At 12:01 a.m. Eastern time on Friday morning, a global 10% tariff that President Trump installed after the Supreme Court struck down his first wave of import taxes expired. Timed to the same minute, a replacement set took effect: two tiers, of 10 and 12.5%, on goods from the 60 biggest trading partners of the United States.
The fight began with a 1977 statute. The International Emergency Economic Powers Act, passed to curb the emergency economic powers presidents had held under the Trading with the Enemy Act of 1917, lets a president regulate financial transactions once he declares a national emergency over an “unusual and extraordinary threat” from abroad. Richard Nixon used the precursor law for a brief 10 percent tariff in 1971. No president had ever used IEEPA itself to tax imports, according to a Congressional Research Service report, and legal experts had warned that stretching it that far invited court challenges.
Trump did it anyway. He declared an emergency over what he called a large and persistent trade deficit and used the law to hit dozens of countries with tariffs, including close allies, and separately to levy Mexico, Canada and China over migration and fentanyl. A federal appeals court ruled the tariffs exceeded any authority the statute grants, and the nation’s highest court agreed.
“Other alternatives will now be used to replace the ones that the court incorrectly rejected,” Trump said at a White House briefing on Feb. 20. “We have alternatives, great alternatives.”
New laws, new justifications
The replacement levies rest on a statute aimed at unfair trade practices, and the administration’s stated reason is forced labor. The 59 countries plus the European Union covered by the tiers account for more than 99% of goods entering the country, according to the trade representative’s office, though energy and many categories of food are exempt. A senior official, speaking on condition of anonymity, said the switch was timed to the minute to spare businesses extra complexity.
A trade representative fact sheet cast the move as leadership. “The United States is the only country in the world to adopt, and effectively enforce, a ban on imports made with forced labor,” it read. Senator Ron Wyden of Oregon saw it differently at a hearing where Trade Ambassador Jamieson Greer testified. “Donald Trump dug up a zombie law to make things even more expensive for Americans,” Wyden said, arguing the White House was reconstructing its illegal global tariffs under the guise of forced-labor enforcement.
The speed is gone, though. Where IEEPA let the president act alone and fast, the forced-labor tariffs follow a months-long investigation, and tariffs on aluminum, lumber or semiconductors each need an investigation first. Trump moved fast only on Canada, signing proclamations for 50% tariffs on some Canadian goods under a 1930 statute never before used to impose tariffs.
A patchwork with a clock
The statutes now in play carry three-digit names, 122, 338, 232 and 301, and importers are struggling to map how they stack against one another. Kathleen Claussen, who teaches trade law at Georgetown, described the view from the ground: “It has created a much more complex landscape with all of the three-digits going at once and having to figure out: do they add, how does one fit with the other, what are the exceptions?”
More may be coming. A Section 301 investigation covers more than a dozen countries plus the EU, and floated pharmaceutical tariffs would not bite for two years. Poll after poll shows Americans souring on import taxes, and manufacturing employment is still lower than on the day Trump took office.
Greer’s defense to senators was patience. “The problems the president’s trade policy seeks to solve are generational,” he said. “These things were not broken in the day, and they won’t be fixed overnight. But they must be fixed.”
Sources
- A defiant Trump imposes replacement tariffs on biggest US trading partners – OPB
- What Is IEEPA, the Law Trump Used to Impose Tariffs? – The New York Times
