The U.S. Customs will officially stop collecting the "Liberation Day" tariffs imposed by Trump starting from Tuesday, while the newly proposed temporary 15% tariff by Trump has not yet taken effect. The impact of the reversal in tariff policy is shifting from "assumption" to "reality": the EU is preparing to delay the approval process of the U.S.-Europe trade agreement, waiting for more detailed information from the U.S. on next steps, adding new uncertainties to the hard-won trade negotiations. In addition, after Trump introduced a new 15% global tariff, although some countries faced lower tariffs, a few countries actually saw their tariff rates rise, especially the UK and Australia.
After the Supreme Court overturned the tariffs imposed by Trump under the International Emergency Economic Powers Act, he then introduced a new 15% global tariff based on Section 122 of the Trade Act of 1974. However, this tariff policy may also face legal challenges because the Supreme Court recently emphasized in its ruling that it limits the president's power to use tariffs as a major source of revenue without congressional authorization. But new legal disputes will take a considerable amount of time—possibly a year or longer—to resolve, which means consumers, businesses, and U.S. trade partners will continue to face uncertainty. According to researchers at the Peterson Institute for International Economics, Section 122 allows limited and temporary "import restriction measures" when necessary to address a "serious and significant" international balance of payments deficit in the United States. Plaintiffs challenging Trump's new tariffs may question whether the U.S. really had an "international balance of payments deficit" in 2026 according to the understanding of the 1974 definition. In 1974, an "international balance of payments deficit" did not equate to a goods trade deficit, which is the core focus of Trump. Before August 1971, when Nixon ended the link between the dollar and gold, an "international balance of payments deficit" was typically understood as the U.S. exporting gold to foreign central banks. For several years afterward, the term generally referred to the U.S. supporting the dollar exchange rate through official intervention. Section 122 allows temporary import restrictions to "prevent a significant devaluation of the dollar in the foreign exchange market"—but there is currently no clear evidence that the U.S. is facing this issue, and even Bensons stated that the government pursued and achieved the goal of a "strong dollar." Section 122 also states that limited and temporary import restriction measures can be used "to cooperate with other countries to correct imbalances in the international balance of payments"—and there is currently no such international cooperation. Therefore, whether it is Section 122, or Sections 338, 232, or 301, if used as the basis for imposing new tariffs, they all have significant limitations. And the Supreme Court's ruling also means that if Trump uses these laws as a tool to significantly increase fiscal revenue through tariffs rather than targeting unfair practices by specific foreign countries, he will face serious legal challenges.
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Original article: toutiao.com/article/1857971752501770/
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