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Trump wants to impose his new tariff regime “quickly”. See how long it might take.
Donald Trump has made new tariffs a centerpiece of his potential economic agenda for his second term and may seek to force them into existence much more quickly than many might expect.
Its allies are exploring a range of legally untested and potentially disruptive options that experts say could prove to be a second destabilizing force for global markets beyond rights themselves.
What did the former president want to do it “quickly” is to raise tariff levels to levels never seen in recent history. He could stimulate new inflation with plans to implement duties of up to 60% on many Chinese products and 10% levels in other major trading partners.
“It could be more than that,” Trump added about how high things could go in a recent interview with Time.
Whether he actually tries to implement such high fees, and how long it takes before companies start paying them at U.S. ports of entry, may depend on how aggressively Trump seeks to act among his other possible priorities if he wins.
Trump’s history with this issue suggests he could try to be bold.
“If he’s looking for an immediate jolt, . . . this might be it,” observed William Reinsch.
The former trade policymaker added in a recent interview that tariffs have long appealed to Trump as an area uniquely open to unilateral action.
“Plus, he has a thing for trade, always has,” added Reinsch, who now works at the Center for Strategic and International Studies.
Former president and Republican presidential candidate Donald Trump at a campaign event in Wisconsin on May 1. (ALEX WROBLEWSKI/AFP via Getty Images) (ALEX WROBLEWSKI via Getty Images)
Three ‘quick strike’ tariff options
It is Congress that formally – for the US Constitution – has the power to “create and collect taxes, fees, duties and excise duties”. But lawmakers have ceded much of that power to the Oval Office in a series of bills dating back decades.
This history gives a potentially victorious Trump a wide range of options.
Perhaps the quickest path is an authority granted to the president under a 1977 law called the International Emergency Economic Powers Act, which allows the president to declare an economic emergency and act accordingly.
If Trump went that route, Reinsch said, he could act quickly, but “he would almost certainly be sued by someone.”
In that scenario, the key question will likely be whether a judge would be inclined to issue an injunction to suspend the tariffs or let them go into effect while the court case unfolds.
A second potential quick strike option is Section 338 of the Tariff Act of 1930.
Two Covington & Burling LLP Lawyers Featured this “long forgotten” presidential power in 2016, noting that it grants the president “substantial yet qualified powers” to impose tariffs on countries that the White House considers to have discriminated against the U.S.
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What’s notable is that both options have already been discussed in Trump circles.
Robert Lighthizer was Trump’s trade representative last time and appears to be in line for another top job if Trump wins. He cited these two authorities in a recent interview with the New York Times, saying Trump would have “clear authority” under those two laws because of the size of the trade deficit.
Another recent essay by Peter Navarro, former director of Trump’s Trade Council, argued that tariffs should be viewed as a matter of national security and that all available authorities should be used to “increase tariff levels that will block products ‘Made in China'”. “
It is unlikely that Navarro will be involved in a second Trump administration, as he is currently serving a 4-month prison sentence for contempt of Congress, but the essay was included in a potentially influential recent book which is intended to be a “comprehensive policy guide” for Trump or the next conservative administration.
Megan Hogan is a researcher at the Peterson Institute for International Economics and has spent the last few months studying Trump’s potential trade options.
She noted that the broad powers in these laws are tempting because they could be enacted quickly and also because they could allow Trump to implement higher tariff levels.
“I think the reason he’s trying these other bills is because his new trade agenda this time is much more ambitious,” she said, drawing a comparison to 2016. Other options include limitations on the size of the duties a president can impose and other restrictions.
Hogan also mentioned another untested presidential power to watch if Trump wins: the Trading with the Enemy Act of 1917.
This law focused on intellectual property after World War I, but it is still in effect and is something that a second Trump in the White House could leverage as authority.
Three slower – but more legally tested options
There are other options Trump could use as well. These more familiar presidential authorities are those that Trump and President Biden have invoked in recent years, but they could take months to come to fruition.
One option is national security tariff authority under Section 232 of the Trade Expansion Act of 1962. There is also Section 301 of the Trade Act of 1974, which gives the president the power to charge tariffs for a broader range of reasons.
The specifics of these two options are different, but both require more formal investigations by the Department of Commerce before the fees can take effect.
In its recent initiative to call for a potentially triple steel tariffs on ChinaBiden relied primarily on Section 301 authority, but also cited 232 authority.
President Joe Biden talks about his effort to triple tariffs on Chinese steel and aluminum during an event at the United Steelworkers headquarters in Pittsburgh in April. (ANDREW CABALLERO-REYNOLDS/AFP via Getty Images) (ANDREW CABALLERO-REYNOLDS via Getty Images)
Trump’s tariffs on China were also enacted under Section 301 authority, with an investigation beginning in August 2017 and completed within a year of his presidency in March 2018.
Likewise, Trump’s 2018 plan for a 25% tariff on imported steel fell under Section 232 authority and took months and months before taking effect.
The slower option – but one that could be more immune to lawsuits – would be for Trump to formally consult with Congress.
Lighthizer has suggested that as an option, but Trump’s approach to trade has long spurred opposition from lawmakers in both parties.
Would Congress intervene?
Another question that hangs in the air is whether Congress might try to intervene to regain some of its authority if Trump wins.
Representative Don Beyer, a Democrat from Virginia, is not a fan of Trump’s approach to trade and has long promoted an effort to control some of the president’s unilateral tariff authority.
He acknowledged in an interview that much of the political will for his effort among Democrats has “waned” in recent years and, from his perspective, “we are definitely in a trade crisis.”
However, the Capitol is populated by tariff-skeptical lawmakers from both parties. Republicans helped mount an unsuccessful effort during Trump’s last term to roll back some of the president’s authority around Section 232 tariffs.
“Section 232 reform is not about President Trump,” said Sen. Chuck Grassley, R-Iowa. said at the time. “Congress has been very negligent in the past in protecting our constitutional responsibility.”
Don Beyer (D-VA) makes a move to order a 2022 hearing on Capitol Hill. (Chip Somodevilla/Getty Images) (Chip Somodevilla via Getty Images)
O current effort by Rep. Beyer has seen little progress in recent years and is currently focused only on Section 232 tariffs and not the broader set of presidential trade authorities.
This is, as Beyer said, “on the realistic side,” but he remains hopeful that Congress can try to act in the coming years, even though there is currently little or no chance of Congress taking up the issue before the November elections.
He noted that a Trump victory could be “very motivating for Congress to do our best to assert our legitimate authority.”
Ben Werschkul is the Washington correspondent for Yahoo Finance.
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