Presidential Tariff Powers and the Need for Reform

This approach to US tariffs changed dramatically following the disastrous Trade Act of 1930, better known as the Smoot-Hawley Tariff Act after its sponsors Rep. Willis C. Hawley (R‑OR) and Sen. Reed Smoot (R‑UT). The act was signed by President Herbert Hoover in June 1930 over the objection of virtually every prominent economist at the time; it became the largest tariff hike in US history, inflicted serious damage to the US economy and international relations, and vividly demonstrated the shortcomings (and outright corruption) of congressional tariff-setting.¹

In response, Congress delegated large amounts of its international economic authority to the executive branch in 1934 and through subsequent laws, under the prevailing assumption that the president was far less likely than Congress to be influenced by parochial interests and rent-seeking lobbyists—and thus far less likely to repeat Smoot-Hawley. For about 85 years, this bipartisan approach proved successful: major tariff hikes and trade wars were avoided and international trade flourished.

That changed with the 2016 election of Donald J. Trump.

Upon taking office, President Trump used the powers granted to him by Congress to take a series of unilateral actions that radically upended US international economic policy. Most prominently, Trump imposed national security tariffs on imported steel and aluminum from virtually every country—including longstanding allies—and hiked tariffs on more than half of all goods from China, which was at that time the United States’ largest import supplier.

Although the Biden administration promised to turn the page on its predecessor’s unilateralism, it instead repeatedly defended the Trump administration’s tariffs—and the broad authority Congress delegated to the executive branch—in court. President Biden also maintained most of the tariffs in original or modified form. The administration has even increased some of the China tariffs, citing the same laws and regulations that Trump abused in 2018.

In his 2024 presidential campaign, former President Trump has promised even more aggressive unilateral protectionism in the future. In particular, Trump has promised an across-the-board 10–20 percent tariff on all imports from every country and a 60 percent tariff on all imports from China; he claimed in September 2024 that he could do so without congressional approval.² Economists and other trade policy experts have warned that such tariffs would harm both the US economy and the country’s foreign policy.³ However, some have sought to temper these concerns by confidently noting that practical and legal constraints would prevent a future President Trump from enacting broad tariffs without congressional consent.

As this paper explains, such confidence is mostly misguided. Several US laws provide the president with vast and discretionary authority to unilaterally impose sweeping trade restrictions, and no institution—not Congress, not domestic courts, not US international agreements—provides a quick, surefire check on such actions. Thus, while the durable implementation of broad and damaging US tariffs is not guaranteed, its risk—and related economic and geopolitical risks—will remain real and substantial until US law is changed to limit presidential tariff powers. We therefore recommend Congress enact such amendments immediately.

As detailed in this section, several US laws authorize the president to impose tariffs on a wide range of imported goods without substantial procedural or institutional safeguards on their use. One can reasonably argue that Congress did not intend for a president to use these laws as Donald Trump is now promising, but their broad and ambiguous language could let a future president plausibly claim otherwise.⁴

The International Emergency Economic Powers Act of 1977 (IEEPA) is an outgrowth of the Trading with the Enemy Act of 1917 (TWEA).⁵ TWEA was reformed to limit its use to times of war while Congress simultaneously passed IEEPA, which grants the president wide discretionary authority to address “unusual and extraordinary” peacetime threats to national security, foreign policy, or the economy from a “source in whole or substantial part outside the United States.”⁶

Presidents have utilized IEEPA authorities to implement US embargoes and sanctions; past uses have included blocking exports to and imports from Nicaragua, blocking Iranian transactions in response to the 1979 hostage crisis, and blocking transactions and property acquisitions made by individuals deemed to be bad actors (e.g., traffickers of narcotics and illicit diamonds, as well as human rights abusers).⁷

IEEPA is subject to a few important procedural requirements. The president may exercise discretionary authority under the IEEPA only if they have declared a national emergency under the National Emergencies Act (NEA). IEEPA also requires the president to consult with Congress in every possible instance before taking action. Concurrent with the declaration of a national emergency pursuant to the NEA and the exercise of IEEPA authority, the president is also required to report to Congress on the necessary actions taken, the countries targeted by the actions, and other details. Unlike other US trade laws, however, IEEPA does not require the executive branch to conduct an investigation or issue a report prior to taking action.

Although President Nixon utilized TWEA to impose a 10 percent tariff on all imports in 1971, to date, no president has invoked IEEPA to impose tariffs. In May 2019, however, President Trump announced his intention to invoke IEEPA to impose tariffs on imports from Mexico to ostensibly deal with illegal border crossings. About a month later, President Trump rescinded that threat, but various experts had opined that the law, while not intended to implement such an action, could arguably permit it.⁸

In sum, IEEPA confers wide discretionary authorities to the president to restrict international commerce on ostensible national security grounds or to advance foreign and economic policy goals. Aside from minor reporting and consultations with Congress, moreover, the only serious check on IEEPA authority is the requirement that the president declare an emergency pursuant to the NEA, which can be done at any time.

Section 232 of the Trade Expansion Act of 1962 was passed during the height of the Cold War and authorizes the Commerce Department’s Bureau of Industry and Security—in consultation with the Department of Defense—to investigate whether the importation of a particular product threatens the national security of the United States.⁹ If affirmative, the president has virtually unlimited authority to restrict imports to address the national security threat.

Commerce can self-initiate Section 232 investigations, or open them at the request of the president, the head of a federal agency, or an interested private party. In making its determination, Commerce investigates whether an article (defined as any commodity, whether grown, produced, fabricated, manipulated, or manufactured) is “being imported into the United States in such quantities or under such circumstances as to threaten to impair national security.” The Commerce secretary has 270 days to issue a report making this determination. If the secretary determines that imports threaten national security, they recommend actions to the president to adjust the imports of the article to remedy the threat. If the president agrees with the secretary, then the president must determine the “nature and duration” of the import adjustment within 90 days of receiving the report and must act within 15 days thereafter if deciding to impose import restrictions.¹⁰ Importantly, “national security” is not defined in the statute nor is there any time limitation on the remedy chosen.

Between its enactment in 1962 and the Trump administration, Section 232 was used sparingly, and investigations were largely technocratic matters focused on a narrow set of products and countries. Indeed, from 1995 when the US joined the World Trade Organization (WTO) to 2017, there were only two Section 232 investigations (crude oil in 1999 and semifinished steel in 2001). In both instances, both the Bureau of Industry and Security and Commerce declined to find that importation of the products at issue threatened national security.¹¹

In 2017, President Trump ordered Commerce to investigate whether a wide range of imported steel and aluminum products threatened US national security under Section 232. Although Secretary of Defense James Mattis noted that the US military required only 3 percent of domestic steel and aluminum production and warned against global tariffs,¹² Commerce nevertheless issued reports finding imported steel and aluminum to jeopardize national security by weakening the domestic industries’ productive capacity.¹³ Shortly after receiving the reports, President Trump imposed 25 percent tariffs on imported steel and 10 percent tariffs on imported aluminum from all countries except Australia. The administration subsequently exempted imports from Canada and Mexico (following their retaliation against US exports), doubled tariffs on Turkish steel, and expanded the remaining tariffs to cover downstream derivative products such as steel nails. Since 2018, the Trump and Biden administrations have replaced tariffs on imports from certain jurisdictions (e.g., South Korea and the EU) with quotas of varying restrictiveness.

In sum, Section 232 grants the president wide discretion to initiate an investigation and then impose trade restrictions such as tariffs on a certain category of products. A global tariff against all imports might therefore require a separate investigation and report for each product at issue, though the scope of such cases could still be quite broad. Aside from that limitation, Section 232 provides virtually no substantive or procedural checks on the president’s authority to impose security-based trade restrictions.

Section 301 of the Trade Act of 1974 grants the US Trade Representative (USTR) the authority to investigate and attempt to remedy “unfair” foreign trade practices through the use of tariffs and other trade restrictions.¹⁴ Such unfair foreign trade practices can encompass violations of US trade agreements and/​or acts, policies, or practices of a foreign country that are unjustifiable or unreasonable and burden US commerce, including market access restrictions or other hurdles to US exports. The USTR can self-initiate a Section 301 investigations or can open an investigation because of a petition from an interested party. Unlike Section 232, Section 301 is country-specific and requires an investigation and report by USTR.

USTR—and by extension the president—is authorized to take two types of action under Section 301, mandatory and discretionary:

• Section 301(a) establishes that the USTR must take action if unfair practices are found to exist, with limited exceptions. For these “mandatory” actions, US trade restrictions must be equivalent in value to the burden or restriction being imposed by that country on US commerce.
• Section 301(b) provides “discretionary” authority by which the USTR—and by extension, the president—may take action if an act, policy or practice of a foreign country is found to be unreasonable or discriminatory and burdens US commerce. Under discretionary actions, the USTR is not bound by a requirement that the US restriction be equivalent in value to the burden or restriction imposed on US commerce by the country targeted. Indeed, the USTR has discretionary authority to take “all appropriate and feasible action, subject to the specific direction of the president, to obtain the elimination of the act, policy, or practice.”¹⁵ Thus, the law permits massive trade restrictions in response to minor trade offenses.

Section 301 further requires the USTR to request consultations with the foreign country accused of unfair trade practices while an investigation into these practices is initiated, but these discussions may be perfunctory. If the actions in question potentially violate a trade agreement (e.g., the WTO Agreements) and cannot be resolved through consultations, the USTR must quickly seek formal dispute settlement under that agreement. Importantly, however, the USTR has plenary discretion to determine whether an issue falls under a US trade agreement and may act unilaterally when concluding otherwise.

The duration of Section 301 trade restrictions is similarly open-ended. As long as any representative from the domestic industry benefiting from the action requests its continuation every four years, the action can be extended following a USTR review. The decision to terminate such actions rests solely with the USTR, who can determine whether the restrictions are no longer appropriate.

Section 301 was heavily utilized during the 1980s to investigate and respond to allegedly “unfair” foreign trade practices but it fell out of favor in the mid-1990s with the creation of the WTO and its binding dispute settlement system. The Trump administration reinvigorated the law with several new investigations, most notably one targeting Chinese intellectual property practices. Following a seven-month investigation, the USTR published a report concluding that China employs a variety of unfair and aggressive tactics to obtain US technology and intellectual property to advance Beijing’s high-tech ambitions and strategic domestic industries.¹⁶ According to the USTR, these policies impede US exports; undermine American innovation, manufacturing, and services; create jobs in China at the expense of American workers; and mostly fall outside the WTO Agreements. The Trump administration therefore filed a narrow WTO dispute against China and proposed tariffs on around $50 billion on annual Chinese imports. Following a brief notice and comment period and unsuccessful negotiations with Beijing, the president implemented the initial (“List 1” and “List 2”) tariffs, and China immediately retaliated. Over the next several months, tit-for-tat tariffs by both parties would result in US tariffs ranging from 7.5 percent to 25 percent on approximately 67 percent of Chinese imports and Chinese tariffs on around 58 percent of US goods.¹⁷ The Biden administration has kept the Section 301 tariffs largely intact and utilized the existing Section 301 measure to impose 100 percent tariffs on Chinese electric vehicle imports and to hike tariffs on several other products.¹⁸

In sum, Section 301 contains some minor substantive and procedural checks, but it does grant the president wide discretion to address foreign economic policies by imposing tariffs or other trade restrictions on a very wide set of products imported from a targeted country or countries.

Section 338 of the Tariff Act of 1930 grants the president the authority to impose new or additional tariffs of up to 50 percent ad valorem on imports from countries that have “discriminated” against US commerce as compared to another foreign nation.¹⁹ Specifically, Section 338 allows the president to issue a proclamation to impose duties on imported goods from nations that apply “any unreasonable charge, exaction, regulation, or limitation” on US products that is not equally enforced on similar products from other countries, or discriminate against US commerce in a way that disadvantages it compared to the commerce of another foreign country. If a country continues to discriminate against US commerce, Section 338 enables the president to block imports entirely from entering the United States or to expand the trade restrictions to third-party countries that benefit from the discriminatory conduct of the primary target country. A private party or the executive branch may petition the US International Trade Commission (USITC) to initiate a Section 338 investigation.

There is a minor limitation to using the statute to impose new trade restrictions such as tariffs. The statute necessitates proof of discrimination against the United States in favor of other nations, which could be challenging when targeting countries that are WTO members bound by most-favored-nation requirements that restrict discrimination among members. The statute assigns an ambiguous role for the USITC to ascertain whether foreign discrimination exists and to report it to the president with a set of recommendations. Unilateral action by the president could trigger a legal challenge that argues the president does not have authority to impose trade restrictions under Section 338 without input from the USITC. Finally, invoking Section 338 to impose significant trade restrictions is almost certainly a violation of the United States’ WTO obligations and would be met with challenges.

To date, Section 338 has not been invoked to impose any trade restrictions, though “its use was threatened repeatedly in foreign policy exchanges in the mid-twentieth century.”²⁰ It has arguably been supplanted by Section 301 of the Trade Act of 1974, a statute with similar aims. Still, the statute remains on the books, confers wide authority to the executive branch, and could therefore be ripe for abuse by a protectionist administration.

Section 122 of the Trade Act of 1974 empowers the president to unilaterally address “large and serious” balance-of-payments deficits via import surcharges of up to 15 percent and/​or import quotas.²¹ These measures are limited to 150 days unless they are extended by an affirmative act of Congress, and any action under Section 122 must apply to every country. Temporary import quotas, including the ability to combine quotas with surcharges, may only be used where existing international trade or monetary agreements allow quotas as a balance-of-payments measure and where the fundamental imbalance cannot be effectively addressed through an import surcharge.

To date, Section 122 has not been invoked to impose trade restrictions, but a president could theoretically use it to unilaterally implement a 15 percent global tariff for 150 days.

Table 1 summarizes the aforementioned statutes.

Recent history indicates that domestic and international institutions might be unable or unwilling to check a broad unilateral tariff action implemented by the president pursuant to one or more of the aforementioned US laws.

Although both Republican and Democratic lawmakers have complained about tariffs imposed by Presidents Trump and Biden, Congress has taken no actions to reduce or eliminate the measures or to limit the tariff powers it has delegated to the president. Several members of Congress sponsored legislation to achieve such objectives, but the bills have garnered little support. Most notably, after President Trump imposed his national security tariffs on imported steel and aluminum, former Sen. Pat Toomey (R‑PA) and former Rep. Ron Kind (D‑WI) introduced the Bicameral Congressional Trade Authority Act to require congressional review and approval of any national security tariffs or quotas under Section 232 and to reform certain procedural and administrative aspects of the law. The bipartisan bill garnered several cosponsors but never received a floor vote in either chamber.

Sen. Mike Lee (R‑UT) and Rep. Warren Davidson (R‑OH) introduced the Global Trade Accountability Act in multiple Congresses, which would have required congressional approval of trade restrictions imposed under IEEPA, Section 232, Section 301, and other US trade laws. Both the House and Senate versions attracted cosponsors, but neither received a floor vote. The measures’ lack of movement in Congress likely says less about the body’s appetite for tariffs and far more about a simple institutional reality that stymies a reform effort, no matter its merits: Even if majorities of both chambers had approved a tariff bill, the sitting president would have vetoed it, and achieving the two-thirds majority to override that veto would have been almost impossible. In fact, recent reports regarding Trump’s proposed tariffs indicate that members of Congress are aware that this issue could limit their ability to stop future tariffs.²²

History also cautions against an assumption that US courts will check a future unilateral tariff action, particularly where national security and the president’s Article II powers are implicated. Some tariff opponents have downplayed this risk, but they presume an activist court that, in reality and based on recent precedent, could be reluctant to question presidential actions made for ostensible national security or emergency reasons.²³

Importers filed several lawsuits challenging the Trump tariff investigations and proclamations on procedural and substantive grounds, as well as on the constitutionality of trade laws purportedly authorizing them. The Trump and Biden administrations fought these challenges in court and have vigorously defended the president’s broad tariff powers under both Sections 232 and 301. And despite the appearance of significant procedural and substantive flaws surrounding the tariffs’ implementation, the courts have ultimately sided with the executive branch in every case thus far. The courts have proven especially deferential to tariff cases involving Section 232 and national security.²⁴

The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which overruled the Chevron Doctrine urging court deference to federal agency decisions, might provide a glimmer of hope for those who are skeptical of the president’s unilateral tariff powers, but caution and concern remain warranted. As Georgetown Law Center’s Kathleen Claussen and Duke School of Law’s Timothy Meyer note in a recent article, for example, the Biden administration has argued in a case that is now before the Federal Circuit that its decision to expand the Section 301 tariffs without a new investigation is subject to only limited review by the courts. Furthermore, recent precedent indicates that courts may be reluctant to circumscribe presidential tariff powers related to national security under Section 232 and emergencies under IEEPA. Indeed, the Supreme Court has refused to hear statutory and constitutional challenges to lower court decisions upholding the Section 232 steel and aluminum tariffs, as Table 2 summarizes.²⁵

In theory, the WTO could provide a check on the president’s discretionary authority to impose trade restrictions via its dispute settlement mechanism and the threat of WTO-approved foreign retaliation against American exports. Yet recent history suggests otherwise.

Several trading partners challenged the Trump administration’s Section 232 steel and aluminum tariffs at the WTO, arguing that such measures were inconsistent with US WTO obligations. The Biden administration defended the tariffs in those proceedings. Ultimately the United States lost the disputes but was undeterred by the rulings, both maintaining the tariffs and arguing that the nation “will not cede decision-making over its essential security” to WTO tribunals.²⁶ The US government also has refused to comply with earlier adverse WTO rulings on politically sensitive issues, such as trade remedies, internet gambling,²⁷ and cotton subsidies.²⁸

It is therefore highly unlikely that a US president would let a WTO ruling dissuade him from implementing a signature tariff policy, especially one that targets the United States’ largest peer competitor or addresses national security.

For more than 80 years, presidents largely avoided abusing the enormous unilateral tariff powers that Congress had delegated to the executive branch under several different laws. This changed as both Trump and Biden implemented broad tariffs on dubious grounds, and as Congress, the courts, and the WTO proved unable or unwilling to limit such measures. Americans have paid a steep price for those actions (and inaction).

The Supreme Court’s decision in Loper opens the door to more robust judicial checks on the future use of unilateral tariff authorities, but a wholesale, judicially enforced rebalancing is uncertain if not unlikely, particularly with respect to authorities invoked in the name of national security or national emergencies.

The only sure way to limit the risk of future unilateral tariffs therefore rests with Congress acting to reclaim some of its constitutional trade powers, and legislation has already been introduced to do so. This includes the Global Trade Accountability Act and new legislation from Sen. Rand Paul (R‑KY) that would, if enacted, require Congress to approve tariffs proposed by the president under the Tariff Act of 1930, the Trade Expansion Act of 1962, TWEA, IEEPA, laws that implement US trade agreements, and all other US customs and trade laws.²⁹ Although passing one of these laws would be a heavy lift, there may be a window to act after the November elections and before the 118th Congress adjourns—a time in which a lame-duck President Biden might be more willing to eschew a veto and sign a law that enacts an important reform that would not apply to him personally. Should Congress fail to act, US trade law will continue to be ripe for abuse that would cause enormous economic and geopolitical damage.