Trump considers new national security tariffs following Supreme Court ruling - WSJ

Trump considers new national security tariffs following Supreme Court ruling - WSJ

Trump Considers New National Security Tariffs Amid Legal Uncertainty

Following the U.S. Supreme Court's invalidation of President Donald Trump's global tariffs under the International Emergency Economic Powers Act (IEEPA), the administration is reportedly evaluating new tariffs under Section 232 of the Trade Expansion Act of 1962, which authorizes measures to address threats to national security according to reports. These proposed tariffs could target industries such as large-scale batteries, industrial chemicals, power grid equipment, and telecommunications infrastructure, according to sources cited by the Wall Street Journalas reported.

The Supreme Court's 6-3 ruling on February 20 clarified that IEEPA does not grant the president authority to impose tariffs, emphasizing that Congress retains constitutional control over taxation and trade policy as detailed. In response, Trump swiftly imposed a 10% tariff on all imports under Section 122 of the Trade Act of 1974, later raising it to 15% according to reports. However, Section 122 tariffs are temporary, expiring in 150 days unless extended by Congress—a politically uncertain prospect as noted.

The proposed Section 232 tariffs differ from the broad IEEPA measures, focusing instead on specific sectors deemed critical to national security. While Section 232 allows for indefinite tariffs without congressional approval, its application to industries like batteries and chemicals may face legal challenges. Critics argue that the statute's "national security" rationale is expansive and subject to judicial scrutiny, as highlighted in the Court's IEEPA decision according to analysis.

The administration's shifting tariff strategy has created uncertainty for businesses and trading partners. Importers previously subject to IEEPA tariffs may now seek refunds for duties collected in 2025, estimated at over $200 billion. Meanwhile, Trump's ongoing trade negotiations with countries like China, Mexico, and the U.K. could be affected, as partners reassess the credibility of U.S. tariff threats as reported.

Economists note that the average effective tariff rate remains elevated at 13.7%, up from 9.1% without IEEPA tariffs, potentially exacerbating inflationary pressures according to analysis. While the administration frames these measures as necessary for economic and security interests, the legal and political risks of further litigation remain significant.

As the administration navigates these complexities, markets will closely monitor whether the new tariffs withstand judicial review and how they impact global trade dynamics.