Trump Replaces Expired
Universal Tariffs with New Section 301 Duties
The president has unveiled a complicated
system to forge ahead with his trade war, after the Supreme Court struck down his
original levies.
1.
Universal 10% Tariff Replaced
·
The Trump administration imposed new tariffs of
10%–12.5% on imports from more than 80 countries.
·
The new duties replaced the 10% universal tariff
that expired after reaching the 150-day legal limit under Section 122 of
the Trade Act of 1974.
2. Shift
to Section 301 Authority
·
The administration is now relying primarily on Section
301 of the Trade Act of 1974, which permits tariffs against countries
engaged in unfair trade practices.
·
This follows repeated court rulings that
invalidated Trump's earlier tariff measures.
3. Forced
Labour Investigations
·
One set of Section 301 investigations targets
countries accused of failing to curb forced and slave labour in supply
chains.
·
Tariff rates vary according to each country's
efforts to address these concerns.
·
These tariffs took effect on Friday.
4. Excess
Manufacturing Capacity Under Review
·
A second Section 301 investigation covers 16
trading partners, including China, several Asian countries, and the
European Union.
·
The investigation focuses on alleged overproduction
(excess capacity) in manufacturing.
·
Final tariff rates have not yet been announced.
5. Brazil
Faces 25% Tariff
·
The United States imposed a 25% tariff on
Brazilian imports under Section 301.
·
The administration cited unfair trade practices and
broader concerns regarding Brazil's treatment of former President Jair
Bolsonaro.
6. Canada
Hit with Separate 50% Tariff
·
Trump announced a 50% tariff on a broad
range of Canadian goods under Section 338 of the Tariff Act of 1930.
·
Products affected include cement, dairy products,
hockey sticks, plywood, paper, and wine.
·
The tariffs will apply even to products covered by
the USMCA trade agreement.
7.
National Security Tariffs Remain in Force
Existing Section
232 tariffs continue to apply to products such as:
·
Brand-name pharmaceuticals (up to 100%)
·
Steel and aluminum
(25–50%)
·
Automobiles and auto parts (25%)
·
Copper products (25%)
·
Timber and lumber (10%)
·
Cabinets, upholstered furniture, buses, heavy-duty
trucks, and certain semiconductors.
8.
Additional Product Investigations Continue
The
administration is investigating possible tariffs on:
·
Polysilicon
·
Crewless aircraft
·
Movies
·
Wind turbines
·
Medical equipment
·
Robotics
9.
Tariffs Generally Not Cumulative
·
Product-specific Section 232 tariffs generally replace
rather than add to country-specific tariffs.
10.
Courts Forced Change in Tariff Strategy
·
Trump's original tariff program under the International
Emergency Economic Powers Act (IEEPA) was struck down by the U.S. Supreme
Court.
·
The government was required to refund more than
$160 billion in previously collected tariffs.
·
A subsequent 10% universal tariff under Section 122
also faced legal challenges and expired without congressional approval.
11.
Administration's Objective
·
The administration argues that tariffs will:
o
Promote domestic manufacturing.
o
Protect U.S. industries.
o
Reduce dependence on imports.
·
Critics contend the tariffs:
o
Raise costs for American consumers and businesses.
o
Disrupt global supply chains.
o
Invite retaliation from trading partners.
o
Remain vulnerable to further legal challenges.
Key
Takeaway
The Trump administration has transitioned from
broad emergency tariff powers to a Section 301-based, investigation-driven
tariff regime, while maintaining Section 232 national security tariffs.
The policy objective of reshaping U.S. trade and manufacturing remains
unchanged, although significant legal and economic challenges persist.
President
Trump’s tariffs are changing yet again.
On
Friday, the Trump administration imposed new duties on imports from more than 80
countries, including Canada, Mexico and the members of the European Union. Now,
many goods arriving from these countries will face tariffs between 10 percent and
12.5 percent.
The
new taxes are meant to replace a 10 percent duty that Mr. Trump imposed globally
shortly after the Supreme Court invalidated a previous wave of sweeping levies.
By law, that replacement tariff could be in place for only 150 days absent congressional
approval, and the clock ran out on the president at midnight.
The
new tariffs are different from those that Mr. Trump has applied to cars, steel and
a variety of other products on national security grounds. The president has also
singled out Canada, which will soon face a 50 percent tax on a wide range of products
it sends to the United States, as the White House negotiates the future of its trade
pact with Canada and Mexico.
Despite
the ever-shifting policies, the stakes of Mr. Trump’s tariffs remain unchanged.
The president sees high duties as a way to encourage more domestic manufacturing
and protect U.S. industries, but taxes on imports tend to fall hardest on American
families and businesses. Mr. Trump’s policies may also face a familiar set of legal
challenges that could send the administration back to court, where it has lost repeatedly.
The latest: Tariffs targeting
concerns of forced labor
Mr.
Trump’s newest tariffs apply to some of the country’s largest trading partners.
To impose the duties, he invoked Section 301 of the Trade Act of 1974.
Under
the provision, the president can issue tariffs if the U.S. government finds evidence
that other countries engaged in unfair trade practices. The process to investigate
those matters can be lengthy, but the Trump administration initiated its inquiries
in March, seeing the law as a way to eventually restore some of the rates struck
down by the Supreme Court.
One
set of investigations targeted dozens of countries and the European Union over concerns
that they had failed to take steps to curb “forced labor,”
including slave labor and other coercive practices. The
rates, which were announced in June and then updated, took effect on Friday.
There
are special exceptions and rules for certain products and trading partners, including
the European Union. Each country’s rate is determined by the extent to which the
administration says it has addressed issues related to forced labor.
A
second set of investigations focuses on 16 trading partners, including China, some
other Asian countries and the European Union, for what the U.S. government describes
as “excess capacity,” or the overproduction of certain goods in manufacturing. This
slate of tariff rates is not final yet.
The
Trump administration has also singled out Brazil, using the same trade provision
to impose a 25 percent tariff on its exports this month. The administration cited
a range of unfair trade practices by that country, which Mr. Trump previously sought
to penalize over its treatment of Jair Bolsonaro, a political ally and former Brazilian
president who was sentenced to prison over a failed plot to hold on to power.
Separately,
the Trump administration took direct aim at Canada this month.
On
Monday, the president announced that the United States would soon impose a 50 percent
tariff on goods arriving from its neighbor, including
cement, dairy products, hockey sticks, plywood, paper and wine, alleging that Canada
had discriminated against U.S. industry.
To
do this, Mr. Trump tapped an obscure provision of another trade law, Section 338
of the Tariff Act of 1930, which permits tariffs as a response to countries that
put undue burdens on U.S. imports. The tariffs are set to take effect in August.
It is unclear how this duty will interact with those imposed on Canada under Section
301.
Unlike
the president’s past actions targeting Canada, this tariff will apply even to goods
that are covered under the United States-Mexico-Canada Agreement, known as U.S.M.C.A.
That trade deal, which Mr. Trump signed in 2018, is being renegotiated.
Still in place: Tariffs on
national security grounds
Dating
back to last year, some of Mr. Trump’s tariffs target products regardless of their
country of origin. To accomplish this, the president invoked Section 232 of the
Trade Expansion Act of 1962, which permits tariffs to address national security
concerns.
The
president has announced such duties on an evolving set of imports, including steel,
aluminum, car parts, heavy-duty trucks, patented drugs,
and lumber and wood products, including bathroom and kitchen cabinets and upholstered
furniture.
Product-specific tariffs
|
Product |
Status |
Rate |
|
Brand-name
pharmaceuticals |
Active |
Up to 100% |
|
Steel |
Active |
25-50% |
|
Aluminum |
Active |
25-50% |
|
Autos
and auto parts |
Active |
25% |
|
Copper
parts |
Active |
25% |
|
Timber
and lumber |
Active |
10% |
|
Cabinets
and vanities |
Active |
25% |
|
Upholstered
furniture |
Active |
25% |
|
Heavy-duty
trucks |
Active |
25% |
|
Buses |
Active |
10% |
|
Some
semiconductors |
Active |
25% |
|
Polysilicon |
In
process |
— |
|
Crewless
aircraft |
In
process |
— |
|
Movies |
In
process |
— |
|
Wind
turbines |
In
process |
— |
|
Medical
equipment |
In
process |
— |
|
Robotics |
In
process |
— |
Trump’s
Section 301 Tariffs: Map of Countries Targeted With New
Rates - The New York Times
Generally,
these duties are not added on top of those that are applied to exports from a particular
country.
The
tariffs largely have targeted products and industries that Mr. Trump would like
to bolster domestically. The rates have also fluctuated considerably, with the White
House taking steps to lower the tariffs in response to rising prices or to accomplish
other goals.
Initially,
Mr. Trump tried to wage his global trade war using the International Emergency Economic
Powers Act, a 1977 law known as IEEPA. No president before him had interpreted the
statute to apply such duties. But Mr. Trump tried to wield the law to raise or lower
rates with the stroke of a pen, even though such powers are typically reserved for
Congress.
After
a set of states and small businesses sued, the Supreme Court struck down Mr. Trump’s
entire tariff regime in February, forcing the president back to the drawing board.
In the process, the government had to repay the money it had collected — more than
$160 billion.
Immediately,
Mr. Trump turned next to Section 122 of the Trade Act of 1974. That allowed him
to impose nearly universal tariffs on all import for up to 150 days, unless Congress
agreed to extend them.
Before
the time elapsed, however, a federal court again ruled against Mr. Trump, finding
that he had not met the narrow criteria under the statute that would allow him to
tax imports uniformly. But the court left the tariffs in place as the government
commenced its appeal. Lawmakers on Capitol Hill made no effort to preserve the 10
percent rate before it expired in July.