MNI INTERVIEW: Trump Has Options To Keep Tariffs -Eissenstat

President Trump has multiple options to maintain tariffs even if courts ultimately decide that the legal foundation for his April 2 reciprocal tariffs is invalid, and meanwhile the rulings last week are adding to uncertainties facing businesses, Everett Eissenstat, a top White House economic and trade adviser in the first Trump administration, told MNI.  

"There are a lot of tariffs in place that are not vulnerable legally that are pretty significant, and there are other statutes the administration can use to put tariffs on," Eissenstat said in an interview. 

"Many countries are still going to negotiate, which is wise. So in some ways it changes a lot and in some ways it doesn't change much."  (See MNI INTERVIEW: Fed Will Face ‘Tough Calls’ In H2-Holtz-Eakin)

Whether Trump will launch import duties under authorities other than the International Emergency Economic Powers Act, or IEEPA, while the cases are pending is unclear, Eissenstat said. "If he has confidence he’ll win, it might not make sense to use other tools," especially as the tariffs are in effect while the appeals process goes on for several more months, if not longer, he said. 

OTHER AUTHORITIES

Trump could begin additional investigations on trading partners under Section 301 of the Trade Act of 1974 to target the top eight largest bilateral deficits, or impose temporary tariffs of up to 15% for a maximum of 150 days to address "large and serious United States balance-of-payments deficits" under Section 122, said Eissenstat, formerly lead negotiator for the U.S. at the G7, G20 and APEC summits. 

Section 338 also authorizes Trump to impose duties of up to 50% if a country discriminates against U.S. goods, he added.   

"At the end of the day we are talking about what statutory tool he used, not whether he can impose tariffs. He can and there are a lot of other instruments to do that," he said. 

"That still brings home some of the fundamentals of what he wants to achieve: reshoring, rebalancing unfair trade practices. Those issues are still going to be on the table."  

CHINA RELATIONSHIP 'ROCKY'

For companies, the court cases have made the business environment even more uncertain, Eissenstat said.  

"The question now is do we pay tariffs and maybe hope to get them back? There’s just no real clarity, and if anything the court cases have made things even more murky." 

A contentious past few days, with Beijing and Washington both accusing the other of violating the terms of a 90-day trade truce underscores that the relationship continues to be "rocky," Eissenstat said. 

"I had thought the negotiations would continue in earnest," he said. "But there doesn’t seem to be any real impetus to provide a settlement on either side any time soon."