In rolling out the most aggressive tariff regime in the US in nearly a century, President Donald Trump has leaned heavily on emergency powers that had never been used before to impose import taxes.
Two federal courts ruled in May that he wrongfully invoked the International Emergency Economic Powers Act to justify sweeping “reciprocal” duties targeting America’s trading partners, as well as separate levies aimed at China, Canada and Mexico. The Trump administration appealed both decisions.
Its appeal in the case brought by Democratic-led states and a group of small businesses went before the US Court of Appeals for the Federal Circuit, which upheld in August that Trump exceeded his authority by using IEEPA to impose tariffs. The duties remain in effect for now and the appeals process could go all the way to the Supreme Court.
If the IEEPA tariffs are ultimately deemed unlawful, the vast majority of the levies Trump has imposed so far in his second term could come undone. But there are other means by which his tariffs campaign could continue. While the Constitution gives Congress the power to levy taxes and duties, lawmakers have delegated some of their authority to the executive branch through a number of statutes. These laws give Trump at least five fallback options to try to justify his tariffs.
In general, these alternatives come with more limits and procedural restrictions, meaning there’s less leeway for Trump to impose tariffs virtually immediately and set the rates as high as he chooses.
“The difference between them is how much process they require,” said Ted Murphy, co-leader of the global arbitration, trade and advocacy practice at law firm Sidley Austin. “Why they chose IEEPA, I think in part, was because it comes with no required process. It’s a determination that the president can make on his or her own initiative: There’s no hearing, there’s no report, there’s no nothing.”
Section 232 of the Trade Expansion Act of 1962
What it permits: Section 232 gives the president power to use tariffs to regulate the import of goods on national security grounds.
Limitations: These tariffs can’t be imposed instantly — the president can only act after an investigation by the Commerce Department determines that importing these products threatens to impair national security. After a probe is initiated, the Commerce Secretary must report the conclusions to the president within 270 days.
Unlike the blanket tariffs Trump imposed using IEEPA, Section 232 is designed to be applied to imports in individual sectors, rather than from entire countries. There’s no cap on the level of the duties or their duration.
Current uses: Trump used Section 232 to set tariffs on steel and aluminium imports in 2018 during his first term in office. He resumed his focus on these two industrial metals upon returning to the White House, leaning on the findings of the 2018 investigations to impose 50% tariffs. He also introduced levies on imports of automobiles and auto parts based on the conclusions of a Section 232 investigation completed in 2019.
Trump directed the Commerce Department in February to open a Section 232 investigation into copper imports, and after receiving the findings announced that a 50% tax would be charged on deliveries of semi-finished and so-called derivative copper products from August 1.
There could be more Section 232 tariffs on the way. The Commerce Department has open investigations into the national security effects of imports of timber and lumber, semiconductors, pharmaceuticals, trucks, critical minerals, commercial aircraft and jet engines, unmanned aircraft systems, polysilicon (a key raw material for solar panels), and wind turbines.
Section 201 of the Trade Act of 1974
What it permits: Section 201 authorises the president to impose tariffs if an increase in imports is causing or threatening serious injury to American manufacturers.
Limitations: Section 201 tariffs can’t be rolled out immediately either. The US International Trade Commission must first conduct an investigation and has 180 days after a petition is filed to deliver its report to the president. Unlike the Section 232 probes, the ITC is required to hold public hearings and solicit public comments. Section 201 is also focused at the industry level rather than broad taxes on all imports from trading partners.
The tariffs are capped at 50% above the rate of any existing duties. They can be imposed for an initial period of four years and extended to a maximum of eight years. If the levies are in place for more than a year, they must be phased down at regular intervals.
Current uses: Trump used Section 201 to place tariffs on imports of solar cells and modules, as well as residential washing machines in 2018. The solar tariffs were extended and modified by President Joe Biden; the washing machine tariffs expired in 2023.
Section 301 of the Trade Act of 1974
What it permits: Section 301 allows the US Trade Representative, under the direction of the president, to impose tariffs in response to other nations’ trade measures it deems discriminatory to American businesses or in violation of US rights under international trade agreements.
Limitations: Again, this avenue doesn’t enable an instant rollout of tariffs as the USTR must first conduct an investigation. The agency is required to request consultation with the foreign government whose trade practices are being probed, and solicit public comments, which can result in public hearings.
There’s no limit on the tariff rate that can be introduced. The duties automatically terminate after four years unless USTR receives a request for continuation, in which case the levies can be extended.
Section 301 investigations focus on one country, but USTR can conduct parallel reviews of a common concern that relates to multiple countries. It did so during Trump’s first term, looking at the digital services taxes of 11 jurisdictions, including France and the UK.
Current uses: The first Trump administration used Section 301 to impose tariffs on hundreds of billions of dollars of imports from China in 2018, following an investigation into China’s policies on technology transfer, intellectual property and innovation. The duties on China are still in effect — though some are the subject of ongoing legal challenges — and during his term Biden increased tariffs on certain products from China including electric vehicles.
In July of this year, USTR initiated a Section 301 investigation into Brazil, looking at the country’s trade and IP policies, deforestation practices, and ethanol market access. As that probe proceeds, Trump announced that 50% tariffs on many imports from Brazil would commence on August 6 and these duties were imposed using IEEPA.
Section 122 of the Trade Act of 1974
What it permits: Section 122 gives the president the ability to impose tariffs to address “fundamental international payments problems”.
Limitations: The president doesn’t need to wait for a federal agency to conduct an investigation before he can implement the tariffs. The conditions for using Section 122 powers are to remedy “large and serious” US balance-of-payments deficits, to help correct an international balance-of-payments disequilibrium, or to prevent an “imminent and significant” depreciation of the dollar.
The tariffs are capped at 15% and can only be imposed for up to 150 days. Congressional approval is required to keep the duties in place for longer.
Current uses: Section 122 has never been used before. In one of the challenges to Trump’s use of IEEPA to impose tariffs V.O.S. Selections, Inc v. Trump, the case brought by five small business owners and 12 states the US Court of International Trade pointed out that if Trump wanted to impose tariffs to remedy trade deficits, this would fall under the purview of Section 122, not IEEPA.
Section 338 of the Smoot-Hawley Tariff Act of 1930
What it permits: The Depression-era provision empowers the president to introduce tariffs on imports from nations “whenever he shall find as a fact” that these countries impose unreasonable charges or limitations, or engage in discriminatory behaviour against US commerce.
Limitations: There’s no prerequisite for a federal agency to conduct an investigation before the president can apply tariffs. Section 338 duties are capped at 50%.
Current uses: Section 338 has never been used before to impose tariffs. If Trump were to lean on this provision, such an unprecedented move may invite legal challenges. The possibility that Trump could tap Section 338 has alarmed some Democrats in the House of Representatives five lawmakers introduced a resolution in March to repeal this section of the 1930 law.
