Trump faces difficulty in rebuilding tariff barriers: Democrats will block any attempt to extend tariffs

Trump faces difficulty in rebuilding tariff barriers: Democrats will block any attempt to extend tariffs

After last year’s Supreme Court reversal of most global tariffs, U.S. President Trump quickly invoked alternative legal tools in an attempt to rebuild lasting tariff barriers, but Democrats may not let him succeed.

On Monday the 23rd, Eastern time, U.S. Senate Democratic leader Schumer announced that Democrats would block any attempt to extend tariffs imposed by Trump under Section 122 of the Trade Act of 1974. This move puts the tariff system built in Trump's second presidential term at risk of collapse, as tariffs under Section 122 are set to expire this summer.

According to Xinhua News Agency, the U.S. Supreme Court recently ruled that the International Emergency Economic Powers Act (IEEPA) does not authorize the president to impose large-scale tariffs. On the day the ruling was announced (last Friday), Trump declared he would invoke Section 122 to impose a 10% global tariff as an alternative, and on Saturday said he would raise the tariff rate to 15%. However, this provision is limited to 150 days unless Congress approves an extension.

Schumer stated that Trump’s 15% global tariff would further drive up prices and make life unaffordable for millions of Americans. “Senate Democrats will continue to fight Trump’s tariffs and will block any attempts to extend these harmful tariffs when they expire this summer. Democrats will not condone Trump’s destruction of the economy.”

This expected stance will escalate confrontation between Trump and Congress and bring new uncertainties to the global trade landscape. Wallstreetcn previously mentioned that tariffs under Section 122 are subject to rate and duration limits, making it difficult to support the large-scale long-term tariff system Trump seeks.

Section 122: Limits of a Short-term Alternative

Last Friday, Trump announced a 10% global tariff, becoming the first U.S. president to impose tariffs under Section 122 of the Trade Act of 1974. This section allows the president to impose tariffs up to 15% for up to 150 days in case of a “large-scale and severe” balance of payments deficit.

The greatest advantage of this tool is that it can be implemented without advance investigation. Last May, when the U.S. International Trade Court ruled reciprocal tariffs illegal, it noted that if the president wants to address trade deficits through tariffs, Section 122 should be used rather than IEEPA.

However, the section has fatal flaws. The 15% cap and 150-day duration mean the tariffs can only be a short-term measure.

More critically, extensions require congressional approval, but Democrats have clearly stated they will block any extension. On Monday, Trump reiterated on social media that he has congressional authorization for tariffs, stating, “As president, I do not need to ask Congress to approve tariffs.” However, if he hopes to implement Section 122 tariffs for the long term, this claim contradicts the relevant legal provisions.

15% Tariff Aims to Maintain Existing Trade Agreements

CCTV News pointed out that Trump’s 15% tariff increase actually aims to maintain the existing tariff level. The tariff level in trade agreements signed with the EU, Japan, South Korea, Middle Eastern countries, etc. is exactly 15%.

These countries and regions were threatened by Trump’s high tariffs and would invest billions or even trillions in the U.S. If the 15% tariff level cannot be maintained, their promised investments may be nullified as tariffs are removed.

CCTV noted that on Sunday the 22nd, U.S. trade representative Greer emphasized in a media interview that the government had found a way to “rebuild” punitive reciprocal tariffs and said that the trade agreements with the EU, UK, Japan, and other partners remain effective. This means that the Trump administration is attempting to use new legal tools to maintain the terms of previously signed trade agreements.

CCTV believes that in order to uphold “America First” and the so-called “tariff war political legacy,” Trump will use every means and tool necessary to maintain the original high tariffs. It is possible that Trump will rely on other provisions like “Section 301” or “Section 232” to continue promoting his tough trade policies.

Besides Section 122 of the Trade Act of 1974, Trump has at least four alternatives to IEEPA, but all impose more restrictions.

Section 232 of the Trade Expansion Act of 1962 is the most relied-upon tool for Trump in both terms. It authorizes the president to impose tariffs for national security reasons on imported goods without limits on rates or duration. But it cannot be immediately implemented; the Commerce Department must first investigate and submit a report to the president within 270 days. This section covers specific industries, not whole countries, so it is less comprehensive than IEEPA.

Section 301 of the Trade Act of 1974 was Trump’s legal basis for the U.S.-China trade conflict in his first term. It authorizes the U.S. Trade Representative to impose tariffs on trade measures deemed discriminatory against American companies, without a cap on rates. Its limitation is procedural complexity: investigation, consultation with foreign governments, and public input are required. Tariffs expire automatically four years after taking effect.

Section 201 of the same act authorizes the president to impose tariffs if increased imports threaten U.S. manufacturers, but with a tariff cap at 50% above the current rate, an initial duration of four years, and a requirement for gradual reduction if implemented for more than one year.

The most controversial is Section 338 of the Smoot-Hawley Tariff Act of 1930, which has never been used to impose tariffs. Historians and economists generally believe this act limited world trade and worsened the Great Depression. Five Democratic representatives proposed abolishing this provision last March.

Long-term Uncertainty for Global Trade

The frequent adjustments in U.S. tariff policy have disrupted international trade order. CCTV noted that after Trump’s tariff increases under IEEPA were ruled unconstitutional by the U.S. Supreme Court, the foundation collapsed. He immediately imposed 10% tariffs on all imports under Section 122, then quickly raised it to 15% within 24 hours, leaving many nations uncertain.

CCTV believes that frequent tariff adjustments have caused unprecedented “diplomatic deadlock” for the U.S. government and damaged trust among allies. The EU and India have announced freezes or suspensions of trade agreements and negotiations with the U.S. Tariffs ranging from 10% to 50% have been imposed on other countries; even if rates fluctuate wildly in 24 hours, the fundamental goals cannot be achieved.

If Trump continues to push for tough trade policies under more legal provisions, it will raise tariff and non-tariff barriers, suppress international trade, and diminish companies’ willingness to invest. This uncertainty leaves business leaders indecisive about whether to invest, localize, or internationalize.

The U.S. Customs and Border Protection previously stated it would stop collecting IEEPA-based tariffs starting Tuesday, February 24, Eastern time. But how the previously collected tariffs, totaling hundreds of billions of dollars, will be handled remains unknown.

Last Friday, Trump indicated he would not refund IEEPA-based tariffs and expects any possible refunds will be delayed for years by litigation. Last Sunday, Treasury Secretary Besant refused to speculate on possible refunds to companies, leaving the decision to lower courts.

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