CPA Counsel: Expect Trump Will Lose IEEPA Case; Section 232 Derivatives Unworkable

Coalition for a Prosperous America's trade counsel Charles Benoit works at a lobbying and research group that was closely aligned with President Donald Trump's trade policy in the first term.

In a wide-ranging interview with Capitol Forum on Jan. 30, Benoit said no president has ever been as good as Trump on tariffs, and he loves that the president sees tariffs as a good way to raise revenue, not just as leverage and to protect domestic producers.

"I’m pessimistic on a good outcome" for the tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, he said, particularly as the court takes longer to issue its opinion. He said he thinks conservative justices' concerns about an executive taking actions that belong to Congress in the Constitution are not good for preserving IEEPA.

He said that the administration should have pushed harder for Congress to write into law higher tariffs, to raise enough revenue that no household with less than $150,000 income would pay income taxes. (That covers two-thirds of U.S. households).

"There’s almost nobody in Congress who sees the value of tariffs for revenue," Benoit said. "To me, they're a very elegant tax. The compliance costs are virtually nothing."

If the Supreme Court does find IEEPA's use for tariffs unconstitutional, Benoit said the administration should push for another bill that can pass the Senate with a bare majority, and that it should ask Congress to put a 10% tariff around the world and 20% on China. "That will preserve most of the revenue," he said.

Benoit said he's pessimistic that the administration can replace the amount of revenue it has collected via IEEPA by expanding Section 301 or using Section 338, which authorizes tariffs of up to 50% with a finding that a foreign country discriminated against U.S. commerce.

"I think it’s really a bad approach," he said. "I think it’s Congress or bust, personally."

The administration has already launched Section 232 actions in 15 areas, some of which have led to tariffs, some of which have concluded without tariffs, and some of which have not been announced.

Benoit said he's a fan of Section 232 actions -- "the quintessential protection in the American tradition," he called them.

But he said no agricultural goods or plastics have been covered by investigations, and if you wanted to broaden sections 232 and 301 enough to bring in equivalent revenue, you'd have to staff up the Commerce Department and the Office of the U.S. Trade Representative to the size of the Pentagon.

Benoit said each Section 232 report has been getting better, and he praised Alabama representatives for pushing for a 50% tariff on cabinets. (The 50% rate has been postponed; it currently is at 25%.)

However, Benoit said, the Section 232 derivatives executive order has led to an unenforceable regime.

"That is such a mess," he said. "It’s too complicated, it doesn’t work."

He said the administration's intentions were good, because you don't want foreign producers to be able to export goods made of steel or aluminum at a lower cost than domestic producers making the same goods, because domestic manufacturers have to pay 50% more for the metal.

But the idea that for derivatives, you'll apply 50% to the metal content and the non-metal content faces the IEEPA tariff?

"Here's how that works in practice," Benoit said: "that doesn’t work."

He said the foreign manufacturer is a judgment-proof entity, and the values are a fiction.

"It’s a complete mess," he said. "We have to get away from it completely."

He noted the administration has been sued on how the tariffs have been administered (see 2601280033).

"And if the Supreme Court rules against them on IEEPA, they’ll really have to fix this."

Moreover, Chapter 73, that includes pipes and tubes, is now tariffed in this way, which he said will lead to Korean oil pipes being more competitive for new pipelines than domestic pipes.

From March to June in Chapter 73, the entire ad valorem value was subject to 50% tariffs, he said. That treatment should return.

And for items on the derivatives list in chapters 84 and 85, the government should set a different tariff for each item, to make sure they aren't cheaper to import than domestic products.

"Tariffs are not one-size-fits-all," Benoit said. "Fifty percent can be quite protective on one item. But 100% on [Chinese] syringes did nothing."

Capital Forum's Teddy Downey asked Benoit why there hasn't been as much revitalization of manufacturing as the administration had hoped.

Benoit said GM is moving production of the Buick Envision back from China, and Stellantis is moving Silverado production to the U.S.

"On automotive, they’ve done pretty well there," he said. Preliminary data from the Bureau of Labor Statistics says employment in automotive manufacturing is down 27,600 from December 2024 to December 2025.

Benoit praised the U.K. deal for instituting a 94,000 vehicle tariff rate quota, which he said was 2,000 below the previous year's sales. He complained that Japan, Korea and Europe face no caps, and only a 15% rate.

He complained about domestic aluminum producers, whom he said are charging a 50% premium even on domestic supply. "Our domestic automakers are paying the 50% tariff, and then we let vehicles come from Korea and Europe at 15%. They’re paying a fraction of the primary metal costs. There’s a word for that, and it’s called tariff inversion," he said.

Benoit said the USMCA should be rewritten to avoid the rules of origin, which he said "never work," and instead, go to quotas around the world, with more generous terms for Mexico and Canada.

He said Mexico should be told they can only sell 2 million cars in the U.S. every year, and you won't have to worry about Chinese infiltration, because Mexico will want to preserve that access for its own industry.

"So simple," Benoit said.