As his trade war faces legal pushback, Trump has other tariff tools he could deploy

WASHINGTON — U.S. President Donald Trump’s tariffs are facing legal headwinds for the first time — but he has other tools he could deploy in his quest to realign global trade.

A federal appeals court is still deciding whether there will be a stay on Trump’s universal tariffs enacted through the International Emergency Economic Powers Act of 1977, usually referred to by the acronym IEEPA. The U.S. Court of International Trade ruled the duties were unlawful last month.

IEEPA is a national security statute that gives the U.S. president authority to control economic transactions after declaring an emergency. It had never previously been used for tariffs.

Trump declared emergencies at the United States’ northern and southern borders linked to the flow of fentanyl and migrants in order to hit Canada and Mexico with economywide tariffs. He later declared an emergency over trade deficits to impose his retaliatory “Liberation Day” duties on most nations.

The trade court found Trump exceeded presidential powers by using IEEPA to broadly implement the duties. The Trump administration quickly appealed the decision and the White House said it would take the case to the Supreme Court.

Following the ruling, White House Economic Council Director Kevin Hassett said he was confident the court ultimately would decide in Trump’s favour.

Hassett said that if it doesn’t, “we’ll have other alternatives that we can pursue as well to make sure that we make American trade fair again.”

While the U.S. Constitution gives power over taxes and tariffs to Congress, Greta Peisch, the former general counsel for the Office of the U.S. Trade Representative, said it passed laws over the last century that allow the president some control in certain situations. Trump is now looking to use those laws — some of them for the first time.

The president may be considering Section 338 of the Tariff Act of 1930. It allows a president to hit countries with tariffs of up to 50 per cent if the country “is treating products of the United States disfavourably, compared to products of another foreign country,” said Peisch, a partner at Wiley Rein in Washington, D.C.

Section 338 has never been used by a president before and Peisch said it might be difficult for the administration to make a case for it.

Trump also might look to Section 301 of the Trade Act of 1974, which allows a president to take trade actions if an investigation finds a trading partner’s policies are unreasonable and discriminatory. Trump used this law during his first administration to impose tariffs on some Chinese imports and European Union goods.

But Section 301 requires country-by-country investigations of trade policy before a tariff can be imposed — investigations that could take weeks or months and would include a period for public comment. That certainly would slow down Trump’s efforts to target the world with tariffs.

If the president is looking for speed, Peisch said, he might try to use Section 122 of the Trade Act of 1974 — another law that has never before been used.

Section 122 allows a president to implement tariffs of up to 15 per cent to address large and serious United States balance-of-payments deficits. But those duties can only stay in place for a maximum of 150 days before they need Congressional approval to continue.

That reduces Trump’s leverage if his goal is to pressure countries to sign trade deals — those countries could simply decide to wait the president out. Trump also has said tariffs will help pay down the deficit; the short-term Section 122 power is unlikely to work as a long-term revenue strategy.

Ultimately, Peisch said, none of the replacement statutes could easily build Trump’s universal tariff wall around the United States.

“Nothing is a great fit without a lot of work,” she said. “So I think it’s potentially going to be a challenge.”

This report by The Canadian Press was first published June 7, 2025.

Kelly Geraldine Malone, The Canadian Press