LSN Weekly Federal Mobility Digest

December 5, 2024

Incoming Trump Administration Outlook: Tariffs

President-elect Donald Trump has repeatedly vowed to enact broad tariffs on imports from several of the country’s largest trading partners in order to achieve certain policy objectives. The imposition of these tariffs is to protect American industry while simultaneously punishing what the incoming administration sees as a lack of action on drug and human trafficking, including illegal immigration into the United States.
Specifically, President-elect Trump has proposed a 10% tariff, in addition to any existing tariffs, on many items coming into the country from China due to the flow of illegal drugs. In his last administration, then-President Trump enacted a series of tariffs on China because of accusations that Chinese companies were being given incentives and flooding the U.S. market with subsidized products, most notably solar panels. Recently, Trump also announced he would institute a 25% tariff on all products coming from Canada and Mexico because of the flow of immigrants and illegal drugs across the U.S.’s northern and southern borders.

How are Tariffs Enacted

Constitutionally, Congress is granted the authority to lay and collect duties and regulate commerce with foreign nations. However, over the last 100 years, Congress has delegated much of that authority to the President, known as Trade Promotion Authority. The most relevant of these authorities are Section 201 of the Trade Act of 1974 (Section 201), Section 232 of the Trade Expansion Act of 1962 (Section 232), Section 301 of the Trade Act of 1974 (Section 301), and the International Emergency Economic Powers Act. Essentially, each of these laws allow the President or the U.S. Trade Representative to restrict or enact tariffs on imports if certain conditions are met, such as trade-related concerns or protecting national security.
Any actions taken by the Administration using these authorities does not require Congressional approval, however Congress may pass legislation that alters the tariffs or even strip the President of these authorities.
However, with Republicans in control of both chambers, it is unlikely that any legislation restraining the President will pass.

U.S. Trade Representative Outlook

President-elect Donald Trump has selected Jamieson Greer as the United States Trade Representative for his incoming administration. Greer previously served as chief of staff to Trump’s former U.S. tradevrepresentative, Robert Lighthizer, and was instrumental in implementing the original tariffs on certain Chinese imports and the renegotiation of a free trade deal with Canada and Mexico. Greer is currently a partner in international trade at King & Spalding, a law firm in Washington, DC.

How are Tariffs Collected

U.S. Customs and Border Control is in charge of collecting tariffs at U.S. ports of entry, using the Harmonized Tariff Schedule to calculate the tariff on the assessed the value of imported goods. Tariffs are paid by the importer receiving the goods, not the overseas producer.