The Supreme Court ruling did not "crush" tariffs; an article clarifying Trump's various available tools and their pros and cons

The U.S. Supreme Court's ruling does not mean that the tariff barriers meticulously constructed by President Trump have been "crushed"; he may still leverage various tools at his disposal to bring large-scale tariffs back.

According to CCTV News, on the 20th local time, the U.S. Supreme Court ruled that the large-scale tariff measures implemented by the Trump administration under the International Emergency Economic Powers Act (IEEPA) lack clear legal authorization. This ruling overturns most of the tariff measures enacted during Trump's second presidential term, but it does not end the tariff policy itself.

Although this ruling shakes the foundation of Trump's core economic policy, Trump can reactivate the tariff powers he used during his first term and can also utilize other powers, including a legal empowerment that emerged during the Great Depression of the 1930s.

Comprehensive analysis from Wall Street Insight reveals that Trump has at least five alternative legal tools to rebuild the tariff system, although these tools come with more restrictions compared to the IEEPA.

Kathleen Claussen, a trade law professor at Georgetown University, told the media: "It's hard to see a path to the end of tariffs. I believe he can use other authorizations to rebuild the existing tariff landscape." Last September, U.S. Treasury Secretary Janet Yellen revealed to the media that the government was considering alternative options as a backup.

National Security Clause: The Most Reliant Tool

Analysis suggests that Section 232 of the Trade Expansion Act of 1962 is the most relied-upon tariff tool during Trump's two terms. This section authorizes the president to impose tariffs on imported goods based on national security reasons, with no upper limit on tariff rates or implementation periods.

Trump utilized Section 232 to impose tariffs on steel and aluminum during his first term in 2018, and after returning to the White House last year, he continued to impose tariffs in these areas. He also levied tariffs on automobiles, auto parts, copper products, and lumber based on this authority. In September of last year, he imposed tariffs on cabinets, bathroom furniture, and upholstered furniture under this clause.

The advantage of this tool is that the scale of tariffs is not legally restricted, and the investigation is led by the U.S. Department of Commerce, giving the government a high level of control over the investigation results.

The limitation of this tool is that it cannot be implemented immediately. The Department of Commerce must first complete the investigation and submit a report to the president within 270 days. Additionally, Section 232 targets specific industries rather than the entire country, making it less comprehensive than the IEEPA. Currently, the Department of Commerce has multiple Section 232 investigations underway, and more industries may face such tariffs in the future.

Countering Unfair Trade: Targeting China During the First Term

Section 301 of the Trade Act of 1974 authorizes the Office of the United States Trade Representative (USTR), under presidential direction, to impose tariffs on trade measures from other countries that are deemed discriminatory against U.S. businesses or violate international trade agreements, with no upper limit on tariff rates.

Section 301 was the tool Trump used during his first term and served as the legal basis for escalating economic and trade tensions between the U.S. and China.

According to Xinhua News Agency, in March 2018, Trump signed a presidential memorandum planning to impose large-scale tariffs on goods imported from China based on the results of the "301 investigation," and to restrict Chinese companies' investments and acquisitions in the U.S. In July and August of the same year, the U.S. imposed a 25% tariff on $50 billion worth of goods imported from China in two batches China has taken equivalent measures against American products in accordance with the law, with the same intensity and scale. In September 2018, the United States imposed a 10% tariff on $200 billion worth of Chinese goods exported to the U.S. In retaliation, China imposed tariffs on $60 billion worth of American goods. The U.S. has been inconsistent and has applied extreme pressure, continuously escalating the trade war, imposing tariffs on approximately $370 billion worth of Chinese goods exported to the U.S.

According to Section 301, the validity of the relevant tariffs automatically terminates four years after they take effect, but an extension can be applied for. The drawback is that the process is complex. The U.S. Trade Representative (USTR) must conduct an investigation, usually requiring consultations with foreign governments and public input, and may hold public hearings.

Experts point out that Section 301 is very useful when targeting major powers, but it has flaws when it comes to numerous small countries targeted by so-called equivalent tariffs. Conducting dozens of Section 301 investigations against those small countries is a cumbersome task.

Addressing Trade Deficits: Unused Short-Term Options

Similarly, Section 122 of the Trade Act of 1974 allows the president to impose tariffs of up to 15% for a maximum of 150 days when there is a "large and serious" international balance of payments deficit, imbalance, or an imminent significant risk of devaluation of the dollar. This provision can be implemented without prior investigation.

Last May, the U.S. International Trade Court ruled that Trump's invocation of the International Emergency Economic Powers Act (IEEPA) to implement equivalent tariffs was illegal, stating that if the president intends to address trade deficits through tariffs, he should use Section 122 rather than IEEPA.

However, Section 122 has never been used to impose tariffs, and there is uncertainty in its practical application. Its biggest limitation is that the maximum tariff rate is only 15%, and there is a 150-day implementation period limit, which can only be extended with Congressional approval. Therefore, this provision can only serve as a short-term option and is unlikely to support the long-term and large-scale tariff system sought by Trump.

Protecting Domestic Industries: Time-Limited Investigation Mechanism

Section 201 of the Trade Act of 1974 authorizes the president to impose tariffs when an increase in imports causes or threatens serious harm to U.S. manufacturers.

This provision also cannot be implemented immediately. The U.S. International Trade Commission (ITC) must first conduct an investigation and submit a report within 180 days of receiving the application. Unlike Section 232, the ITC must hold public hearings and seek public input. Section 201 also targets specific industries rather than entire trading partners.

The maximum tariff is 50% of the existing rate, with an initial period of four years, extendable up to eight years. If tariffs are implemented for more than a year, they must be gradually reduced. Trump utilized Section 201 in 2018 to impose tariffs on solar cell components and residential washing machines, the former of which was extended and modified by Biden, while the latter expired in 2023.

Legacy of the Great Depression: The Most Controversial Alternative

Section 338 of the Smoot-Hawley Tariff Act of 1930 authorizes the president to impose tariffs of up to 50% on countries identified as engaging in unreasonable charges, restrictions, or discriminatory practices, without prior investigation and with no time limit.

This provision from the Great Depression era has never been used to impose tariffs. Historians and economists generally believe that the aforementioned tariff laws restricted world trade and exacerbated the Great Depression. U.S. Treasury Secretary Janet Yellen stated to the media last September that the government is considering using Section 338 as a Plan B However, invoking this clause that has not been used for nearly a century may trigger legal challenges.

Five Democratic representatives introduced a resolution last March calling for the repeal of Section 338, indicating that the choice would raise concerns in the political arena once activated. Commentators noted that U.S. trade negotiators have traditionally preferred to use Section 301 for sanctions rather than this controversial tool