After Court, Trump triggers temporary tariffs and against unfair competition
White House focuses on regulations that protect domestic industry
by Giovanni Iaselli, Maria Teresa Madera and Antonio Tomassini
Key points
In the aftermath of the US Supreme Court's decision invalidating the tariffs imposed under the International emergency economic powers act (Ieepa), there is a need to understand what direction the Trump administration's trade policy will take. According to Justice Brett Kavanaugh, the Supreme Court's ruling 'may not prevent presidents from imposing most, if not all, similar measures based on other regulatory provisions'. And this is exactly the trajectory taken by the administration, which within days of the ruling relaunched by relying on the so-called "three-digit tariff laws" - including Section 122 and Section 301 of the Trade Act of 1974 and Section 232 of the Trade Expansion Act - which, unlike the Ieepa, expressly give the president the power to impose tariffs.
Instruments and effects
The change of legal basis is not neutral, however. These instruments introduce stringent limits in terms of duration, scope and procedural prerequisites. One example is Section 122, already used to introduce temporary global tariffs of 10%, with the possibility of an increase to 15%, but only for a maximum period of five months (i.e. until July 2026), unless extended by Congress.
It is precisely these constraints that are prompting the administration to activate further instruments for the application of new tariffs under Section 301 and Section 232. The former allows to react to unfair trade practices, with the application of tariff measures lasting four years, subject to possible review and renewal; the latter, on the other hand, allows the introduction of tariffs for national security reasons, already applied, among other things, to the extent of 25% on steel, aluminium and derived products.
Alongside these instruments, lesser-used but potentially relevant options remain in the background, such as Section 201, which allows for the introduction of safeguard duties if an increase in imports causes serious injury to domestic industry, and Section 338 of the Tariff Act of 1930, never before used, which would allow tariffs of up to 50% in the case of trade discrimination.
The implications are not only domestic. Recent developments raise questions about the possible compatibility of the measures with the EU-US framework agreement that had set a 15% ceiling on US tariffs. Since the new measures under Section 122 are in addition to the existing Mnf rates, an increase to 15% would risk exceeding this threshold.
