WASHINGTON: President Donald Trump is likely to dust off a 1930 trade law largely forgotten for decades to back his new reciprocal US tariffs that will match other countries’ higher import taxes, trade and legal experts say.
Trump has said the new US tariff rates would take effect “almost immediately”, and Section 338 of the Trade Act of 1930 would give him a quick path to imposing them.
The law, threatened but never used to impose tariffs, appears only sporadically in government records. It allows the president to impose duties of up to 50 per cent against imports from countries that are found to discriminate against US commerce.
This authority could be triggered when the president finds that a country has imposed an “unreasonable charge, exaction, regulation or limitation”, that is not equally enforced upon all countries.
It also can be triggered by discrimination in custom duties or other fees, regulations or other restrictions that “disadvantage” US commerce.
Trump, who has long complained about the US charging lower tariff rates than most other countries, has said his new reciprocal tariffs would take effect almost immediately. The European Union’s 10 per cent autos tariff, four times the 2.5 per cent US passenger car rate, is a particular sore spot for the president.
“I think that is exactly the path that they’re going to follow,” Dan Cannistra, a partner in the Crowell & Moring law firm, said of Section 338.
“They’re going to tell the EU: ‘You’re giving Korea zero per cent on cars, you’re giving 10 per cent to the US. You’re discriminating against us.”
FAST-ACTING
Trade tools that Trump used in his first term would take longer to impose tariffs, including the Section 232 national security statute for steel and aluminium and the Section 301 unfair trade practices law for Chinese imports. These require investigations and public comment, which can take months.
So far in his new term, Trump has favoured tools that allowed immediate action on tariffs. These included a first-ever use of the International Emergency Economic Powers Act to impose tariffs – 10 per cent on Chinese goods and a March deadline for 25 per cent tariffs on Mexican and Canadian goods over fentanyl and border security.
