Can Section 301 effectively replace IEEPA? That is the $166 billion question

(Madeline Chalecki – Atlantic Council) Since the Supreme Court struck down the tariffs implemented under the International Emergency Economic Powers Act (IEEPA) in February, the Trump administration has not backed down from its high tariff ambitions. Instead, it is looking to reconstruct the tariff wall through a sweeping expansion of investigations under Section 301 of the Trade Act of 1974—covering sixty economies and targeting forced labor and structural excess capacity. While that effort is underway, the administration has enacted a 10 percent surcharge on all imports into the US under Section 122 of the Trade Act of 1974. Yet this provision only provides temporary authority and is set to expire on July 24 unless reauthorized by Congress. On June 2, the Office of the US Trade Representative (USTR) announced proposed rates from the forced labor 301 investigation, and the rest are expected within days. This first round of remedies gives us insight into how the administration plans to build a new tariff regime. Drawing on what we know, we have modeled the potential new 301 architecture to show how much revenue the government can hope for. Our first estimate is that a Section 301-based regime could generate up to $169 billion, assuming 2025 import levels. – Can Section 301 effectively replace IEEPA? That is the $166 billion question – Atlantic Council