Donald Trump raises global tariffs to 15%: What Sections 122, 232, 301 mean

US President Donald Trump has raised the global baseline tariff to 15 per cent after a court setback, using older trade laws. Here's what Sections 122, 232 and 301 mean and how they allow tariffs

A day after a major legal setback to his tariff policy, US President Donald Trump announced that he would increase the global baseline tariff rate to 15 per cent from the existing 10 per cent. The decision came soon after a ruling by the United States Supreme Court that limited his use of emergency powers to impose trade duties. 

In a post on Truth Social on Saturday, Trump said the higher tariff would take effect immediately and was legally justified after a detailed review of the court’s judgment. 

“...I, as President of the United States of America, will be, effective immediately, raising the 10 per cent worldwide tariff on countries to the fully allowed and legally tested 15 per cent level,” Trump said. 

 

The announcement followed a 6-3 Supreme Court verdict on Friday that found Trump had acted unlawfully when he used the International Emergency Economic Powers Act of 1977 to justify his “reciprocal” tariffs. After the ruling, he moved to a different legal route by imposing a new baseline tariff under Section 122 of the Trade Act of 1974. 

Trump also said that a 10 per cent global tariff under Section 122 would be applied in addition to tariffs already in place. He also said that tariffs imposed for national security reasons under Section 232 and those imposed to counter unfair trade practices under Section 301 would remain fully effective. 

Earlier, Trump had invoked several laws to impose and adjust tariffs, including the emergency powers law, the National Emergencies Act, Section 232 of the Trade Expansion Act of 1962, Section 604 of the Trade Act of 1974 and Section 301 of US trade law. 

What Section 122 allows

Section 122 of the Trade Act of 1974 gives the US President authority to act when the country faces serious balance-of-payments problems. Under this provision, the President can temporarily impose an import surcharge of up to 15 per cent or introduce import quotas. These measures can remain in place for a maximum of 150 days unless Congress approves an extension.

What Section 232 covers

Section 232 of the Trade Expansion Act of 1962 focuses on protecting national security. It allows the President to restrict imports if the US Department of Commerce determines that certain imports threaten national security after conducting an investigation. The US Department of Commerce must submit its report within nine months, after which the President gets 90 days to decide on action and another 15 days to implement it. 

Unlike Section 122, there is no cap on tariff levels under Section 232 and no fixed expiry period. Congressional approval is not required, although lawmakers must receive a written explanation. Congress can only directly block actions taken under this law if they relate to oil and petroleum imports.

What Section 301 does

Section 301 of the Trade Act of 1974 is designed to counter unfair trade practices by other countries. Under this law, the Office of the United States Trade Representative investigates whether foreign policies are discriminatory or harm US commerce. If such practices are found, the US can impose tariffs or other penalties. 

There is no limit on the size of tariffs under Section 301. These duties generally remain in place for four years but can be extended after review. 

Trump relied on this law during his first term to impose sweeping tariffs on imports from China amid disputes over trade and technology, the Associated Press reported. The US has also used the same powers recently to address concerns about China’s shipbuilding industry. 

(With agency inputs)