Legal Battle Over Trump’s Tariff Strategy Resurfaces
NEW YORK (AP) — President Donald Trump’s approach to imposing global tariffs is under renewed scrutiny as legal challenges surface once more. A key component of his economic strategy, broad taxes on global imports, faces another test in the judicial system.
On Friday, the U.S. Court of International Trade held a hearing to debate the legitimacy of the temporary tariffs that Trump implemented after the Supreme Court nullified his initial attempt for more extensive tariffs in February.
Initially, Trump invoked the 1977 International Emergency Economic Powers Act (IEEPA) to declare the persistent U.S. trade deficit a national emergency, leading to the imposition of hefty taxes on imports. However, the Supreme Court ruled on February 20 that the IEEPA could not be used to address national emergencies through tariffs.
In response, Trump turned to Section 122 of the Trade Act of 1974, which permits the president to apply global tariffs up to 15% for a duration of 150 days, contingent on subsequent congressional approval for extension. He promptly set a 10% tariff under Section 122, with plans to potentially increase it to 15%. These tariffs are slated to expire on July 24.
The latest tariffs were promptly contested by two dozen states and various businesses, leading to Friday’s court proceedings that lasted over three hours. The three-judge panel delved into the application of Section 122, a provision previously unused for imposing tariffs, and examined legislative intent from decades past.
The court scrutinized the language of the Trade Act, especially the term “balance-of-payments deficits,” probing its implications both historically and in contemporary contexts. Jeffrey Schwab from Liberty Justice Center remarked, “I think the judges asked tough questions of all sides and were genuinely trying to find out what Congress meant when it passed section 122.”
Trade lawyer Ryan Majerus expressed skepticism over the challengers’ likelihood of success, suggesting that the court may defer to the president given the temporary nature of the tariffs. “I just don’t see them sticking their neck out on this one,” he commented.
The origins of Section 122 date back to the financial crises of the 1960s and 1970s when the U.S. dollar was tied to gold. The provision aimed to address “fundamental international payments problems.” Critics argue its relevance today is questionable given the detachment of the dollar from gold.
Notably, the Justice Department had previously claimed that Section 122 lacked clear applicability for addressing trade deficits, a stance now awkwardly juxtaposed against the trade court’s earlier indication that Section 122 was available to tackle such deficits.
A swift decision is anticipated following the arguments, reminiscent of last May’s ruling against Trump’s IEEPA tariffs. Attorney General Dan Rayfield of Oregon, representing one of the states challenging the tariffs, emphasized the urgency of a resolution: “We are hopeful to get a result sooner than later,” he stated.
