‘Even if we lose…’: Donald Trump administration readying two-part strategy to impose reciprocal tariffs, says ‘we will do it another way’

For now, Donald Trump retains his negotiating power with trading partners. (AI image)

The Donald Trump administration is evaluating a two-part strategy to deal with the US trade court ruling that blocked the American President’s sweeping reciprocal tariffs on several countries. The court ruling said that Trump overstepped his authority in imposing the tariffs. Currently, the Court of International Trade’s judgement against Trump’s tariffs under the International Emergency Economic Powers Act remains suspended due to an emergency stay. For now, this will help Donald Trump retain his negotiating power with trading partners.However, if subsequent court rulings also uphold the strike down of tariffs, US government officials have indicated that they have other measures up their sleeve.Trump Administration Message: ‘We will do it another way’In the first part of the twofold response, officials are exploring the implementation of broad-based tariffs across international markets using an unprecedented section of the Trade Act of 1974, according to a Wall Street Journal report.This provision permits levies up to 15% for 150 days to address trade deficits with international partners, according to the sources quoted in the report.Also Read | ‘Overstepped his authority…’: What are the scathing observations made by US trade court in ruling against Donald Trump’s tariffs?Under Section 122, Trump has the authority to implement a 15% tariff for a duration of 150 days to control imports. This provision aims to tackle balance-of-payments issues or prevent substantial devaluation of the dollar. However, any extension beyond the initial 150-day period would necessitate Congressional approval.This interim measure would provide Trump sufficient time to develop country-specific tariffs for major trading nations under a separate clause of the identical legislation, which addresses unfair international trade conduct.The second approach involves a detailed notification and consultation process, which administration officials believe provides stronger legal standing compared to the recently invalidated tariff policy. This alternative method has precedent, having been employed multiple times previously, including during Trump’s initial China tariffs.In a Bloomberg TV interview, Peter Navarro, senior counselor for trade and manufacturing, acknowledged the administration’s consideration of a dual-pronged tariff strategy. This would initially implement Section 122 of the 1974 trade law, followed by Section 301.When questioned about these specific provisions, Navarro confirmed, “Those are the kinds of thoughts” being evaluated by the economic team. He spoke of the potential application of the Smoot-Hawley Tariff Act of 1930, which enables tariffs against nations engaging in discriminatory practices against the US. He also mentioned the possibility of expanding tariffs based on national security considerations.“So you can assume that even if we lose, we will do it another way,” Navarro said.Navarro expressed confidence in their robust IEEPA position. “I think the big picture here is we’ve got a very strong case with IEEPA, but the court basically tells us, if we lose that, we just do some other things. So nothing’s really changed,” Navarro said.Also Read | Donald Trump’s trade policy thrown into turmoil! Will countries like India, China be tempted to hold off tariff talks?What does it mean for other countries?Globally, the implications are significant. Legal experts and trade analysts suggest that while court decisions might temporarily hinder Trump’s worldwide tariff strategy, they are unlikely to completely halt his efforts to secure trade advantages through pressure tactics. These rulings could simply lead to a shift in legal frameworks rather than a complete cessation.Specialists are advising their international stakeholders, businesses and other interested parties to anticipate that Trump will persist with his tariff agenda, albeit potentially through different mechanisms.“This is just the opening salvo,” said Dan Ujczo, a lawyer and U.S.-Canada trade expert at Thompson Hine in Columbus, Ohio. “The Trump administration has a number of options including reframing the executive orders to include some of the boundaries used in the CIT opinion,” Ujczo was quoted as saying by Reuters.“For folks celebrating this opinion, this may be a case of be careful what you ask for,” he added.Also Read | ‘Blatantly wrong’: Donald Trump administration blasts US court ruling blocking tariffs; says trade policy will continue