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CBS News
6 days ago
- Business
- CBS News
As Trump's tariffs face legal challenge, here are some of his other trade policy options
Legal whirlwind over Trump's tariffs is not over, could continue for months The Trump administration could pursue alternative pathways for imposing tariffs after a federal court this week struck down its use of emergency powers to enact broad levies on U.S. trading partners, according to experts. At risk is much of Mr. Trump's trade agenda, which relies on tariffs as a way to secure better terms of trade, boost the U.S. manufacturing sector and generate what he claims could be trillions in new federal revenue. For now, Mr. Trump's tariffs remain in place after a federal appeals court in Washington, D.C., on Thursday temporarily halted the decision, reinstating the levies. If the trade court's ruling is ultimately upheld, Mr. Trump has other tools for pursuing his trade agenda, although they don't provide the broader authority of the International Emergency Economic Powers Act (IEEPA), which he tapped to authorize trade duties on almost every foreign nation. "He would have a couple other authorities. However, they are not nearly as broad and aggressive as the IEEPA tariffs," said Clark Packard, a research fellow in the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, a nonpartisan public policy institute. "There are so many checks and administrative aspects to them that they are slower." Mr. Trump announced his tariffs on April 2 in an initiative he referred to as "Liberation Day." At the time, the president described trade deficits with other nations as "a national emergency," which he said gave him the authority to impose tariffs under IEEPA. But a lawsuit filed by five U.S.-based companies and a group of 12 states challenged the president's use of the emergency powers law, and on Wednesday the Court of International Trade blocked the tariffs. President will use "tools at his disposal" As the legal process plays out, Trump administration officials say the president is considering using other tools at his disposal to advance his trade policies. "The Trump administration remains committed to addressing our country's national emergencies of drug trafficking and historic trade deficits with every legal authority conferred to the President in the Constitution and by Congress," White House spokesperson Kush Desai said in a statement to CBS News on Thursday. Desai added, "Regardless of the developments of this litigation, the President will continue to use all tools at his disposal to advance trade policy that works for all Americans." Here are the other options Mr. Trump could turn to, and how he could use them, according to policy experts. Section 232 tariffs of the Trade Expansion Act of 1962 Experts say Mr. Trump could turn to Section 232 of the Trade Expansion Act of 1962, which allows the U.S. president to restrict imports in the name of national security. Mr. Trump already has tariffs in place on steel, aluminum and auto imports based on this regulation. There's a catch, though. The statute requires the Department of Commerce, in consultation with the Department of Defense, to investigate and confirm that imports "threaten to impair" U.S. national security before the president can invoke Section 232. An investigation can take up to 270 days, which could slow down Mr. Trump's timeline for imposing tariffs. "It has to withstand legal scrutiny, it can't just be done over the weekend," Packard said. Additionally, under Section 232, tariffs can only be applied to specific sectors if the trade around those imports threaten national security, rather than the broad approach that Mr. Trump used with IEEPA. "Once the report is issued, the president has wide discretion, but he has to target individual sectors of product, like steel and aluminum," Packard said. "They can't be blanket, across-the-board tariffs." Some experts think Mr. Trump is likely to turn to this statute to further his tariff agenda. "In our view, the administration will prepare the groundwork for a more surgical increase in tariffs beginning this summer following Section 232 trade investigations into strategic industries like pharmaceuticals, critical minerals, lumber, copper and semiconductors," Kurt Reiman, head of fixed income Americas at UBS Global Wealth Management, said in a research note. He added, "These sectors were initially excluded from the 10% baseline tariff because President Trump had intended to levy separate tariffs to reduce the U.S.'s reliance on foreign producers of these products by encouraging domestic production." Section 301 of the Trade Act of 1974 Mr. Trump could also draw on the Trade Act of 1974 to impose new tariffs. Section 301 of that law allows the U.S. president to apply county-based tariffs at a rate of his choosing if the U.S. Trade Representative determines that another country is engaging in unfair foreign trade practices. There are limitations, however. The law can't be applied universally to all imports from foreign nations. "There has to be justification for it, so President Trump can't unilaterally decide to impose broad-based tariffs on the entire world," Angela Santos, a partner and customs practice leader at law firm ArentFox Schiff told CBS MoneyWatch. Section 122 of the Trade Act of 1974 Additionally, Mr. Trump could use Section 122 of the Trade Act of 1974, which is designed to address large trade deficits with other nations, to impose tariffs of up to 15% for a maximum of 150 days. "I could see this being employed very easily," Santos said. "It seems like the easiest way to impose tariffs, particularly because most trade partners have large deficits with the U.S." Applying tariffs under Section 122 wouldn't require an investigation, meaning Mr. Trump could quickly use it to assess a broad-based import duty. "The administration could quickly replace the 10% across-the-board tariff with a similar tariff of up to 15% under Sec. 122," Goldman Sachs analysts wrote in a report this week. The tariffs could be in effect "within days if deemed necessary," Goldman Sachs said. Congressional action would be needed to extend the tariffs after 150 days. Section 338 of the Tariff Act of 1930 Under Section 338 of the Tariff Act of 1930, the president can impose tariffs of up to 50% on imports from countries that discriminate against the U.S. The law defines discrimination as when a trading partner's laws, import duties, regulations or other restrictions place the U.S. at a disadvantage. These tariffs differ from Section 301 levies in that the tariff rate is capped at 50%. Additionally, no formal investigation is required. The authority has never been used, according to experts.
CNN
08-02-2025
- Business
- CNN
Trump reinstates tariff exemption for certain cheap shipments – for now
The Trump administration on Friday delayed the suspension of the so-called de minimis provision, which allows packages worth less than $800 to enter the country duty-free, a move that helps low-cost shopping sites from China that sell everything from fast fashion to furniture. The delay will last until 'adequate systems are in place' for the Commerce Department 'to fully and expediently process and collect tariff revenue,' according to a new executive action announced on Friday. A suspension of the long-standing de minimis provision would have had dire effects on Chinese e-commerce sites like Shein, Temu and Aliexpress — as well as for Amazon, eBay, Etsy and other retailers that ship from China. The provision was part of Trump's announcement of 10% across-the-board tariffs on China this week, a move that, along with retaliatory tariffs from China, could reshape global trade. Chinese e-commerce sites have built their gargantuan business models around this exemption. The relaxed restrictions and tax exemptions on cheap products have allowed more than a billion packages to pour in at a low-cost price for consumers looking for deals on clothing to household goods. The delay is another example of Trump's policies meeting reality, Clark Packard, a research fellow at the libertarian Cato Institute, told CNN. Experts previously told CNN the suspension would overwhelm US Customs and Border Protection. More than 80% of total US e-commerce shipments in 2022 were de minimis imports, according to a congressional research report. 'You would have to have a lot more people on the ground,' Packard said. 'The reality is that right now Customs and Border Protection is just not qualified or capable of handling this because of the volume of packages. The executive order did not say how long the delay would last. Packard said there is no estimation for how long it would take. Logistically, he said it would take at least a year to set up a fully functional system, but the delay could also be a trade negotiation tactic. To get around the exemption's disappearance, companies can expand their warehouses in the United States, Christopher Tang, a professor of global supply chain management at the University of California, Los Angeles, previously told CNN. They can ship bulk amounts through customs and then reship products across the United States, but customers will still have to pay the import tax.
CNN
05-02-2025
- Business
- CNN
The end of cheap Shein and Temu hauls? How Trump's tariffs could make those shipments more expensive
Americans love Shein, Temu and AliExpress for two reasons: cheap prices and fast shipping. Trump's tariffs could change that. Trump's tariff orders reversed a long-standing shipping loophole: the de minimis exemption. The rule allowed international exporters to ship packages worth less than $800 inspection- and duty-free into the United States. Chinese e-commerce sites have built their gargantuan business models around this exemption. The relaxed restrictions and tax exemptions on cheap products has allowed more than a billion packages to pour in at a low-cost price for consumers looking for a deal on clothing to household goods. But the Trump administration is getting rid of the provision that made these goods so cheap and easy to access. 'If you inspect every package, it's going to raise costs dramatically for consumers,' Clark Packard, a research fellow at Cato Trade, said. 'It's going to slow down the reception of goods that were bought.' Currently, US Customs and Border Protection has the authority to open and inspect all international packages, though in practice it doesn't open every single item. Trump enacted 10% tariffs on Chinese imports on Tuesday, adding to a wide array of tariffs that were placed on goods from the country during his first term. (The administration delayed a 25% tariff order on Canada and Mexico until March 1.) Beijing hit back with a 15% tax on certain types of coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, large-displacement cars and pickup trucks. The ramifications of a looming US-China trade war on Shein and Temu consumers have begun to trickle in. On Tuesday, the United States Postal Service temporarily suspended the acceptance of international parcels from China and Hong Kong until further notice. It did not provide a reason for the change, but said in a statement the flow of letters would not be affected. The de minimis provision has been around since the 1930s, but the threshold has increased over the years. It's meant to ease trade and help out consumers, Packard told CNN. The exemption means buyers don't have to fill out tiresome customs paperwork or pay tariffs on small packages. In September 2024, the Biden administration announced it was cracking down on what it called abuse of the de minimis exemption, saying that over the past decade shipments increased from about 140 million a year to over a billion. The exponential increase made it more challenging to enforce trade laws and also posed challenges for American workers and businesses, upholding US consumer protections laws and combatting the fentanyl trade. The Trump administration said the suspension will stop shipments of fentanyl from Mexico and Canada in small packages. Policymakers already want to appear tough on China, said Rob Handfield, a professor of supply chain management at North Carolina State University. The US also has concerns over fast fashion labor practices in China, though the administration has not specified why China is targeted. The de minimis exemption is why these Chinese goods are so cheap for US customers, said Christopher Tang, a professor of global supply chain management at the University of California, Los Angeles. More than 80% of total US e-commerce shipments in 2022 were de minimis imports, according to a congressional research report. During the first Trump administration, 'consumers bore basically 90 to 100% of the cost of a tariff,' Packard said. 'So, if that similar dynamic exists, consumers could expect a 10% increase if it's coming from China.' Customs is not equipped to handle this level of change, and it could cause other delays, Handfield said. 'The operations would be horrendous in terms of implementation,' Tang said. In 2024, Temu ran an ad during the Super Bowl (at a range of $6.5 million to $7 million for a 30-second spot) with $14 million in coupons and giveaways. The Boston-based firm — owned by PDD (PDD), the group behind Chinese online shopping giant Pinduoduo — paid for three ads during the game and two after the game. Whether that will happen at this year's Super Bowl in February is now in question. Cutting the exemption could significantly taper the growth of Chinese e-commerce companies, according to a Bank of America research note. Those cuts could hit the marketing budget. Americans are used to seeing Temu and Shein everywhere. Revenue from China-based advertisers grew from 6% of Meta's family of apps revenue to 11% in 2024, according to the company's financial reports. Bank of America estimated Temu and Shein exposure could be 2% to 4% of ad spend for Google and Meta. To get around this, companies can expand their warehouses in the US, Tang said. They can ship bulk amounts through customs and then reship it across the US – but customers will still have to pay the import tax. The perk would be that could create more US jobs, Tang said. The companies could also ship products to other ASEAN countries such as Vietnam and ship it to the US there, but the extra shipping costs would also eventually trickle down to customers. CNN's Eric Cheung and Simone McCarthy contributed to this report.
CNN
05-02-2025
- Business
- CNN
The end of cheap Shein and Temu hauls? How Trump's tariffs could make those shipments more expensive
Americans love Shein, Temu and AliExpress for two reasons: cheap prices and fast shipping. Trump's tariffs could change that. Trump's tariff orders reversed a long-standing shipping loophole: the de minimis exemption. The rule allowed international exporters to ship packages worth less than $800 inspection- and duty-free into the United States. Chinese e-commerce sites have built their gargantuan business models around this exemption. The relaxed restrictions and tax exemptions on cheap products has allowed more than a billion packages to pour in at a low-cost price for consumers looking for a deal on clothing to household goods. But the Trump administration is getting rid of the provision that made these goods so cheap and easy to access. 'If you inspect every package, it's going to raise costs dramatically for consumers,' Clark Packard, a research fellow at Cato Trade, said. 'It's going to slow down the reception of goods that were bought.' Currently, US Customs and Border Protection has the authority to open and inspect all international packages, though in practice it doesn't open every single item. Trump enacted 10% tariffs on Chinese imports on Tuesday, adding to a wide array of tariffs that were placed on goods from the country during his first term. (The administration delayed a 25% tariff order on Canada and Mexico until March 1.) Beijing hit back with a 15% tax on certain types of coal and liquefied natural gas and a 10% tariff on crude oil, agricultural machinery, large-displacement cars and pickup trucks. The ramifications of a looming US-China trade war on Shein and Temu consumers have begun to trickle in. On Tuesday, the United States Postal Service temporarily suspended the acceptance of international parcels from China and Hong Kong until further notice. It did not provide a reason for the change, but said in a statement the flow of letters would not be affected. The de minimis provision has been around since the 1930s, but the threshold has increased over the years. It's meant to ease trade and help out consumers, Packard told CNN. The exemption means buyers don't have to fill out tiresome customs paperwork or pay tariffs on small packages. In September 2024, the Biden administration announced it was cracking down on what it called abuse of the de minimis exemption, saying that over the past decade shipments increased from about 140 million a year to over a billion. The exponential increase made it more challenging to enforce trade laws and also posed challenges for American workers and businesses, upholding US consumer protections laws and combatting the fentanyl trade. The Trump administration said the suspension will stop shipments of fentanyl from Mexico and Canada in small packages. Policymakers already want to appear tough on China, said Rob Handfield, a professor of supply chain management at North Carolina State University. The US also has concerns over fast fashion labor practices in China, though the administration has not specified why China is targeted. The de minimis exemption is why these Chinese goods are so cheap for US customers, said Christopher Tang, a professor of global supply chain management at the University of California, Los Angeles. More than 80% of total US e-commerce shipments in 2022 were de minimis imports, according to a congressional research report. During the first Trump administration, 'consumers bore basically 90 to 100% of the cost of a tariff,' Packard said. 'So, if that similar dynamic exists, consumers could expect a 10% increase if it's coming from China.' Customs is not equipped to handle this level of change, and it could cause other delays, Handfield said. 'The operations would be horrendous in terms of implementation,' Tang said. In 2024, Temu ran an ad during the Super Bowl (at a range of $6.5 million to $7 million for a 30-second spot) with $14 million in coupons and giveaways. The Boston-based firm — owned by PDD (PDD), the group behind Chinese online shopping giant Pinduoduo — paid for three ads during the game and two after the game. Whether that will happen at this year's Super Bowl in February is now in question. Cutting the exemption could significantly taper the growth of Chinese e-commerce companies, according to a Bank of America research note. Those cuts could hit the marketing budget. Americans are used to seeing Temu and Shein everywhere. Revenue from China-based advertisers grew from 6% of Meta's family of apps revenue to 11% in 2024, according to the company's financial reports. Bank of America estimated Temu and Shein exposure could be 2% to 4% of ad spend for Google and Meta. To get around this, companies can expand their warehouses in the US, Tang said. They can ship bulk amounts through customs and then reship it across the US – but customers will still have to pay the import tax. The perk would be that could create more US jobs, Tang said. The companies could also ship products to other ASEAN countries such as Vietnam and ship it to the US there, but the extra shipping costs would also eventually trickle down to customers. CNN's Eric Cheung and Simone McCarthy contributed to this report.
