Goldman Sachs: After the US Trade Court vetoes large-scale tariffs, Trump can still restart in four legal ways

The Zhitong Finance App learned that according to Goldman Sachs analysis, although the US Trade Court vetoed the Trump administration's large-scale tariff measures, the White House still has other legal ways to impose tariffs on trading partners.

Alec Phillips, the bank's chief political economist in the US, pointed out that the Trump administration has four ways to implement tariff measures similar to those vetoed by the courts.

First, “The government can quickly replace the current comprehensive tariff of 10% with a similar tariff of up to 15% in accordance with section 122. These tariffs can only last for up to 150 days. After that, according to the law, the National Assembly is required to take action to extend them.”

Phillips said that the law does not clearly stipulate whether these tariffs can be suspended and then restarted, but the law authorizes the president to “deal with balance of payments deficits or prevent the impending sharp depreciation of the US dollar without any formal investigation or procedure. Therefore, if theoretically necessary, the government can replace the current 10% tariff with a tariff based on section 122 within a few days.”

Second, “the US Trade Representative can quickly launch a Section 301 investigation against major trading partners (due to “unfair trade practices”) to lay the procedural foundation for imposing tariffs after the investigation is completed.” He said that although there is no clear rule on the duration of the tariffs, the investigation may take several weeks.

Third, “President Trump has used Section 232 to impose tariffs on steel, aluminum, and automobiles based on national security reasons. This practice can be further extended to other industries. We expect more industries to face tariffs (such as pharmaceuticals, semiconductor/electronics, etc.), and there is uncertainty about tariffs based on the International Emergency Economic Powers Act (IEEPA), which may cause the White House to rely more on industry tariffs, as there is much less legal uncertainty.”

Fourth, “Section 338 of the 1930 Trade Act allows the President to impose tariffs of up to 50% on imported goods from countries that discriminate against the United States. This power has never been used, similar to the Section 301 authorization, except that it limits the amount of customs duties and requires no formal investigation.”

Phillips said that the White House is likely to first implement similar comprehensive tariffs under section 122, and then use section 301 to investigate major trading partners.

He said, “However, it seems unlikely that the government will complete the Section 301 investigation of all US trading partners within the next few months. If the court's ruling on tariffs based on the International Emergency Economic Powers Act (IEEPA) remains in effect, this means that when the tariffs under section 122 expire after 150 days (assuming the Trump administration cannot find a legal way to extend these tariffs), smaller trading partners and/or countries with small trade surpluses with the US may not need to face benchmark tariffs.”