The tariff is dead, long live the tariff! That is how Donald Trump responded to the Supreme Court’s ruling Friday that the administration’s “emergency” tariffs under the International Emergency Economic Powers Act were unconstitutional. That same day Mr. Trump turned to Section 122 of the 1974 Trade Act to set a 10% global tariff. After a night’s sleep, he raised the level to 15%.
Trade lawyers everywhere are thrilled by the complex lawsuits that will get under way as companies seek redress for illegal tariffs. More than that, the relationship of the new Section 122 tariffs with existing trade agreements requires sorting out, with battalions of lawyers and consultants ready to provide high-priced advice on the rapidly changing environment. The European Union is pausing ratification of its trade agreement with the U.S. while reviewing the state of play. Other countries may re-examine their commitments under Trump-era trade deals to make large investments in the U.S.