The Trump administration is scouring U.S. law to find a basis for furthering disrupting the existing global trading system and thus the broader international political and economic system. Legally, his reliance on various domestic laws is very questionable, especially national security and foreign policy.

     Trump has already imposed a 25% universal tariff and steel and aluminum (under IEEPA) as well as an additional 10% on Chinese imports (also under IEEPA). He previously threatened to impose tariffs on Mexico and Canada before backing off (also under IEEPA). His administration did away with the “de minimis exception” (1930 Tariff Act) and is now considering Reciprocal Tariffs as a system as a means of doing away with the WTO’s ‘Most-Favored-Nation Principle” (under Section 338 of the 1930 Tariff Act — 50% increase for foreign discrimination).  

     His various proposals and executive actions will only hurt the U.S. economy and consumers as well as our allies. This can be seen most recently in Trump’s support of ‘reciprocal tariffs.’ The U.S. federal courts (who reviews executive actions) and the Congress (who has the exclusive Constitutional power to regulate tariffs and trade) hold the keys to stop this.  We’ll see.

     Needless to say, new U.S. tariffs will lead to retaliation and those will then lead to even more counter-retaliation. The setting of tariffs under Gatt / WTO including the various and numerous trade rounds was a huge task. Tariffs were not identical, but once negotiated they were binding had to be applied evenly, without discrimination, under the ‘most-favored-national principle.’ Less developed countries (India and China) were permitted higher tariff levels.

     Renegotiation of existing tariffs bilaterally today (to make them equal) and then to administer these tariffs worldwide, would be an almost incomprehensible undertaking. The Harmonized Tariff Schedule of the U.S., which details individual rates on particular commodities, has about 13,000 line items. The U.S. trades with roughly 200 countries. 

     Trump is now considering a broad range of U.S. trade and economic statutory provisions as bases for new tariff and related economic actions — such as §201 (escape clause), §232 (national security), §301 (unfair practices / retaliation), A/D and Subsidy laws (predatory pricing and export subsidies), IEEPA (foreign policy and national security), export controls, Entity List (as to foreign buyers), CFIUS (investment rules), etc.

“The administration has considered Section 301 of the Trade Act of 1974, which allows for tariffs to address discrimination by foreign governments, according to people familiar with the situation. The administration is also thinking about invoking Section 338 of the Tariff Act of 1930, which hasn’t been used in decades but allows for tariffs of up to 50% on nations that discriminate, or “disadvantage,” U.S. companies. The president could also deploy the International Emergency Economic Powers Act, the law Trump used to impose his recent 10% additional tariff on China, but which would require him to declare a national emergency and is the perhaps most likely to open him up to legal scrutiny. The administration could also cobble together several legal authorities, depending on the nations targeted for tariffs. No matter which legal route Trump chooses, trade experts said reciprocal tariffs would represent a further break from global trading rules and norms set up as part of the World Trade Organization, which Trump undermined in his first term by blocking appointments to its top dispute-settlement panel. Reciprocal tariffs, according to some trade experts, would dilute the WTO concept of “most favored nation” status, a principle of the organization that requires member nations to guarantee equal tariff and regulatory treatment to other members. The action would be gutting a huge part of why we set up WTO in the first place … Trump and his allies have long argued that China and other nations game WTO rules and cheat the U.S.” “Reciprocal Tariffs.” Wall Street Journal (2.13.25).

“Trump is using a rarely deployed national security law, known as the International Emergency Economic Powers Act, to legally justify imposing tariffs on countries that have trade agreements with the United States ….  Trump’s legal rationale for the tariffs is likely to be challenged in American courts. It could also dissuade other countries from negotiating trade pacts with the United States out of fear that the president could arbitrarily scrap them by using his emergency powers …. The pushback from major industry groups that have been bracing for the tariffs has been less restrained. U.S. spirits, cars and farm products are all ripe targets for retaliation from Canada, Mexico and China, and retaliatory tariffs could deal a blow to the U.S. economy. Big lobbying groups urged the Trump administration to consider other ways to address border and fentanyl concerns and warned that tariffs would only harm American workers and businesses.” “Trump Moves  to Upend Global Economic Order.” New York Times (Feb. 14, 2025).

“Trump confirmed that he’s going ahead with his reciprocal tariff plan. The U.S., he said, will impose the same tariffs on other countries as they impose on the U.S.: “No more, no less.” That sounds fair—we treat them the way they treat us—but it’s actually a terrible idea …. The U.S. shouldn’t have stupid tariff policies just because other countries have stupid tariff policies …. A reciprocal policy would enormously complicate the U.S. tariff system. The Harmonized Tariff Schedule of the U.S., which details individual rates on particular commodities, has about 13,000 line items. The U.S. trades with roughly 200 countries …. Reciprocal tariffs don’t make sense even using the mercantilist logic that pervades the Trump administration. A prolonged bout of inflation has made the American public sensitive about prices.” “Reciprocal Tariffs Make No Sense.” Wall Street Journal (2.14.25).

“Trump ordered federal agencies to explore how to adjust U.S. tariffs (Reciprocal Tariffs) to match those of other countries, a move that threatens international rules in place for decades …. Trade experts said such moves would undermine the WTO’s paradigm of “most favored nation” status, a principle of the organization that requires member nations to guarantee equal tariff and regulatory treatment to other members unless they have free-trade agreements in place …. If President Trump does move the United States to a reciprocity-based tariff system, that would arguably be a fundamental change to U.S. trade policy …. It also wasn’t clear what legal authority Trump would use to impose the tariffs, though the White House indicated several laws would likely be deployed.” “Trump Orders Review of Reciprocal Tariffs.” Wall Street Journal (Feb. 14, 2025).

“Trump has unveiled a sweeping plan to impose “reciprocal” tariffs on America’s trading partners, heralding greater disruption for the global economy …. Trump criticized the EU over its value added tax regime, digital services tax and efforts to curtail American tech companies in the courts …. Trump’s reciprocal tariff plan would be at odds with many of the established rules of global trade. Trump could use different legal powers to implement reciprocal levies, such as Section 301 of the Trade Act and the International Emergency Economic Powers Act, to circumvent Congress. Trump said he intended to issue further tariffs against cars, chips and pharmaceuticals “over and above” the reciprocal tariffs. He has already applied levies of 10 per cent on all Chinese imports and tariffs of 25 per cent on all steel and aluminum imports are set to take effect next month. “ “Reciprocal Tariff Plan.” Financial Times (Feb. 14, 2025).

“Trump is pursuing a far more aggressive trade policy than he embraced in his first term ….  Trump proposed his most aggressive and consequential measure to date with a global rework of tariffs — a move that made it clear that the president would have no qualms about weaponizing tariffs and antagonizing trading partners to extract concessions …. That came just days after he said he would impose 25 percent tariffs on steel and aluminum from all countries as of March 12, with no exclusions …. Trump came to the brink of imposing tariffs on all goods from Canada and Mexico — more than $900 billion of trade — over concerns about illegal drugs and migrants. He ultimately paused those measures for one month after winning some modest concessions. But he moved forward with an additional 10 percent tariff on all goods from China …. Trump’s proposed tariffs would be one of the steepest increases in trade taxes in American history, and the largest since the Smoot-Hawley tariff of the 1930s.” “Trump’s Tariffs and Bending Global Trade.” New York Times (2.14.25).

“Trump’s tariffs would violate W.T.O. rules in two ways. Applying different tariff rates to different countries would violate a commitment by W.T.O. members not to discriminate against one another …. A decision to unilaterally increase U.S. import tariffs, product by product, country by country, would be President Trump’s biggest blow yet to the rules-based trading system. …. Trump’s proposal represents a significant reversal in a decades-long push in trade policy toward lowering international barriers. While past presidents have often negotiated with foreign countries over tariffs, those agreements have typically led to lower levies, not higher ones. …. The president signed a proclamation imposing 25 percent tariffs on all foreign steel and aluminum. Mr. Trump said his advisers would also meet over the next four weeks to discuss measures on cars, pharmaceuticals, chips and other goods …. The White House said the president could draw on several legal authorities to issue the tariffs, including Section 232, which relates to national security; Section 301, which relates to unfair trading; and the International Emergency Economic Powers Act …. Trump criticizes other countries for charging higher tariffs on certain American products than the United States charges them. For example, he has pointed to the 10 percent tariff that the European Union charges on American cars, versus a 2.5 percent tariff for cars sold in the other direction …. The United States has set its tariff rates for imports lower than that of some trading partners, because for decades U.S. officials were convinced of the benefits of freer trade. They believed lower tariffs would allow the United States to import cheap products for U.S. consumers and raw materials for its factories, fueling the American economy …. Economists and historians also say that the varying tariffs that countries put on one another’s products are not evidence of discrimination. Rather, they reflect the priorities that each government had when it agreed to maximum tariff rates in negotiations with other members of the World Trade Organization.” “Trump’s Tariffs ad Bending Global Trade.” New York Times (2.14.25).

“Seven years ago, the spirits industry found itself a casualty in a worldwide trade war …. The European Union retaliated with a spate of tariffs that included a 25 percent charge on American whiskey — aiming to deliver a blow to Senator Mitch McConnell, Republican of Kentucky and the then majority leader. A series of tit-for-tat tariffs followed, hitting spirits from rum to cognac on both sides of the Atlantic …. After March 31, 2025 ramped-up tariffs of 50 percent will automatically apply to American whiskey, and charges will hit a range of other goods, including motorcycles …. American whiskey exports to the European Union fell 20 percent in the year after the imposition of 25 percent tariffs ….  The idea that tariffs cost all parties involved has, in fact, been one of the European Union’s main talking points. “Tariffs are taxes — bad for business, worse for consumers.”  “European Whiskey Retaliation and Mutual Reciprocal Retaliation, Then and Now.” New York Times (Feb. 2015).

“The US plan would break World Trade Organization rules, since members must offer the same rates to each other unless they conclude a bilateral or regional trade deal — the so-called most favored nation principle. While the US has long since stopped playing within WTO rules, moving to a system of reciprocity would mark a sharp departure for Washington’s trade policy. …. Japan, India and the EU were the biggest targets of the new measures, while the White House fact sheet added Brazil to the list …. Japan has relatively low tariffs but high structural barriers whereas India . . . has some of the highest tariffs in the world …. India, Thailand and South Korea would be most exposed to retaliation …. The EU could also suffer. It levies 10 per cent on car imports, while the US only charges 2.5 per cent. Cars account for 8 per cent of EU exports to the US …. The US trade-weighted average tariff is 2.2 per cent, according to the WTO. By contrast, India’s average rate is 12 per cent …. U.S. tariffs — for example the 25 per cent tariff on light trucks or ones on clothing and footwear — will not go down …. What has Trump done so far …….. The president’s threats to impose tariffs on Canada and Mexico forced both countries to hurry to show Washington they were making meaningful efforts to secure their borders and stymie fentanyl trafficking.  Trump has also shown he is willing to apply steep tariffs to protect specific US industries, approving a blanket 25 per cent tariff on all imports of steel and aluminium beginning in March. Trump officials said there would be no exclusions for any companies or products. He has also carried out his threat to impose 10 per cent tariffs on all imports from China, a move that hits everyday consumer goods. Trump suggested he would put tariffs on auto imports ….. Alongside these early actions, Trump has ordered his investigations into whether foreign countries are unfairly taxing US companies, the reasons for the US’s persistent trade deficit and whether countries are manipulating their currencies. “Trump’s Reciprocal Tariff Plan.” Financial Times (Feb. 15, 2025).

“Higher tariffs would also complicate matters for the European Central Bank, which has been steadily cutting interest rates …. Trump has taken particular aim at Germany, Europe’s largest economy …. At risk are Europe’s automakers like Audi and Porsche, which export billions of dollars’ worth of cars to the United States, as well as pharmaceutical companies ….The German auto industry, in particular, appears to bother Trump, who for years has claimed that BMW, Mercedes-Benz and Volkswagen put “millions of cars” on U.S. streets. But in 2023, those three German carmakers produced 900,000 vehicles in the United States, creating 48,000 jobs.” “Trump’s Tariffs and Europe.” New York Times (Feb. 15, 2025).