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U.S. President Donald Trump warned trading partners not to use the Supreme Court\u2019s recent decision invalidating his emergency tariffs as a reason to renegotiate trade agreements, insisting he could impose \u201cfar worse\u201d terms using other legal powers.<\/p>\n
Several governments have reached deals with the Trump administration that cut U.S. tariffs in exchange for investment commitments and lower barriers for U.S. imports. Yet Friday\u2019s Supreme Court ruling wiped out tariffs imposed under the International Emergency Economic Powers Act (IEEPA), removing the main incentive for several of those agreements. Trump\u2019s new universal tariff of 10%, imposed under a different process, complicates things further.<\/p>\n
At his State of the Union address on Feb. 24, Trump called the Court\u2019s decision \u201cdisappointing\u201d and \u201cunfortunate,\u201d but claimed that \u201calmost all countries and corporations want to keep the deal that they already made,\u201d adding that the \u201clegal power that I as president have to make a deal could be far worse for them.\u201d<\/p>\n
Trump\u2019s remarks underscore the dilemma now facing U.S. trade partners, some of whom unveiled agreements just a few weeks ago. (Indonesia, with particularly unlucky timing, unveiled its agreement on Feb. 19, the day before the Court\u2019s ruling). Governments spent months hammering out accords with Washington, sometimes making politically unpopular concessions and promises to get a deal over the finish line.\u00a0<\/p>\n
Countries could try to suspend or renegotiate their trade deals, but that risks provoking higher tariffs from an angry White House. Or they can keep the agreements in place\u2014even if that means their goods will get higher tariffs than other countries\u2014and yet still be at risk of new tariffs from Trump anyway.<\/p>\n
\u201cIt is highly likely that trade deals currently under negotiation will be put on ice,\u201d says Eswar Prasad, a professor of international trade policy at Cornell University. \u201cPresumably, no U.S. trading partner would want to make concessions that carry both economic and domestic political costs without any clarity about whether the deals will stick or be overridden by a new tariff regime.\u201d<\/p>\n
Some governments may choose to keep what gains they\u2019ve already won from Washington. \u201cCountries that received specific carve?outs on important sectors, especially for autos, auto parts, trucks, and truck parts\u2014like Japan, South Korea, the E.U., and possibly the U.K.\u2014will probably not be keen to invalidate their existing deals, because they see them as a key deliverable that matters,\u201d Deborah Elms, head of trade policy at the Hinrich Foundation, points out.\u00a0<\/p>\n
But even if governments do not publicly renounce these agreements, they can quietly slow their implementation on conditions like transshipment and deregulation. \u201cNone of these deals are actually in force,\u201d Elms notes. \u201cThey only come into force after both parties certify that they are in force. That could be some period of time away.\u201d<\/p>\n
For now, most countries are adopting a wait?and?see approach to U.S. trade policy. India has postponed trade talks to \u201cstudy the implications\u201d of the Supreme Court ruling. Japan and South Korea, which already have agreements in place, say they are monitoring developments, while Indonesia stressed that its deal has yet to be ratified.<\/p>\n
Beijing said it would conduct a \u201cfull assessment\u201d of the decision and urged Washington to remove what it called \u201cunilateral\u201d tariffs. Trump is scheduled to visit China on March 31 to April 2.<\/p>\n
\u201cChina will almost certainly toughen its stance in forthcoming trade negotiations with the U.S., as Trump\u2019s tariff weapon has now been weakened and blunted,\u201d Prasad says. \u201cBeijing is no doubt strategizing about how to use this ruling to its advantage while not overplaying its hand.<\/p>\n
Even after the Supreme Court\u2019s ruling, Trump retains significant authority to impose tariffs under other statutes. On Tuesday, a universal 10% tariff under Section 122 of the 1974 Trade Act took effect; this provision allows the president to impose duties without Congressional approval for up to 150 days to address balance?of?payments problems. Trump has already signaled that he plans to raise that rate to 15%, the legal maximum.<\/p>\n
\u201cWe foresee ever higher complexity in terms of U.S. trade policy,\u201d William Bratton, head of cash equity research, APAC at BNP Paribas, wrote in a Monday note. \u201cIt is likely that the IEEPA tariffs will be replaced by an increasing patchwork of various tariffs targeted at specific countries and product groups.\u201d<\/p>\n
Elms is particularly concerned about two tools: Section 232 tariffs, which allow the president to tax imports deemed vital for national security, and Section 301 tariffs, which permit tariffs in response to unfair trade practices. These authorities provide alternative, if slower, pathways for the administration to impose new taxes on U.S. imports.<\/p>\n
The Trump administration has applied a broad definition of \u201cnational security,\u201d covering products ranging from steel and aluminum to critical minerals. \u201cI imagine the Trump administration will, in the next 150 days, roll out more Section 232s,\u201d Elms says.<\/p>\n
U.S. officials are considering new national security tariffs on goods like large-scale batteries, industrial chemicals, and telecoms equipment, among other products, The Wall Street Journal <\/em>reported on Monday, citing unnamed sources.<\/p>\n Section 301 tariffs could prove even more problematic. Currently, only China and Brazil are subject to Section 301 investigations, yet U.S. Trade Representative Jamieson Greer said Friday that he expects to launch several more investigations targeting a wide range of different practices.<\/p>\n Elms suggests that the United States could argue that a country refusing to comply with a trade agreement\u2014even one originally sparked by tariffs later deemed illegal\u2014is engaging in \u201cunfair\u201d trade practices, exposing it to Section 301 duties. \u201cWhere the catch-22 comes in is: if you are not implementing the agreement that you signed with the U.S., to the full and complete satisfaction of the U.S., you are therefore out of compliance and you are practicing unfair trade,\u201d she warns.\u00a0<\/p>\n \u201cThis is not a crew that is terribly fussed about hypocrisy,\u201d she says.<\/p>\n<\/div>\n #Trump #claims #power #impose #worse #deals #trade #partners #State #Union<\/p>\n","protected":false},"excerpt":{"rendered":" U.S. President Donald Trump wa… <\/p>\n","protected":false},"author":1,"featured_media":25095,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[173,6153,1466,486,3998,9239,3070,4732,3100,1124,2351,3378,490,220,599,6990,131],"_links":{"self":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/25094"}],"collection":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25094"}],"version-history":[{"count":0,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/posts\/25094\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=\/wp\/v2\/media\/25095"}],"wp:attachment":[{"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/microvibenews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}