Trump's New Tariffs Set Precedent, Expert Warns

Former President Donald Trump implemented new tariffs on Friday, affecting 60 U.S. trading partners with duties ranging from 10% to 12.5%. These tariffs are reportedly aimed at combating unfair practices related to "forced labor." Unlike previous tariffs, this latest action is based on Section 301 of the Trade Act of 1974, which is considered to have a stronger legal foundation. This move follows the Supreme Court's decision to strike down his "Liberation Day" levies under the International Emergency Economic Powers Act (IEEPA).

The immediate economic impact of these Section 301 tariffs is anticipated to be minimal, as they largely replace previously existing import taxes. However, Scott Lincicome, vice president of general economics at the Cato Institute, warns that these tariffs set a significant precedent. In a column for The Dispatch, Lincicome critiqued the administration's justifications, suggesting the tariffs were predetermined, based on weak evidence, and imposed disproportionate rates without a clear exit strategy. He described the forced labor action as an "abuse of the law" and a departure from established U.S. government practices.

Lincicome further stated that the tariffs represent a "ham-fisted way to reinstall Trump’s tariff wall and protect it from another IEEPA-like defeat in federal court." Despite these criticisms, Lincicome suggests that courts may still approve the new tariffs, potentially due to a reluctance to challenge executive determinations. He also noted that Congress has shown little urgency to repeal Trump's tariffs, even as public opinion has become less favorable. This inaction could allow Section 301 to be utilized for imposing tariffs on "any country, at an" unspecified future point, effectively creating a "broad tariff generator" at the president's discretion.