President Donald Trump is confronting legal challenges regarding his tariffs for the first time, as a federal appeals court deliberates whether to impose a stay on the universal tariffs he enacted under the International Emergency Economic Powers Act of 1977 (IEEPA).
Last month, the U.S. Court of International Trade ruled that these tariffs were unlawful, marking a significant ruling against the president’s trade policies.
The IEEPA, a statute typically associated with national security, grants the president the authority to control economic transactions upon declaring a national emergency.
In an unprecedented move, President Trump invoked emergencies at both the northern and southern U.S. borders linked to the opioid crisis and migration flows to impose tariffs on Canada and Mexico, respectively.
He subsequently declared another emergency regarding trade deficits, introducing what he termed “Liberation Day” tariffs on most countries.
However, the trade court contended that Trump overstepped his presidential powers by employing the IEEPA to broadly enforce these tariffs.
In response to the ruling, the Trump administration swiftly appealed the decision and stated its intention to take the case to the Supreme Court.
Following the ruling, Kevin Hassett, Director of the White House Economic Council, expressed confidence that the court will ultimately side with Trump.
He indicated that if the appeals do not go in their favor, “we’ll have other alternatives that we can pursue as well to make sure that we make American trade fair again.”
While the U.S. Constitution grants Congress the authority over taxes and tariffs, experts suggest that Congress has passed laws over the past century that also provide the president some control under certain conditions.
As a result, Trump is now contemplating leveraging those laws, some of which he may use for the first time.
One option under consideration is Section 338 of the Tariff Act of 1930, which permits the president to impose tariffs of up to 50 percent if a country is treating U.S. products unfavorably compared to those from another nation.
However, according to Greta Peisch, who previously served as the general counsel for the Office of the U.S. Trade Representative, this section has never been invoked by a president before and it may prove challenging for the current administration to substantiate a case under it.
Another possible avenue is Section 301 of the Trade Act of 1974, which enables the president to take trade actions if an investigation reveals that a trading partner’s practices are unreasonable and discriminatory.
This statute was utilized by Trump during his first term to impose tariffs on specific Chinese imports as well as goods from the European Union.
Nevertheless, Section 301 necessitates thorough, country-specific investigations of trade policies, a process that could stretch over several weeks or months and includes a public comment period.
Thus, this would delay Trump’s ability to swiftly impose tariffs on countries around the world.
If the president seeks a more expedited process, he might look to Section 122 of the Trade Act of 1974, another statute that has yet to be employed.
This section allows for tariffs of up to 15 percent to address significant United States balance-of-payments deficits, but these tariffs are limited to 150 days and require subsequent Congressional approval to remain in place.
This limitation could hinder Trump’s leverage if his objective is to compel countries into trade agreements, as they could potentially wait out the administration’s temporary measures.
Additionally, Trump has suggested that tariffs could help in reducing the deficit, but the short-term nature of Section 122 power may not serve as a viable long-term revenue generation strategy.
Ultimately, experts assert that none of the alternative statutes present a straightforward solution that would enable Trump to achieve his goal of erecting a universal tariff wall around the United States.
“Nothing is a great fit without a lot of work,” Peisch remarked, emphasizing the potential difficulties that lie ahead for the administration.
This report by The Canadian Press was first published on June 7, 2025.
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