Tariffs Are Back. What’s Changed?
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Live from New York, it's The Journal. That's right. Jess and I are back with another live show in New York City, this time on Wednesday, September 9th. We're going to be at City Winery for an evening of sharp reporting, insider conversation, and special guests. And probably wine? I hope so. Either way, you won't want to miss it. Tickets are on sale now. Check out the link in our show notes. See you there. See you there.
Last February, President Trump's trade agenda took a big hit.
The Supreme Court struck down most of President Trump's global tariffs today in a six to three decision that- The case revolves around the president's use of the International Emergency Economic Powers Act of 19- The court ruled that they were going to strike down large portions of the administration's global tariff plan, finding that the president exceeded his authority.
That could have been the end of Trump's tariff ambitions.
But it turns out... It was only a bump in the road, really. After five months of relative calm, the tariff agenda is back.
Our colleague Gavin Bade covers trade and economics.
President Trump last week unveiled tariffs on virtually all U.S. trading partners. These came into effect to replace the tariffs that the Supreme Court had thrown out in February.
These new tariffs are pretty sweeping. They target products coming from more than 80 countries, countries that the Trump administration says don't have strong enough enforcement against forced labor.
It just so happens that he thinks almost every trading ally, every trading partner that we have is not really, you know, enforcing prohibitions on forced labor on their books. Now, this really comes as news to the UK or Australia or the entire European Union, all of whom say, we don't allow goods with forced labor. We're not pro-slavery. But what the Trump administration has said is that, well, they're not doing enough to enforce the laws on their books.
What do these new tariffs signal about Trump's trade agenda?
I think that they signal that Trump's trade agenda is kind of growing up a little bit and becoming a bit more mature. Now you see them kind of using a section of law that is much more tried and tested and is much more likely to withstand legal scrutiny.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Monday, July 27th. Coming up on the show, Trump's tariffs make a comeback. Though the Supreme Court rejected the old tariffs, Trump was not deterred.
How did the Supreme Court ruling in February affect Trump's tariff agenda?
Their decision's incorrect, but it doesn't matter because... We have very powerful alternatives that have been approved by this decision.
As soon as the Supreme Court ruling happened, you saw senior administration officials, whether Treasury Secretary Scott Besson or U.S. Trade Representative Jameson Greer, they came out and said, no worries, we're just going to find a different tariff authority to rebuild this tariff wall that Trump had put up.
the Trump administration quickly replaced the illegal IEPA tariffs with a new set of temporary tariffs. Those temporary duties, 10% across the board, could stay in place for 150 days. In the meantime, officials with the U.S. Trade Representative, the USTR, and the Commerce Department got to work. Their goal was to find more permanent ways to reinstate the president's tariff regime.
If you think back to the first round of tariffs, they were based on this law, the International Emergency Economic Powers Act. The IEPA statute, it had never been used for tariffs before. And it really was kind of a long shot that the courts would uphold that tariff authority in any case, right? And so what they did was they dusted off a different part of trade law that is much more tried and tested. This is called Section 301 of the Trade Act of 1974. What it allows the president to do is impose tariffs on another country if the president finds that they are discriminating against U.S. commerce or U.S. firms. And what you have to do under this section is before you impose a tariff, you have to do a really lengthy investigation process.
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