President Donald Trump's use of the International Emergency Economic Powers Act (IEEPA) to enact his sweeping "retaliatory" tariffs (see 2504020086) has drawn serious speculation about whether the statute can serve as a proper basis for invoking the tariffs. Trade lawyers told us that potential issues arising from the use of IEEPA include the existence of tariff-making authority to address trade deficits under Section 122 of the Trade Act of 1974, the "major questions" doctrine and the way in which the tariffs were calculated.
A former Trump trade negotiator, Kelly Ann Shaw, described as "one of the key architects of the Administration’s trade, investment, energy and national security policies" in Trump's first term by her current law firm, said the reciprocal tariffs announced April 2, based on goods trade deficits, are not the same tariffs that will be in place weeks, months or years from now.
The U.S. will impose additional 10% tariffs on most imports, but not on Mexican and Canadian goods, information goods like books, music or films, or any goods either subject to Section 232 tariffs or among goods that Trump is considering protecting under Section 232, including pharmaceuticals, copper, lumber, semiconductors, certain critical minerals, and energy and energy products.
The U.S. Trade Representative has published its annual trade estimate, almost 400 pages of tariff and non-tariff barriers in countries around the world. The report noted, "The estimates included in this report constitute an attempt to quantitatively assess the potential effect of removing certain foreign trade barriers to particular U.S. exports. However, the estimates cannot be used to determine the total effect on U.S. exports, either to the country in which a barrier has been identified, or to the world in general. In other words, the estimates contained in this report cannot be aggregated in order to derive a total estimate of gain in U.S. exports to a given country or the world."
Trade facilitation appears to be taking a back seat to trade enforcement, based on recent actions taken by President Donald Trump and the Department of Government Efficiency to streamline federal operations, said a trade attorney during a March 26 webinar on tariffs and recent trade actions sponsored by Venable.
Groups that represent importers, carriers and ports are asking the Office of the U.S. Trade Representative to rethink its remedies for Chinese dominance in shipbuilding, arguing that imposing fees on most ships bringing imports to U.S. ports will drive up prices, increase port congestion and devastate the business of smaller ports.
Apparel importers and retailers don't have much favor in this administration, but groups representing their interests tried to appeal to the Office of the U.S. Trade Representative's logical side in comments requested by the agency on the reciprocal tariffs slated for April 2. The trade group representing the greatly diminished domestic textile and apparel industry, in contrast, said reciprocal tariffs could be used to recoup $100 billion in annual lost sales.
The Commerce Department hinted at the potential for a future free trade agreement with Britain in a press release on March 19.
Nearly 750 organizations and businesses gave input to the administration on trade barriers or subsidies that prevent them from reaching their sales potential.
Although the "system is broken," the U.S. should "unequivocally" stay in the World Trade Organization, said Maria Pagan, former deputy U.S. trade representative to Geneva.