WHAT ABOUT THE HAWKS?: Donald Trump has not yet given any indication that he’ll impose a universal tariff on Day One as part of his blizzard of executive orders. On Sunday, at his "Make America Great Again Victory Rally" in Washington, he only gave trade policy a brief mention.
"We're going to cut your taxes and inflation, slash your prices, getting them back down, raise your wages and bring thousands of factories back to the USA, right where they belong, and that will be done through tariffs and smart policy," Trump told rally goers. "We will build American, we will buy American, and we will hire American.” Even Trump’s senior aides, who briefed a small group of lawmakers over the weekend on the president-elect’s plans, appeared to leave sweeping tariff action off that list, instead outlining a range of expected actions from immigration to energy policy. That’s a signal tariff policy might not be a major focus of Trump’s first round of executive orders, which he could implement after he’s sworn in at noon today. Of course, he could follow through on his hawkish campaign promises — but the uncertainty is bound to disappoint Trump’s hardcore protectionist backers. Reminder: Trump previously vowed to impose a universal tariff of between 10 percent to 20 percent and tariffs of 60 percent or higher on Chinese imports. He’s also promised to impose 25 percent tariffs on both Mexico and Canada on his first day in office. The hold-up, explained: Three people close to Trump's inner circle, granted anonymity to divulge discussions, said Trump has been fielding memos that cover a range of strategies, from a more sector-by-sector scheme to a universal baseline approach. His advisers were still deliberating how broadly to move less than a week before the start of his second term. Here's a quick recap on the trade tools Trump could deploy after he’s sworn in. Section 232 of the 1962 Trade Expansion Act: This law gives the president broad authority to restrict imports of a particular good or set of goods to protect national security. Trump used his authorities under Section 232 during his first term to impose tariffs on billions of dollars worth of steel and aluminum imports from around the world and to threaten similar duties on autos.
It’s not well suited for speedy action since it requires the Commerce Department’s Bureau of Industry and Security to launch an investigation that can take up to 270 days. Once that is complete, the White House has another 90 days to decide what, if any, action to pursue. Section 301 of the 1974 Trade Act: Trump used this provision during his first term to impose duties on hundreds of billions of dollars worth of Chinese goods and could turn to it again to increase the duties in his second term. Any completely brand-new Section 301 investigation against China or some other country could take up to a year to complete. However, the U.S. Trade Representative’s office, which is responsible for conducting such an investigation, could act faster than that. International Emergency Economic Powers Act of 1977: One way Trump might impose his 10 percent or 20 percent baseline tariff is by declaring that the large and persistent U.S. trade deficit is a national emergency. That would empower him to use IEEPA to impose tariffs or other import restrictions to bring trade in balance. Section 122 of the 1974 Trade Act: This could allow Trump to quickly impose a 15 percent tariff for up to 150 days on countries that have a trade deficit with the United States. However, Congress would have to approve a longer-term extension, raising questions about its viability as a negotiating lever or as a way to raise revenue, several trade experts told Morning Trade. Timing unclear: One person familiar with the Trump team's discussions said they still expect the president-elect to move forward with universal tariffs and other trade priorities he raised during the campaign, even if no such actions are announced Monday. “What's not clear is the timing. The president has four years to roll this out. I certainly am expecting him to move forward very quickly. But it's not clear to me that this is a Day One announcement," that person said, speaking on condition of anonymity to discuss an issue that still is being decided.
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