Tariff rules face legal and political shocks
A U.S. trade court has questioned the legal basis for President Trump’s proposed 10% global tariffs, creating uncertainty about their future. At the same time, reports say Trump warned of a possible 50% tariff on China if Beijing aids Iran militarily, linking tariff policy to geopolitical tensions (The Business Times, Indian Express).
President Donald Trump’s 10 percent global tariff is in court, and a separate Trump threat would slap 50 percent duties on countries that arm Iran. (usnews.com) A three-judge panel at the United States Court of International Trade heard arguments on April 10 over tariffs that took effect on February 24. A group of 24 mostly Democratic-led states and two small businesses sued to block them. (usnews.com) Trump imposed the 10 percent levy under Section 122 of the Trade Act of 1974, a law that allows tariffs of up to 15 percent for 150 days during what the statute calls “large and serious” balance-of-payments deficits. The administration says the United States trade deficit fits that standard. (usnews.com) The legal fight follows a February 20 Supreme Court ruling that struck down Trump’s broader tariff program under the International Emergency Economic Powers Act of 1977. Trump then shifted to Section 122, which the Associated Press said would let the tariffs run until July 24 unless Congress approved an extension. (pbs.org) The case turns on an old trade-law phrase: “fundamental international payments problems.” Plaintiffs say that language was written for currency crises from the gold-standard era, not for the modern gap between imports and exports. (nbcnews.com) Trump’s own Justice Department cut against him in a filing last year, saying Section 122 had “not have any obvious application” to trade deficits, which it called “conceptually distinct” from payments problems. The trade court itself had earlier suggested the opposite when it struck down the previous tariffs. (pbs.org) At the same time, Trump wrote on April 8 that any country supplying Iran with military weapons would face an immediate 50 percent tariff on all goods sold to the United States, with “no exclusions or exemptions.” Reuters said the post came hours after he agreed to a two-week ceasefire with Tehran. (yahoo.com) Reuters reported that the warning was aimed at China and Russia, which have both denied recent weapons transfers to Iran. China’s defense ministry spokesperson Zhang Xiaogang said Beijing had “never engag[ed] in any activities that could fan the flames or add fuel to the fire.” (yahoo.com) The White House did not immediately tell Politico what legal authority Trump would use for that 50 percent tariff threat. Politico said one possible route is Section 338 of the Tariff Act of 1930, but that law is designed for discriminatory trade practices against United States goods. (politico.com) The immediate question is whether the court lets the 10 percent tariff stand through July 24. The larger one is whether Trump can keep using tariffs as a fast foreign-policy tool after the Supreme Court narrowed his strongest shortcut in February. (nbcnews.com)
