News & Press

February 13th, 2025

Rogers & Brown

Written By: Raymond Kelley, President of Rogers & Brown

The first month of President Trump’s second term has seen a flurry of activity—some unexpected but much of it predictable based on his first term and campaign promises. A key focus has been border security, addressing both illegal immigration and the flow of illicit drugs into the country. Additionally, President Trump continues to employ tariffs as a central tool in his economic strategy and approach to global trade.

Tariffs in Trump’s First Term

During his first term, President Trump implemented several significant tariff measures:

1. Steel and Aluminum Tariffs (2018): Citing national security concerns under Section 232 of the Trade Expansion Act of 1962, he imposed tariffs of 25% on steel and 10% on aluminum, affecting both adversaries and allies, including Canada, Mexico, and the EU.
2. Trade War with China: Using Section 301 of the Trade Act of 1974, the U.S. imposed tariffs on hundreds of billions of dollars worth of Chinese goods to counter intellectual property theft and trade imbalances.

Early Second-Term Tariff Actions

President Trump has quickly moved to expand his use of tariffs under various statutory authorities:

1. Tariffs on Mexico and Canada: Under the International Emergency Economic Powers Act (IEEPA) of 1977, he announced 25% tariffs on products from Mexico and Canada, citing a national emergency over border security and the fentanyl crisis. These tariffs were initially delayed until March 4.
2. Elimination of De Minimis Duty-Free Status: Trump issued an executive order removing the eligibility for duty-free treatment for shipments valued below $800 under IEEPA. This order has been temporarily suspended pending system adjustments.
3. Increased Duties on China: Under IEEPA, a 10% tariff was imposed on products from China, including Hong Kong.
4. Expansion of Steel and Aluminum Tariffs: Announced this week, a 25% tariff will now apply to all countries importing steel and aluminum products and specific derivative products into the U.S., effective March 12, 2025.

Additional Statutory Authorities Available

President Trump has proven that he does not hesitate to use Executive Orders supported by statutory authority. Are there more authorities available to him than what he used to this point? The answer is yes, and here is a brief synopsis of them:

1. Trade Expansion Act of 1962, Section 232: Requires an investigation to prove harm to U.S. industries before tariffs or quotas can be enacted.
2. Trade Act of 1974 (Sections 122, 201, 301): Some sections require investigations, as was the case with China in Trump’s first term.
3. International Emergency Economic Powers Act (IEEPA): Allows trade measures without Congressional approval, provided a national emergency is declared and Congress is consulted.
4. Trading with the Enemy Act of 1917, Section 5(b)(1)(B): Requires consultation with Congress and a national emergency declaration.
5. Tariff Act of 1930, Section 338: Enables up to 50% additional duties without investigation if discrimination against U.S. goods can be proven.
6. Revocation of Permanent Normal Trade Relations: Requires Congressional approval and would significantly increase duty rates on imports from affected nations.

Implications and Global Reactions

Trump’s tariff actions have had mixed results. China has retaliated against U.S. goods and companies through tariffs and antitrust investigations. However, Mexico and Canada responded with commitments to strengthen border security and combat drug trafficking, leading to a temporary delay in tariff implementation.

The primary concern is what happens if President Trump is dissatisfied with Mexico or Canada’s progress. Based on the statutory authorities he has at his disposal, he can act quickly and invoke the 25% tariffs. If he does, what would the results be? Mexico and Canada’s presidents have stated they would offer retaliatory tariffs to inflict economic pain on the U.S. and its citizens. In particular, the commodities most affected would be automotive, electronics, home appliances, furniture, food, and energy (the U.S. imports a large percentage from Canada). The ultimate results will be higher consumer costs, loss of jobs, and strained relationships among the three North American countries. There are no winners if this happens.

The “America First” Trade Policy

This is just the beginning of Trump’s newly issued “America First Trade Policy,” announced on January 20, 2025. This directive tasks major federal agencies—including the Departments of Commerce, State, Defense, and Homeland Security, as well as the U.S. Trade Representative and the Office of Management and Budget—with reviewing current trade and economic policies.

Key focus areas include:

• Currency manipulation by foreign governments
• The effectiveness of antidumping and countervailing duties
• National security concerns related to technology transactions
• Strengthening existing tariffs on steel and aluminum

Agencies must report findings and recommendations by April 1, though Trump’s recent expansion of steel and aluminum tariffs suggests he may act before then.

Conclusion

President Trump remains committed to his “America First” policy, using tariffs as a primary tool to protect domestic industries and ensure fair trade. While his strategy aims to reshape U.S. trade relationships, it carries significant risks, including potential retaliation, strained alliances, and higher costs for American consumers. As his administration moves forward with this agenda, businesses and consumers alike must stay vigilant and prepare for possible economic adjustments.