Trump’s Tariff, Round 2? (Part 2)

Now let us continue discussing Trump’s tariffs in his second term.

PRESIDENT-ELECT TRUMP’S PROMISES

          The President-Elect has not, as of yet, published a comprehensive timeline for trade related changes. Nonetheless, we can speculate as to what the Trump Administration’s trade policies will look like by using a handful of campaign statements and the official Republican Party 2024 Platform, referenced on the President-Elect’s website.

          GOP 2024 Platform

          Chapter 5 of the Republican Party’s official platform is titled “Protect American Workers and Farmers From Unfair Trade.” In summary, the chapter commits Republicans to policies tackling the trade deficit, reducing strategic reliance on China, and returning manufacturing to the U.S., among others.

          More specifically, the platform calls certain trade related objectives that could be achieved through tariffs under Section 301 and Section 232, though these laws are not specifically referenced. The following policies could conceivably be carried out under Section 301: “respond to unfair trade practices,” “preventing the importation of Chinese vehicles,” “bring critical Supply Chains back to the U.S.” To do so, the USTR would need to make a determination of harmful trade activity, and impose a tariff. Section 232 could be applied to “phase out imports of essential goods [from China]” and “bring critical Supply Chains back to the U.S..” This would require a finding by the Secretary of Commerce, and by the President, that these imports are harmful to U.S. national security.

          Other trade related goals, such as “baseline Tariffs on Foreign made goods,” would be likely impossible to carry out via Sections 301 and 232. This is because Section 301 focuses on specific trade policies by specific countries. While it is true that in 2020 the USTR investigated the EU and nine other countries in a single investigation, using Section 301 to investigate the entire world would be impractical and unlikely. Similarly, Section 232 focuses on specific imported goods, making it unlikely that an investigation could cover all imported goods from all countries. In the case of a general tariff, it would appear that it is simply outside the scope of the authority given to the President by Congress.

          In summary, while the GOP may be able to achieve some of its trade policy goals via Sections 301 and 232, these laws cannot likely be used to increase the general duty rate; to do so would require action by Congress, not the President.

          The President-Elect’s Campaign Promises

          The Trump Administration’s overall trade policy incorporates by reference the GOP’s official platform. Beyond that, we can speculate about specific incoming Trump Administration’s trade policy by looking at statements made by the President-Elect on the campaign trail.

          In the September 10, 2024 Presidential Debate against Kamala Harris, the President-Elect stated his intention to impose multiple import tariffs. Multiple sources confirm that he proposed a 60% tariff on all imports from China (some sources say between 60–100%). Moreover, sources agree he proposed a general duty rate of 10–20%. One additional source, PBS, attributes a promise of a 100% tariff on goods from Mexico.

          The Trump administration could achieve the promised tariffs on China and Mexico via Section 301. This would involve the USTR investigating specific trade practices of Mexico and China. Should China not agree to a friendly solution, the USTR could apply a 60% tariff on goods from China for practices the USTR deems harmful. It is also worth mentioning that the Trump Administration may be able to simply amend the existing China tariffs, like the Biden Administration did in May of 2024. In the case of Mexico, the USTR would be authorized to suspend benefits under the United States Mexico and Canada Agreement and impose a 100% tariff on imports, assuming a finding of harmful business activities.

          Using Section 232 against Mexico or China would be more difficult, because the Secretary of Commerce must find a specific national security harm related to specific goods imported. For example, the current Section 232 tariff of China covers only steel and aluminum. Therefore a Section 232 tariff on all goods from Mexico and China is unlikely, because it is outside the scope of Section 232.

          Neither Section 301, nor Section 232 would be particularly helpful in placing a 10-20% tariff on all imported goods. This is because Sections 301 and 232 narrow the scope of investigations to particular countries, particular practices, particular goods, and particular imports. For this reason, any attempt to raise the general duty rate would likely have to come from Congress, not the President.

The discussion will continue in Part 3.