Tariff fight heats up

Donald Trump is threatening a new 50 percent tariff on imports from any country that supplies weapons to Iran, even though the Supreme Court ruled on February 20 that his favorite emergency law does not let a president create tariffs on his own. White House aides spent April 9 publicly disagreeing over whether that same law can still be used anyway. (politico.com) (congress.gov) That emergency law is the International Emergency Economic Powers Act, a 1977 statute built for freezing assets and blocking transactions during a national emergency. In the February 20 ruling, the Supreme Court said that law does not give the president tariff power without clearer approval from Congress. (congress.gov) (pwc.com) After losing that case, the administration switched to a different law, Section 122 of the Trade Act of 1974, to keep a broad import tax alive. That law is narrower: it allows a temporary surcharge of up to 15 percent for 150 days to address balance-of-payments problems, not an open-ended all-purpose trade weapon. (reuters.com) (law.cornell.edu) That is why the current court fight is not just about one tariff rate. A group of 24 mostly Democratic-led states and two small businesses sued after the administration’s new 10 percent global import tax took effect on February 24, arguing that Section 122 is being stretched far beyond what Congress wrote. (reuters.com) (usatoday.com) The case is now in the U.S. Court of International Trade, the specialized federal court in New York that handles customs and tariff disputes. Judges there heard arguments on April 10 over whether the White House lawfully replaced the struck-down tariffs with this new global levy. (cit.uscourts.gov) (reuters.com) The administration’s problem is simple: its broad emergency route was blocked, and its backup route comes with a timer and a cap. Section 122 tops out at 15 percent and 150 days, which is why every new tariff threat now turns into a legal argument before it turns into an economic one. (law.cornell.edu) (congress.gov) That is also why the Iran threat matters beyond Iran. If the White House can persuade courts that a foreign-policy crisis revives tariff power under the International Emergency Economic Powers Act, it would reopen the exact shortcut the Supreme Court said was closed in February. (politico.com) (bloomberg.com) (congress.gov) For importers, the practical question is not abstract law but invoices. Every time the legal basis changes, companies have to decide whether to pay, challenge, or preserve refund claims while goods keep moving through U.S. ports. (pwc.com) (hklaw.com) So the tariff story this week is really two fights at once. One fight is in court over whether the 10 percent global tax that began on February 24 survives, and the other is inside the White House over whether Trump can still reach for emergency powers to launch the next round. (reuters.com) (politico.com)