U.S. Trade Court Hears Case About Another Round Of Trump Administration Tariffs

The U.S. Court of International Trade heard arguments last week in a case brought by small businesses and a handful of U.S. state governments challenging the 10 percent tariffs President Donald Trump imposed on trading partners earlier this year. (As Connecting the Dots reported at the time, President Trump imposed these penalties after the U.S. Supreme Court struck down his International Emergency Economic Powers Act (IEEPA) tariffs in February.)

When imposing the 10 percent penalties, President Trump cited Section 122 of the 1974 Trade Act, a section of federal law that allows the U.S. president to place a temporary surcharge imports for 150 days without congressional action in order “to deal with large and serious United States balance-of-payments deficits.” Under the president’s order, these tariffs apply to all goods coming into the United States except for products from Canada and Mexico and “certain critical minerals, metals used in currency and bullion, energy, and energy products.”

According to The Hill, both sides in last week’s court argument endured tough questioning and skepticism from the judges on the panel. Additionally, one judge said the matter before the court was “nothing like” the IEEPA case. “This case has a statute that expressly allows the imposition of tariffs or quotas. So we’re in a whole different universe now,” said Judge Timothy Stanceu. As such, the question before the court in this case is not whether the statute allows for tariffs, but, as The Hill explained, whether “Section 122’s balance-of-payments requirements [have been] met and how much authority the courts have to intervene.”

The states and businesses challenging the Section 122 tariffs argued President Trump has not met the balance-of-payments requirement since he only considered the country’s trade deficit in his justification for the tariffs. The challengers said the president also must take into account inflows of foreign capital and financial investment, which currently “balance” out the trade gap. Read more at this link.

In related news: in a post on social media last week President Trump said the U.S. government would impose a 50 percent tariff on goods from any country that supplies military weapons to Iran, effective immediately. As Supply Chain Dive reported, however, the White House has yet to publish any official documentation imposing the tariff and there also are questions about whether such a penalty would hold up under judicial scrutiny.