It’s a big deal for the Trump administration’s trade agenda, but there are other tariff-raising authorities that President Trump has used.
The United States Supreme Court on Thursday announced it will hear arguments regarding the legality underpinning some of the Trump administration’s tariffs on November 5.
At issue is President Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA), which has been challenged in a lawsuit brought by a half dozen businesses and another dozen states. The president first invoked IEEPA in February to announce tariffs on imports from China, Canada and Mexico, citing a national emergency associated with the flow of fentanyl and its precursor chemicals being smuggled over the border.
The president invoked the statute again in April when he announced a 10% global baseline tariff and higher “reciprocal” rates for dozens of other countries. The declaration cited large and persistent U.S. trade deficits as an “unusual and extraordinary threat” to national and economic security, driven by nonreciprocal trade practices such as high foreign tariffs, non-tariff barriers, currency manipulation, and value-added taxes imposed by trading partners. Earlier this year, AAM argued that trade deficits merit a strong response and that all available tools should be used to address these lopsided imbalances that negatively affect workers and our broader economy.
The tariffs aimed to promote reciprocity, reduce trade deficits, and re-shore American production. And those higher rates kickstarted bilateral trade negotiations with many countries, including Indonesia, Vietnam, the United Kingdom, Japan, South Korea and India. Some deals have been struck; other talks are ongoing.
Various lawsuits challenging the IEEPA tariffs have been winding their way through the judicial system. A federal appeals court last month affirmed a lower court ruling that the use of IEEPA to raise tariffs was unlawful and exceeded presidential power, after which the administration immediately asked the Supreme Court to weigh in. Now the court date is set, and the outcome will be consequential for the White House’s trade agenda and ongoing negotiations with various countries.
But, importantly, the ruling will not affect all trade actions since January.
That’s because IEEPA is not the statutory authority underpinning all of them. For instance, there are tariffs on a range of Chinese imports that were first applied by Trump in his first term and were extended and expanded by President Biden. Those fall under Section 301 of the Trade Act of 1974. The results of another, sector-specific Section 301 case – this one focused on China’s unfair domination of the global shipbuilding industry – are playing out right now: The Trump administration has port fees for Chinese-made oceangoing vessels scheduled to take effect next month, and there’s bipartisan legislation before the U.S. Congress that would funnel the collected revenue into revitalizing the domestic commercial shipbuilding industry.
None of these Section 301 actions are in question before the court. The same is true of actions put into place using Section 232 of the Trade Expansion Act of 1962, which allows the president to raise tariffs on national security grounds. Trump first used them in 2018 to shore up the besieged domestic steel and aluminum industries. Since returning to office he has used presidential Section 232 authority to announce tariffs on automobiles, auto parts and certain copper imports, as well as 232 investigations into imported semiconductors, pharmaceuticals, and lumber, among other product categories.
These tariffs are not at risk of being struck down by the Supreme Court as part of the IEEPA cases.
And that’s the big takeaway: If the justices rule against President Trump’s use of IEEPA to underpin his use of tariffs, it would certainly throw a wrench in his administration’s trade agenda. But it won’t affect all of it.