Sec 301 the Only Tariff Option before Trump as Countries Strikes Down Two Measures

· The tariff measures introduced by the administration of Donald Trump are facing growing legal challenges and criticism over their economic impact.

· The US Supreme Court reportedly struck down most tariffs imposed under the International Emergency Economic Powers Act, which had been justified using emergency powers.

· The United States Court of International Trade also ruled against another tariff strategy based on Section 122, saying the administration wrongly claimed the US faced a “balance of payments crisis”.

· A third tariff strategy under Section 301 is expected to target issues such as:

o “Structural excess capacity”

o Forced labour concerns

o Chinese industrial policies

· Critics argue the tariffs have failed to produce the promised US manufacturing revival.

· One year after implementation:

o US manufacturing reportedly lost around 100,000 jobs.

o Manufacturing’s share of US GDP fell from 9.8% to 9.4%.

· Analysts say the administration underestimated how dependent US manufacturers are on imported materials and components.

· Example: Container chassis manufacturing

o Tariffs on imported steel under Section 232 increased US steel prices sharply.

o US steel buyers reportedly pay about $971 per ton versus $460 overseas.

o This raised production costs for American chassis manufacturers, weakening their competitiveness.

· Example: Natural rubber tariffs

o Proposed tariffs on Thai rubber could hurt US tire and medical equipment manufacturers.

o The US produces no natural rubber because rubber trees require tropical climates.

o Higher tariffs would therefore only increase input costs for American industries reliant on imported rubber.

· The article argues modern global trade depends heavily on supply chains and intermediate goods rather than only finished products.

· Many US manufacturers rely on imported:

o Steel,

o Semiconductors,

o Rubber,

o Industrial equipment,

o Components and raw materials.

· According to US Census data, manufacturers account for over $1.2 trillion in imports, representing more than 40% of identified import value.

· The report estimates tariff measures added roughly $150 billion in new costs for US manufacturers.

· Critics conclude that while tariffs increased costs for consumers, they also made manufacturing in the US more expensive, preventing the expected industrial boom.

· Overall, the article argues that both courts and economic outcomes have so far been unfavorable to the administration’s tariff policies.

[ABS News Service/14.05.2026]

No Commercial Rubber Trees Grow in the United States.

The Numbers: Imports of goods by industry type (2024)* –

Industry type	Import value	Share of Imports
All identifiable U.S. importers	$2.925 trillion	89%
… Manufacturers	$1.220 trillion	37%
… Wholesalers	$0.971 trillion	29%
… All known others	$0.735 trillion	22%
All else, not identified by importer type	$0.370 trillion	11%

What They Mean:

As legal devices, the Trump administration’s tariff decrees are faring poorly. The Supreme Court killed most of Plan A — “emergency” declarations under the International Emergency Economic Powers Act — in February. The specialized Court of International Trade found Plan B, a Section 122 claim that the U.S. is in the midst of a “balance of payments crisis,” illegal last Thursday:

“Because the Proclamation’s use of trade and current account deficits to stand in the place of balance-of-payment deficits within the meaning of the statute renders the Proclamation ultra vires … Proclamation No. 11012 is invalid, and the tariffs imposed on Plaintiffs are unauthorized by law.”

Plan C, announced in March and probably going live in July, disinters a third old trade law (“Section 301”), hoping to use it to impose tariffs on allegations of “structural excess capacity” and forced labor law. (PPI's unimpressed comment here.) Court rulings on this one will presumable coming next year. In the interim, a reality check: if the administration’s decrees are struggling as a legal matter, are they nonetheless achieving their real-world economic goals?

A year ago, the administration said that while tariff increases might cause pain, this would be transitory. Though prices might go up, and living standards for American waitresses, teachers, truck drivers, and auto mechanics might fall, new manufacturing output and jobs would compensate with better opportunities. A year later, this hasn't happened: manufacturers have shed about 100,000 jobs, and their “GDP” share is down from 9.8% to 9.4%. Why not? A likely explanation is that the administration’s mental picture of both “trade” and “manufacturing” was naïve: manufacturers are far larger importers than it realized, and a lot of the tariff burden has fallen on them. Two examples, then the big-picture point:

1. Metal tariffs and container chassis-making: Sitting next to PPI’s Ed Gresser at the U.S. Trade Representative Office’s “public hearing” on Plan C last Friday, a lawyer for U.S.-based makers of container chassis for trucks argued that foreign chassis-makers are getting various tax breaks and other supports from their governments, and unfairly competing to sell the low-priced result to American trucking companies, so tariffs on Chinese-made chassis have simply shifted production to other countries.

Whether or not foreign chassis have gotten too cheap, the administration’s tariff decrees are definitely making the U.S.-made version more expensive. Last June’s “Section 232” tariff decree — not legally challenged so far, and thus fully in force — imposed a 50% tariff on steel on “national security” grounds. According to the Commerce Department, American buyers of steel now pay an average of $971 per ton for their metal, more than twice the $460 average their overseas competitors pay. A 40-foot container chassis costing about $25,000 requires about three tons of steel, and this price gap means the U.S. version now starts out $1,500 in the hole against foreign rivals — even before the potential Plan C tariffs on screws, coatings, rivets, lathes, sandblasters, gantry welders, laser cutters, positioning tables, etc., and all the inputs and capital equipment needed to make things out of metal.

2. Natural rubber tariffs and airplane tire-making: The March “Federal Register Notice” announcing Plan C cites a “trade surplus in rubber” as grounds for putting Thailand on its 16-country investigation list. Thailand does indeed have such a surplus, but this is natural — in economic terms, a consequence of Southeast Asia's “absolute advantage” in rubber trees — and a Plan C tariff on Thai rubber would help nobody and harm lots of American manufacturers.

To explain, the U.S. uses about 3 million tons of rubber a year. This includes 1 million tons of natural rubber produced by rubber-tree tapping, and 2 million tons of artificial rubber produced in factories. They aren’t substitutes for one another: artificial rubber is less chemically active and therefore preferred for gaskets, fan belts, tubes, and the soles of shoes; natural rubber, being stretchier and more friction-resistant, is the main material for airplane and truck tires, as well as for condoms, surgical gloves, construction joints, and medical devices.

All natural rubber comes from abroad — mainly Southeast Asia, secondarily West Africa — because the rubber tree, Hevea brasiliensis, is a tropical plant which thrives in hot, rainy climates. (Curious D.C. Metro residents can see one in the U.S. Botanical Gardens’ climate-controlled Tropics Room near the Capitol.) Since rubber trees don’t grow in places with cold winters, the U.S. produces no natural rubber at all. Tariffs on natural rubber, no matter how high, won’t bring rubber-tree plantation jobs to Minnesota or North Carolina, but will raise costs and reduce sales for every U.S. manufacturer of airplane and truck tires, vibration dampers in bridges, specialized medical equipment, and so on.

These specific cases illustrate a systematic administration error: a belief that “trade” operates on something like 19th-century terms, with manufacturers buying raw materials, farmers and miners exporting bulk commodities, and countries competing to export finished manufactured goods. This wasn’t exactly true then, and hasn’t been close to reality since the 1950s. Just-in-time delivery, supply chains, and coordinated production mean the largest amount of trade is in “intermediate” goods — neither raw materials nor finished stuff, but parts and components used to assemble more complex things. The largest U.S. importers are accordingly not “buyers of finished goods” such as retail chains, hospitals, construction firms, restaurants, and so forth. Instead, they are the chassis-makers buying metals, the airplane-tire-makers buying natural rubber, and other manufacturers buying energy, paint, screws, semiconductor chips, etc., so as to turn these “inputs” into final products or “semi-finished goods” they then sell to others. So though tariffs on steel may benefit steel companies, those benefits only come at the expense of chassis-makers and other metal-users; and tariffs natural rubber are pure losses for U.S. manufacturing.

Statistically, the Census’s annual “Profile of Importing and Exporting Companies” release last Tuesday credits manufacturers with $1.2 trillion in imports — over 40% of the total import value they could identify by industry. That suggests last year’s tariff decrees likely hit U.S. manufacturers with $150 billion or so in new costs. So as the tariffs raised prices for the waitresses, teachers, truck operators, and repair-shop mechanics, they also made it more expensive to operate factories in the United States. Thus no industrial boom has materialized.

In sum: So far, legal judgments on the administration’s tariff decrees haven’t been positive. Real-world economic impacts, likewise.