Trump launching new trade investigations that could bring tariffs
President Trump is gearing up to initiate new trade investigations that could potentially lead to additional tariffs after the Supreme Court invalidated his use of emergency powers to implement “reciprocal” and “fentanyl” levies. The President is planning to utilize Section 301 of the Trade Act of 1974 to examine whether major trading partners have policies that discriminate against US goods or violate trade agreements.
These investigations are anticipated to take several months to complete and could pave the way for the revival of Trump’s “reciprocal” tariffs on a more permanent basis. Additionally, it may encourage countries like Japan, South Korea, and the European Union to ratify trade agreements negotiated last year.
The recent development was first reported by the New York Times and later confirmed by the Wall Street Journal. Following the Supreme Court’s 6-3 ruling against his trade policies, Trump signed a new 10% baseline tariff under a different legal authority. This temporary global baseline tariff, set to increase to 15%, falls under Section 122 of the Trade Act of 1974, allowing Trump to impose tariffs for up to five months without requiring congressional approval.
In the event that the Section 301 investigations yield unfavorable results, any tariffs imposed based on those findings would remain in effect for four years, with the possibility of renewal. The analysis by the office of the US Trade Representative, led by Jamieson Greer, will focus on evaluating foreign government subsidies or currency manipulation that may lead to “excess” manufacturing capacity in a particular country.
Moreover, the investigations will also delve into whether countries like China engage in the use of forced labor. Despite the Supreme Court’s ruling, some of Trump’s existing tariffs, imposed under Section 232 of the Trade Expansion Act of 1962, remain intact. These tariffs include a 50% duty on copper, steel, and aluminum, as well as a 25% tariff on foreign-made vehicles and car parts, justified on national security grounds.
Furthermore, certain pending trade agreements feature lower vehicle tariffs, such as 15% for Japan, South Korea, and the European Union, and 10% for the UK. This provides additional motivation for these countries to uphold the trade pacts negotiated with Trump under the threat of “reciprocal” tariffs.
In conclusion, President Trump’s decision to launch new trade investigations signifies a shift in his approach to trade policy following the Supreme Court’s ruling. The outcome of these investigations could have significant implications for US trade relations with key partners around the world.
