After being found illegal, why was Trump able to announce an additional 10% global tariff? Does he still have the authority?

According to CCTV News, on February 20th local time, U.S. President Trump stated that he will sign an order to impose an additional 10% tariff on global goods, based on the existing conventional tariffs already levied, pursuant to Section 122 of the U.S. Trade Act of 1974.

That day, the U.S. Supreme Court announced a ruling that the Trump administration’s large-scale tariff policy invoked under the International Emergency Economic Powers Act (IEEPA) was unlawful. Subsequently, Trump made the above statement at a press conference.

He also clarified other potential avenues for tariffs during the press conference, including Section 232 of the Trade Expansion Act of 1962, Section 201 and Section 301 of the Trade Act of 1974, and Section 338 of the Tariff Act of 1930.

U.S. Trade Representative Griell also stated that tariffs based on Section 122 will be implemented and signed today. At the same time, investigations under Section 301 are legally persistent.

Duming, Vice Dean of the Faculty of Law at Durham University in the UK, a professor of transnational law and co-director of the Global Policy Institute, told First Financial that the Trump administration is “caught between a rock and a hard place” on tariffs and can only continue to show its cards.

He emphasized that the so-called immediately usable “Section 122” allows the U.S. government to impose tariffs of up to 15% on trading partners within 150 days. During this period, the Trump administration may also initiate more investigations into specific industries, such as “Section 301 investigations,” and should be cautious about the repeated use of Section 122. According to his review of the law, there are no clear prohibitions against “repeated use” of this section.

Why Announce an Additional 10% Global Tariff

Simply put, when the U.S. faces a severe trade deficit or significant, potentially uncontrollable depreciation pressure on the dollar in the foreign exchange market, the law allows the president to invoke Section 122. However, the temporary tariffs imposed under this section cannot exceed 15%.

Regarding the time limit, as previously mentioned, this tariff authority is temporary, lasting a maximum of 150 days. If an extension is needed, approval from Congress is required.

Experts and industry insiders interviewed by the media agree that, compared to other investigation-based legal provisions—such as the potentially year-long Section 301 investigation—the currently immediately available option is Section 122.

Duming told the reporter that after the Supreme Court ruling declared tariffs under IEEPA unlawful, the situation is that the U.S. has already reached trade agreements with many countries and regions. If no additional tariffs are imposed, the tariffs faced by those countries and regions with trade agreements may be lower than those without agreements. This would “break” the entire tariff policy structure of the Trump administration.

On the same day, U.S. Treasury Secretary Bostick stated that, according to the Department of the Treasury’s estimates, the tariffs imposed using Section 122, along with potential increases under Sections 232 and 301, could keep U.S. tariff revenue nearly unchanged by 2026.

George Washington University International Trade Law Professor Hillman said that if the Trump administration intends to implement the additional 10% tariffs under Section 122, it must declare that the U.S. is facing a “serious and significant international balance of payments deficit or imminent large-scale dollar depreciation.”

Duming explained to the reporter that, although extensions require congressional approval, “re-implementing” a new Section 122 is not necessary. This approach is certainly problematic, but there is room for loopholes.

Jason Furman, former chief economist of the Obama administration and chairman of the White House Council of Economic Advisers, and a professor at Harvard Kennedy School, recently told First Financial that he roughly expects U.S. tariffs to be lower by the end of 2026 than at the start.

Regarding whether “President Trump will always back down (TACO),” he said, “Overall, there are more cases where President Trump cancels threats and grants tariff exemptions than cases where tariffs are tightened.”

Furman explained that tariffs are relatively unpopular politically in the U.S. “The core economic issue in current U.S. political debate is price affordability, that is, the level of prices, and tariffs clearly impact this.”

Are there four more cards?

Besides Section 122, the Trump administration still has four tariff options: Section 232 of the Trade Expansion Act of 1962, known as “Section 232 investigation”; Section 301 of the Trade Act of 1974; Section 338 of the Tariff Act of 1930; and Section 201 of the Trade Act of 1974.

Currently, it is expected that one of the measures the Trump administration might take is to more broadly utilize the “Section 232 investigation,” which has already been used to impose tariffs on automobiles, steel, aluminum, copper, and timber.

At the same time, the Trump administration has launched “Section 301 investigations” into trade practices of countries like Brazil and may initiate more investigations.

Bostick also stated on the 20th that tariffs authorized under Sections 232 and 301 will be utilized.

However, regarding “Section 301 investigations,” experts and industry insiders interviewed by the media believe that the Trump administration will not immediately use this investigation, as it is time-consuming, requires congressional approval, and involves investigations that could take at least a year.

Section 338 of the Tariff Act of 1930 is another possible provision, though rarely used in recent years. It allows the U.S. government to immediately impose tariffs of up to 50% on entities that discriminate against U.S. trade, and can be used to respond to “unreasonable charges, taxes, regulations, or restrictions.”

In addition, compared to the Section 122 announced by Trump, “Section 201” is a more classic and commonly used trade protection tool. Simply put, it is a global emergency import relief mechanism, also known as safeguard measures.

Typically, the U.S. International Trade Commission (USITC) conducts investigations and makes damage determinations. The decision is directly made by the president without complex industry damage investigations. The tariff ceiling is not fixed and is decided by the president based on USITC recommendations, historically reaching 30%-50%. Its duration is up to 4 years, extendable to 8 years.

(Original source: First Financial)