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President Trump’s Second Administration: Trade Policy Priorities and Legal Mechanisms Available for Their Implementation
As President Donald Trump prepares to begin his second term today, the implications of his proposed tariffs have sparked debate. Depending on whom you ask, these tariffs and trade remedies may negatively impact the economy of the United States OR protect domestic production, American workers, and decrease the Federal deficit. Important questions remain as to how the incoming Administration plans to enact these tariffs.
President Trump campaigned on imposing universal tariffs and continues to support them, including tariffs of 10 percent on all Chinese goods in addition to any existing tariffs, a 25 percent additional tariff on goods from Mexico and Canada, and 20 percent on all imports from other countries.1 The aims of imposing universal tariffs are both economic and part of a larger foreign policy that is being pursued by President Trump.
Much of the reporting on President Trump’s intended use of tariffs does not explain the legal authorities according to which tariffs or duties can be imposed. Article 1, Section 8 of the U.S. Constitution provides that Congress has the “power to lay and collect taxes, duties, imposts and excises . . .” President Trump could achieve success in implementing tariffs and/or duties through legislation due to the Republican majority in both houses of the incoming Congress. It appears more likely, however, that the President will seek to exercise executive power delegated to the President by Congress.
This advisory provides a primer on several legal authorities that President Trump may rely on to impose tariffs or duties on all goods from specific countries, such as China and Mexico, or all goods imported into the United States from all foreign countries (hereinafter “universal tariffs”). In this regard, President Trump is likely to use (at least in part) the International Emergency Economic Powers Act to justify the imposition of blanket tariffs. To impose tariffs on imports, President Trump may also rely on Section 122 of the Trade Act of 19742 or Section 338 of the Tariff Act of 1930.3 This article first reviews the three legal authorities that President Trump may use to impose either universal tariffs or blanket tariffs on certain countries such as Mexico and Canada.
In his second administration, President Trump will likely again make use of trade laws, including Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act of 1962. In addition, Petitioners from the U.S. domestic industry are likely to continue to request initiation of antidumping and countervailing duty investigations in record numbers. This article provides background information on Section 301 and Section 232 investigations as well as information on how the domestic industry may seek the imposition of duties through filing antidumping and countervailing duty petitions with the U.S. International Trade Commission (the Commission) and the U.S. Department of Commerce (Commerce).
In addition, domestic industries themselves may request the initiation of many trade remedies discussed below, including investigations under Section 338 of the Tariff Act of 1930 as it appears that the domestic industry may petition the Commission to initiate an investigation,4 Section 301 of the Trade Act of 1974 under which the domestic industry may file a petition with the U.S. Trade Representative,5 Section 232 of the Trade Expansion Act of 1962 under which the domestic industry may file a petition with Commerce,6 and antidumping and countervailing duty investigations in which the domestic industry can file petitions before Commerce and the Commission.
International Emergency Economic Powers Act of 19777
The International Emergency Economic Powers Act (IEEPA) provides that “[a]ny authority granted to the President under Section 1702 of this title may be exercised to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy or economy of the United States, if the President declares a national emergency with respect to such threat.”8 Notably, no President has ever imposed tariffs through using IEEPA as his legal authority, yet many argue that a President’s authority under IEEPA is broad enough to do so.9 President Trump came close to imposing a tariff on all goods imported from Mexico under IEEPA in his first term to address “the emergency at the Southern border."10 Ultimately, an agreement with Mexico was reached prior to any tariffs under IEEPA taking effect.11 Given the continuing concerns with U.S. border security, it appears that President Trump may again seek to impose across-the-board tariffs on imports entering the United States from one or more countries, including possibly Canada and Mexico, or on imports from all countries through a universal tariff using IEEPA as a legal basis.
Section 122 of the Trade Act of 197412
Another law that has not been used in the past to impose duties and could be invoked by President Trump to address “large and serious United States balance-of-payments deficits” is Section 122 of the Trade Act of 1974.13 Section 122 allows the President, through presidential proclamation, to impose a temporary import surcharge not to exceed 15 percent ad valorem in the form of duties, in addition to those already imposed, on articles imported into the United States for a period not to exceed 150 days unless such period is extended by an Act of Congress.14 President Trump could rely on Section 122, conceivably upon his entry into office, to impose such duties pending other more permanent executive action. As previously noted, these duties could be extended through an Act of Congress or could be extended through federal legislation to make them longer lasting.15
Section 338 of the Tariff Act of 193016
Section 338 of the Tariff Act of 1930 is another legal basis under which President Trump could draw authority to impose duties. Notably, there is no precedent for the use of Section 338 in this manner, and President Trump’s administration may, therefore, prefer to act under other more broad legal authorities.
According to Section 338, the President may declare, via proclamation, new or additional duties of up to 50 percent ad valorem or its equivalent on imports from foreign countries when he finds that the public interest is served and that the foreign country imposes, “directly or indirectly, upon the disposition in or transportation in transit through or re-exportation from such country of any article wholly or in part the growth or product of the United States any unreasonable charge, exaction, regulation, or limitation which is not equally enforced upon the like articles of every foreign country,” and the President may also impose duties on imports from a foreign country that “[d]iscriminates in fact against the commerce of the United States, directly or indirectly,” through a variety of possible methods that include by law or by administrative regulation or through any customs or port duty “in such manner as to place the United States at a disadvantage compared with the commerce of any foreign country.”17
In addition, up to 50 percent ad valorem duties may under certain circumstances be imposed by presidential proclamation when the President finds that the public interest so requires because any foreign country imposes any unequal imposition or discrimination upon the commerce of the United States or that any benefits accrue or are likely to accrue to any industry in any foreign country as a result of such imposition or discrimination imposed by any foreign country other than the foreign country in which the industry is located such that the duties may be imposed on “articles wholly or in part the growth or product of any such industry as he shall determine will offset such benefits. . . ”18 Notably, the limits of Section 338 have not been tested, and as such, President Trump may choose to proceed with his proposed tariffs or duties under other legal bases such as IEEPA, according to which he may argue broader legal authority to impose tariffs on individual countries or possibly a universal duty.19
Section 301 of the Trade Act of 197420
Section 301 investigations allow the United States Trade Representative (USTR) to enforce U.S. rights under trade agreements when a trading partner is acting inconsistently with their treaty obligations.21 The USTR has broad authority for a range of responsive actions to resolve unfair trade practices, including imposing duties or other restrictions on imports, withdrawing or suspending trade agreement concessions, or entering into a binding agreement with the foreign government to either eliminate the conduct in question or compensate the United States with satisfactory trade benefits.22
Under President Trump’s first administration, six new Section 301 investigations were initiated.23 While domestic industries may petition the USTR to initiate an investigation, these Section 301 investigations were exclusively initiated by the executive branch under the previous Trump administration. For example, in 2017, an investigation into technology transfer from China was initiated after the USTR received a memorandum directive from President Trump.24 The subsequent investigation resulted in the imposition of additional tariffs, ranging from 7.5% to 25%, on approximately $370 billion worth of U.S. imports from China.25
Section 301 provides a President with broad discretion to resolve unfair trade practices. Accordingly, we expect the incoming Trump administration will act under Section 301 such that the trend of more frequent Section 301 investigations is likely to continue.
Section 232 of the Trade Expansion Act of 196226
Through Section 232 investigations, the President may impose restrictions on certain imports where Commerce determines that the imports are entering into the United States “in such quantities or under such circumstances as to threaten to impair the national security.”27 After a Section 232 investigation, Commerce reports its findings to the President, including whether an article is being imported under circumstances that threaten to impair national security, along with any recommendations for action or inaction.28 After receiving Commerce’s report, the President determines what action to take to remedy the import of the article so that it no longer threatens national security.29
Like Section 301 investigations, Section 232 investigations may be initiated by the executive branch, or in response to industry petitions to Commerce, although the investigations and their outcomes depend heavily on the discretion of the executive branch and thus are sometimes viewed as more political than other trade remedy possibilities.30 In President Trump's first administration, Commerce conducted eight Section 232 investigations.31 Two investigations, which led to presidential proclamations imposing tariffs on imports, were prioritized after initiation at the request of President Trump.32 President Trump instructed Commerce to determine the effects on national security of steel and aluminum imports in accordance with Section 232 investigations as to imports of steel and aluminum.33 Those Section 232 investigations concluded with the imposition of 25 percent tariffs on steel imports and 10 percent tariffs on aluminum imports.34 The Section 232 tariffs on steel and aluminum are largely still in place.35 The six other Section 232 investigations, which were either initiated by Commerce or through domestic industry petitions during President Trump's first administration, did not ultimately result in the imposition of tariffs.36 It is likely that President Trump's second administration will continue to use Section 232 as a remedy more frequently in the future, using a broad definition of national security.37
Antidumping and Countervailing Duty Investigations38
While the previously mentioned trade remedies rely heavily on executive branch action and discretion, antidumping (AD) and countervailing duty (CVD) investigations continue to be a prominent remedy sought by U.S. domestic industries represented by private law firms which assist them in bringing AD and/or CVD petitions before the Commission or Commerce. AD and CVD investigations address unfair trade practices by providing relief to domestic industries as a matter of law where the industry is injured, threatened with injury, or the establishment of an industry is materially retarded due to imports being sold in the U.S. at less than fair value in AD investigations or subsidized by a foreign government in CVD investigations.39
Before duties are imposed, the Commission must find that the imports are a cause of material injury (or threat thereof) to the U.S. industry. The statute defines “material injury” as harm that is more than inconsequential, unimportant, or immaterial. In making this determination, the Commission considers, among other economic factors, the volume of subject imports (including their share of the U.S. market), the impact of the imports on U.S. prices, and the impact of the imports on U.S. production and profits.40
Domestic industries may also bring AD and/or CVD petitions when an industry in the United States is materially retarded by reason of imports.41 The material retardation standard is particularly well suited for initiating investigations where a U.S. industry wants to establish or expand production, but they have been unable to do so due to unfair low prices of imports. Currently, Buchanan is the only law firm with active investigations alleging material retardation. Although the provision is little used, it provides an important route to trade relief for nascent domestic industries.
The remedies achieved in AD and/or CVD investigations are often long-lasting, with duties remaining in place for a decade or longer as Commerce conducts administrative reviews to assess duty rates and with five-year reviews undertaken by the Commission and Commerce. There are currently a historically large number of AD and CVD investigations pending before Commerce and the Commission and there is no reason to believe that domestic industries will slow the pace of seeking trade relief during President Trump’s second administration.
Ultimately, President Trump's second administration will continue to utilize a variety of trade remedies when it seeks to provide U.S. industries with trade relief and works to achieve trade policy goals. While the macroeconomic effects of tariffs should certainly be considered, domestic industries will likely find that many of the Trump administration’s trade actions are calibrated with their interests in mind.
Buchanan has a team of international trade and national security attorneys, and government relations professionals ready to help U.S. manufacturers with U.S. trade remedy laws and trade policy.
- Gavin Bade, Decoding Trump's Tariff Threats, Politico Nightly, (Dec. 6, 2024), https://www.politico.com/newsletters/politico-nightly/2024/12/06/decoding-trumps-tariff-threats-00193118; Donald Trump (@realDonaldTrump), Truth Social (Nov. 25, 2024), https://truthsocial.com/@realDonaldTrump/posts/113546215051155542.
- See 19 U.S.C. § 2132.
- See 19 U.S.C. § 1338.
- Clark Packard and Scott Lincicome, Presidential Tariff Powers and the Need for Reform, CATO Inst. (Oct. 9, 2024), https://www.cato.org/briefing-paper/presidential-tariff-powers-need-reform (noting that Section 338 has never been used to impose tariffs but indicating that “[a] private party or the executive branch may petition the US International Trade Commission (USITC) to initiate a Section 338 investigation.”) It should be noted, however, that Section 338 itself does not explicitly indicate a private right to petition the Commission to initiate a Section 338 investigation. See generally John K. Veroneau & Catherine H. Gibson, Note, Presidential Tariff Authority, 111 AM. J. INT’L L. 957, 961-65 (2017). See also United States Tariff Commission, Twenty-first Annual Report of the United States Tariff Commission, at 38 (1937).
- See 19 U.S.C. § 2412(a)(1).
- See 19 U.S.C. § 1862(b)(1).
- 50 U.S.C. §1701 et seq.
- See 50 U.S.C. §1701(a)
- Packard and Lincicome, supra note 4; Warren Maruyama et al., Making Tariffs Great Again: Does President Trump Have Legal Authority to Implement New Tariffs on U.S. Trading Partners and China?, Center for Strategic and International Studies (Oct. 10, 2024), https://www.csis.org/analysis/making-tariffs-great-again-does-president-trump-have-legal-authority-implement-new-tariffs.
- Statement from the President Regarding Emergency Measures to Address the Border Crisis (May 30, 2019), https://trumpwhitehouse.archives.gov/briefings-statements/statement-president-regarding-emergency-measures-address-border-crisis/.
- Donald Trump (@realDonaldTrump), X (Jun. 7, 2019), https://x.com/realdonaldtrump/status/1137155056044826626; See also Packard and Lincicome, supra note 4.
- See 19 U.S.C. § 2132.
- See id. § 2132(a)(1).
- See 19 U.S.C. § 2132(a)(3)(A). It should be noted that the President also has authority under this statute to put in place temporary import quotas “(i) only if international trade or monetary agreements to which the United States is a party permit the imposition of quotas as a balance-of-payments measure, and (ii) only to the extent that the fundamental imbalance cannot be dealt with effectively by a surcharge proclaimed pursuant to subparagraph (A) or (C).”
- Id. § 2132(a).
- See 19 U.S.C. § 1338.
- See id. § 1338(a)(1)-(2), (d).
- See id. § 1338(e).
- See also Packard and Lincicome, supra note 4.
- See 19 U.S.C. §§ 2411 et seq.
- See 19 U.S.C. § 2411.
- Id. § 2411(c)
- Cong. Rsch. Serv., IF11346, Section 301 Of The Trade Act Of 1974 [hereinafter Section 301 Investigations]. Prior to President Trump’s first administration, the last Section 301 investigation which resulted in tariffs was in 2009.
- Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 82 Fed. Reg. 40,213 (Aug. 24, 2017)
- Section 301 Investigations, supra note 23; See, Notice of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 40,823 (Aug. 16, 2018); Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 85 Fed. Reg. 3,741 (Jan. 22, 2020).
- See 19 U.S.C. § 1862.
- See id. § 1862(b)(3)(A), (c)(1)(A)(i)-(ii).
- Id.
- See id. § 1862(c)(1).
- See id. § 1862(b)(1), (c)(1).
- See Cong. Rsch. Serv., R45249, Section 232 Investigations: Overview and Issues for Congress 2 (2021) [hereinafter Section 232 Investigations].
- Id. at 1; See also Ting-Ting Kao, The Trump Effect: Section 232 and Challenges to the Dispute Settlement Body at the World Trade Organization, 51 Geo. Wash. Int'l L. Rev. 653, 654 (2019).
- Memorandum on Steel Imports and Threats to National Security, daily Comp. Pres. Doc. (Apr. 20, 2017), chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.govinfo.gov/content/pkg/DCPD-201700259/pdf/DCPD-201700259.pdf.; Memorandum on Aluminum Imports and Threats to National Security, daily Comp. Pres. Doc. (Apr. 27, 2017), chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.govinfo.gov/content/pkg/DCPD-201700284/pdf/DCPD-201700284.pdf.
- Section 232 Investigations, supra note 31, at summary (2021).
- Maruyama, supra note 9.
- See Section 232 Investigations, supra note 31, at 1, 16, 18-24 (2021); see also Proclamation No. 9888 of May 17, 2019: Adjusting Imports of Automobiles and Automobile Parts Into the United States, 84 Fed. Reg. 23,433, 23,435 (May 21, 2019); see also Bureau of Industry and Security, The Effect of Imports of Vanadium on the National Security (Feb. 22, 2021), chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.bis.doc.gov/index.php/documents/section-232-investigations/2793-vanadium-section-232-report-public-with-appendices/file.
- See, e.g., U.S. Dep’t of Commerce, Bureau of Industry and Security, The Effect of Imports of Steel on the National Security 1, (January 11, 2018). “[T]he Secretary in this investigation determined that ‘national security’ for purposes of Section 232 includes the ‘general security and welfare of certain industries, beyond those necessary to satisfy national defense requirements, which are critical to minimum operations of the economy and government.’”
- See 19 U.S.C. § 1671; 19 U.S.C. § 1673.
- See 19 U.S.C. § 1671d(b)(1); 19 U.S.C. § 1673d(b)(1).
- See 19 U.S.C. § 1677(7).
- 19 U.S.C. § 1671(a)(2)(B); 19 U.S.C. § 1673(2)(B).