties under Section 232 remain legally intact.
To impose duties under this provision, a Commerce Department investigation is required, which can last for up to 270 days but offers a more durable legal foundation.

Another provision at Trump's disposal is Section 301 of the Trade Act of 1974, which allows the United States to target countries accused of unfair trade practices. This law has often been used against China and permits tariffs that can remain in place indefinitely following an investigation by the US Trade Representative. 

A never-used-before option, Section 338 of the Tariff Act of 1930, allows tariffs of up to 50 per cent against countries seen as discriminating against American goods. No investigation is required, and there's no limit on how long the tariffs can stay in place. Trump officials in past have indicated that they will use this provision in case of a setback at the US Supreme Court.

Besides these provisions, officials have also discussed a workaround involving import licenses. This will require importers to obtain licences carrying fees to bring goods into the United States.

This possibility was also discussed during oral arguments of the Trump tariff case. But it was implied that if licensing fees function like taxes, they could again be ruled unconstitutional because taxation powers belong to Congress.

Why Did Supreme Court Strike Down Trump Tariffs?

The administration had imposed tariffs under the International Emergency Economic Powers Act (IEEPA), a law used during extraordinary national emergencies. The Supreme Court ruled that the use of this law to impose wide-ranging trade tariffs was an overreach of executive authority.

Despite the setback, the White House had anticipated the ruling. US Trade Representative Jamieson Greer told The New York Times last month that officials were ready to act quickly if the court ruled against them. We will "start the next day", to reestablish tariffs "to respond to the problems the president has identified," Greer said.

He added that advisers had already presented multiple legal options to achieve Trump's trade goals. "The reality is the president is going to have tariffs as part of his trade policy going forward," Greer said.

Still, it remains unclear how fast new tariffs could be implemented.