In his most difficult moment, Donald Trump resorts to tariffs. The US president has dusted off import duties as he has become trapped in the Iran war and public discontent with his policies reaches a peak in this second season in the White House. In less than a week, he has imposed 25% tariffs on a large catalog of products imported from Brazil and up to 50% on Canada. The Republican leader is finalizing a new commercial salvo: he is preparing new individual tariffs for some 60 countries to anticipate the end of the universal tariffs, approved after the Supreme Court’s setback, which expire this coming Friday.
Read more Mónica García: “Partisan logic should not stop a law that seeks to prevent 140 deaths a day”
“The specific powers this administration uses have changed, but the trade strategy remains,” explained Jaimeson Greer, Secretary of Commerce, during a congressional hearing this Thursday. “We are committed to continuing to use tariffs and negotiate agreements to support the reindustrialization of our economy, protect American workers, increase their wages, and reduce our trade deficit,” he stated. A day earlier, during a television interview, he anticipated: “We expect action to be taken soon.”
The US leader thus fuels the trade war he unleashed at the beginning of his term. On April 2, 2025, a day he dubbed Liberation Day, he imposed indiscriminate tariffs on everyone. But less than a year later, in early January, the US Supreme Court declared those tariffs unconstitutional. It concluded that Trump had overstepped his authority by relying on the International Emergency Economic Powers Act (IEEPA), a 1977 law approved for other purposes, and brought down the tariff wall erected by the Republican.
A few days later, furious about the Supreme Court’s ruling, the White House occupant approved a new round of tariffs to try to mitigate the blow. He invoked Chapter 122 of the Trade Act of 1974 to establish a universal tariff of 10%, a lower average rate than in his first failed attempt. This article allows the president to impose temporary tariffs when there are “fundamental balance of payments problems requiring import restrictions,” but it has a limitation: it must be endorsed by Congress within 150 days, which is this Friday.
The political polarization sweeping the United States made it impossible for the occupant of the Oval Office to get congressional approval. Furthermore, with only four months left until the midterm elections, representatives and senators are reluctant to approve new levies that could harm their territories.
Not only that, but American companies already hit by the first round of tariffs appealed to the courts in this second attempt. Last May, the US Court of International Trade ruled against the universal 10% tariff, but an appeals court allowed it to remain in effect while the White House’s appeal was being resolved.
Meanwhile, the Department of Commerce opened a new path to establish a new tariff framework based on Chapter 301 of the Trade Act, which allows tariffs to be imposed on countries engaging in “unfair, unjustifiable, or discriminatory” practices. This path will serve as the basis for the new levies that Trump approves in the coming days. This solution requires, however, that these situations be justified through an investigation by the Office of the United States Trade Representative (USTR). Furthermore, it demands a laborious process of hearings and allegations.
To start the process, Secretary of Commerce, Jamieson Greer, opened investigations in June into 60 countries, including China, Mexico, the United Kingdom, EU members, India, and Japan, accusing them of not having taken sufficient measures to control imports produced by forced labor. In parallel, Greer initiated a file to investigate whether 16 trade partners, including EU countries and China, are overproducing, a harmful practice that causes global price drops and damage to American producers.
Read more The federal prosecutor dismissed by Trump less than an hour after taking office files a lawsuit
Last June, Greer revealed that he will impose tariffs of between 10% and 12.5% for the 60 countries investigated for non-compliance with forced labor rules. Regarding the overproduction case, the trade office still keeps the investigation open. With these two avenues, the White House hopes to rebuild the tariff wall.
Washington has signed several agreements with its trade partners, clarifying the tariff conditions and setting various exemptions, but the new framework Trump is preparing could reopen the agreements, rendering them moot.
But there’s more. The Trump Administration is working on other ways to empower the president to establish higher tariffs. One is the loophole exploited on Monday to impose levies of up to 50% on automotive materials, dairy products, and alcoholic beverages from Canada. The US government invoked an article that had never been used: 338 of the Smoot-Hawley Tariff Act of 1930, which exacerbated the Great Recession, to set the maximum rate of 50% against its northern neighbor.
Several Trump advisors have tried to convince him to maintain trade stability, not reopen the tariff war, and uphold the trade agreements signed with his partners after Liberation Day, as reported this week by the Financial Times.
The occupant of the White House could use Article 338 to impose higher tariffs on European countries that approve the digital services tax, which particularly affects US tech giants. Trump has already threatened to impose tariffs of up to 100% on states that approve this tax.
“There is still plenty of time for Trump to revoke or modify the tariffs on Canada, or change his mind completely, as we have seen in the past,” explains Anjali V. Bhatt, a researcher at the Peterson Institute for International Economics (PIIE). “But announcing 50 percent tariffs on one of the United States’ closest trading partners, even if they don’t go into effect, is a serious escalation. It is also an example of how the Trump administration is trying every possible avenue to restore its tariff wall that was overturned by the Supreme Court earlier this year,” she reasons.
Read more The Guadalajara fire enters «stabilization» phase after devastating more than 32,000 hectares
