US Supreme Court ruling on US tariffs

U.S. Supreme Court Decision on American Tariffs

On November 5th, the U.S. Supreme Court began hearings to examine the issue of American tariffs imposed using the emergency tool provided by the International Emergency Economic Powers Act (IEEPA)

It's by no means certain that the U.S. Supreme Court will decide to overturn the tariffs imposed by the Trump administration. And in any case, it couldn't overturn the American tariffs provided by bilateral trade agreements that the U.S. has signed in the meantime with other countries starting from last April 2nd.

The decisive legal aspect in favor of the Trump administration regarding American tariffs is related to the fact that the United States signed several trade agreements with other countries to ratify the so-called reciprocal tariffs that were imposed last April 2nd using, at the time, the tools provided by the International Emergency Economic Powers Act (IEEPA)

In practice, with the signing of trade agreements, American tariffs are no longer characterized as tariffs set under the emergency framework of the IEEPA, because they have been replaced by tariffs governed by bilateral international trade agreements. And on this type of tariffs, the U.S. Supreme Court has no jurisdiction.

Legal and Administrative Tools the Trump Administration Could Use to Reintroduce American Tariffs in Case of an Unfavorable Supreme Court Decision

Scott Bessent, U.S. Secretary of State, has also publicly stated that in the unlikely event that the U.S. Supreme Court nullifies the tariffs already in effect since August 3rd, the Trump administration would reintroduce them using other legal or administrative tools.

Let's remember that the U.S. Supreme Court decision would only concern the so-called reciprocal tariffs, those imposed under what is provided by the International Emergency Economic Powers Act (IEEPA) and would leave in effect the tariffs imposed using Section 232 of the Trade Expansion Act of 1962

Section 232 of the Trade Expansion Act of 1962
The Section 232 of the Trade Expansion Act of 1962 allows the President of the United States to limit or restrict imports that pose a threat to national security, after an investigation conducted by the Secretary of Commerce. Once the investigation is completed, the President can implement measures such as tariffs, quotas, licenses, or other appropriate restrictions to eliminate the identified threat.

Section 301 of the Trade Act of 1974
The Section 301 of the Trade Act of 1974 grants the United States Trade Representative (USTR) the authority to investigate and respond to foreign trade practices considered unfair, discriminatory, or in violation of trade agreements with the United States. Based on the findings of the investigation, the USTR can impose additional tariffs, trade restrictions, or other corrective measures against the country causing a burden on U.S. commerce, meaning harm to American commercial interests.

Section 122 of the Trade Act of 1974
The Section 122 of the Trade Act of 1974 grants the President a limited and temporary authority to impose import surcharges or quotas up to a maximum of 15%, for a duration not exceeding 150 days. This power can be exercised to address large and serious balance-of-payments deficits, meaning severe and prolonged imbalances in the United States' balance of payments.

Section 338 of the Tariff Act of 1930
The Section 338 of the Tariff Act of 1930 authorizes the President of the United States to impose punitive tariffs up to 50% of the import's value against countries that adopt discriminatory, unjustified measures or impose excessive burdens on American trade. It is a tool of trade retaliation designed to restore conditions of reciprocity.

Section 201 of the Trade Act of 1974
The Section 201 of the Trade Act of 1974 provides the legal basis for the so-called safeguard measures (safeguards). This provision allows the American President to introduce temporary protection measures – such as additional tariffs, quotas, or other restrictions – when a domestic industry demonstrates suffering a serious injury caused by an import surge, which is a sudden and substantial increase in imports into America. The goal is to provide the affected industry with the time needed to restructure and regain competitiveness.

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U.S. Supreme Court Decision on American Tariffs

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