What are Sections 122 and 301, Trump's potential alternate tariff tools
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What are sections 122 and 301, Trump’s potential alternate tariff tools?
The Supreme Court has struck down Trump’s authority to impose tariffs on other countries through the International Emergency Economic Powers Act (IEEPA). But it’s not the only tool at the president’s disposal to press on with his tariff regime.
“The reality is the president is going to have tariffs as part of his trade policy going forward,” U.S. Trade Representative Jamieson Greer said in an interview with The New York Times on Jan. 15 in response to rumblings that the Supreme Court may overturn some or all of Trump’s tariffs.
In the interview, Greer said if the high court did not rule in the administration’s favor, the Office of the U.S. Trade Representative (USTR) has equipped the president with a number of mechanisms buried within the 1974 Trade Act that would allow him to continue to see through his trade goals.
Section 301 is one statute available to Trump to implement tariffs and one that Greer listed as an option. Section 301 empowers the USTR to employ tariffs against countries it deems as having “discriminatory” or “unfair” trade practices. The president used this tool during his first term to impose tariffs on Chinese exports, and the legislation survived several attempts at legal pushback at the time.
However, limitations within Section 301 mean Trump cannot use the statute to replace his existing tariffs right away. First, an investigation must find that a foreign country restricted U.S. commerce through discriminatory practices, which could take months.
Trump said at a Friday press conference following the court’s ruling that he was “initiating several Section 301, and other investigations, to protect our country from unfair trading practices of other countries and companies.”
Greer also mentioned Section 122 of the 1974 act, which allows the president to enact tariffs to address “large and serious United States balance-of-payment deficits.” The statute has not yet been enacted to enforce tariffs, but Trump said during Friday’s press conference that he would be imposing a 10 percent global tariff using the statute “over and above our normal tariffs already being charged.”
Prior to the ruling, Trump was using the IEEPA to implement tariffs without restrictions on duration or amount. But any Section 122 tariffs he imposes may last for up to only 150 days and are limited to 15 percent of a product’s estimated value. Congress would need to approve an extension of Trump’s threatened Section 122 tariffs to go more than 150 days.
According to Greer, Trump could also invoke tariffs through Section 232, a statute allowing the president to impose tariffs on countries that threaten national security, or Section 338, which could allow for up to 50 percent tariffs on countries the president deems disadvantageous or discriminatory to U.S. commerce.
The president referenced Section 232 during his comments Friday.
“Effective immediately, all national security tariffs under Section 232, and existing Section 301 tariffs — they’re existing, they’re there — remain in place, fully in place, and in full force and effect,” Trump said.
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