Trade Experts: Trump’s New Tariffs Illegal Due to Non-Existent Balance-of-Payments Deficit
Following the Supreme Court’s rejection of his global tariffs, President Trump enacted new levies under Section 122 of the 1974 Trade Act. However, trade experts contend that this legal basis is also invalid, as the statute requires a “large and serious” balance-of-payments deficit, a condition the U.S. does not currently meet due to its flexible exchange rate and capital account surplus. This move is seen as a temporary measure while the administration initiates investigations under Section 301 and potentially considers tariffs under Section 232, creating continued trade uncertainty.
John Q. Hosedrinker