On March 5, 24 states suedes Su Trump over tariffs imposed under Section 122 of the 1974 Trade Act. Following the Supreme Court’s ruling against President Trump’s IEEPA duties, Trump announced Section 122 tariffs. Section 122 allows levies up to 15% for a 150-day period. A coalition of attorneys general and prosecutors from 24 states responded by filing a lawsuit against the Trump administration. The lawsuit argues that Trump misused Section 122, which is to address temporary balance-of-payment emergencies. Filed in the Court of International Trade (CIT), the suit is to declare the Section 122 tariffs illegal. This case is the first major legal challenge against the president’s new duties.
Trump’s Goal Behind Imposing Section 122 IEEPA Tariffs?
Similar to Trump’s imposition of IEEPA tariffs, a goal behind Section 122 levies is to address unfair trade imbalances. He notes that other countries impose higher tariffs on American goods than the US charges them. Imposing levies is also a way to leverage pressure on trading partners to revisit trading terms. The aim is to address non-tariff barriers and lower foreign tariffs. Another goal is to bring manufacturing and businesses back to the US and to stimulate the economy. Bringing manufacturing back to the US will pressure US buyers to stop relying on foreign products. Critics argue that the opposite will happen, with costs rising, especially for industries with global supply chains.
What Happens Next As 24 States Sued Trump Over Tariffs
Following the lawsuit, the CIT will decide on whether to keep or deem Trump’s Section 122 tariffs illegal. If the levies are kept, all imports into the US will face a 15% for up to 150 days. After the 150-day period, the Trump Administration could impose a more permanent levy. However, if the court deems the levies illegal, importers could be entitled to refunds, similar to those under Trump’s IEEPA tariffs. Other levies, including a Section 232 tariff on imports such as steel, aluminum, and vehicles, remain in effect. The White House has not yet responded to the lawsuit.
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