President Donald Trump’s temporary 15 percent tariffs to replace those struck down by the US Supreme Court are meant to resolve a problem that many economists say does not exist: a US balance of payments crisis, making them potentially vulnerable to new legal challenges.
Hours after the high court on Friday struck down a huge swath of tariffs Trump had imposed under the International Emergency Economic Powers Act, the president announced the new duties under Section 122 of the Trade Act of 1974 — a never-used statute that even his own legal team dismissed as irrelevant months ago.
Collections of the new 15 percent tariffs began at midnight on Tuesday as IEEPA tariff collections of 10 percent to 50 percent halted.
The Section 122 law allows the president to impose duties of up to 15 percent for up to 150 days on any and all countries to address “large and serious” balance-of-payments deficits and “fundamental international payments problems.”
Trump’s tariff order argued that a serious balance of payments deficit existed in the form of a $1.2 trillion annual US goods trade deficit and a current account deficit of 4 percent of GDP and a reversal of the US primary income surplus.
