The End of IEEPA Tariffs: What’s Next for the Trump Administration’s Trade Agenda

Hours after the U.S. Supreme Court struck down International Emergency Economic Powers Act (IEEPA) tariffs last Friday, President Trump swiftly announced that he would leverage Section 122 to impose a 10% global tariff on all nations. The new duty took effect at midnight on February 24.

Section 122 of the Trade Act of 1974, which permits the president to impose temporary tariffs or import surcharges in response to “fundamental international payments problems,” is just one tool that President Trump can leverage to re-introduce tariffs or impose new ones.

With IEEPA tariffs now invalidated, businesses should expect increasingly complex tariff rules based on industry sector and product specifics. Flexport’s Tariff Simulator will only grow more valuable as the Trump administration’s trade policies continue to evolve.

Here’s an overview of the legal mechanisms that the Trump administration can still use to advance its tariff and trade agenda:

Section 301 (Unfair Trade Practices)

Section 301 enables the U.S. Trade Representative (USTR) to investigate unreasonable or discriminatory foreign trade practices, and impose tariffs or otherwise take action against nations that violate an international trade agreement or burden U.S. commerce.

Typically, it takes at least several months to introduce new Section 301 duties. The USTR must first complete an investigation into unfair trade practices, after which the president may impose new duties.

• Friday’s Supreme Court ruling does not impact Section 301 tariffs.
• Beyond imposing a new global tariff, President Trump has announced plans to open new Section 301 investigations that could lay the groundwork for new long-term tariffs.
• A number of products are currently subject to Section 301 tariffs. China has remained the primary target of these duties since President Trump’s first term, with most Chinese goods currently subject to 7-25% in Section 301 tariffs.

Section 232 (National Security)

Section 232 allows the Department of Commerce to investigate whether specific imports threaten national security and, if so, permits the president to impose targeted duties.

As with Section 301 tariffs, it typically takes at least several months to implement new Section 232 duties. Before the president can impose Section 232 duties, the Department of Commerce must complete an investigation into national security threats.

• Friday’s Supreme Court ruling does not impact Section 232 tariffs. President Trump has imposed a number of Section 232 tariffs in the past year, all currently in effect: 25% on autos and auto parts; 25% on medium- and heavy-duty vehicles (MHDVs); 50% on steel, aluminum, copper, and iron, as well as their derivative products; 25% on certain upholstered furniture, kitchen cabinets, and vanities; 10% on softwood timber and lumber; and more.
• There are currently nine investigations open. Additionally, as with Section 301 tariffs, President Trump announced on Friday that he intends to launch new Section 232 investigations that could lay the groundwork for new long-term tariffs.

Section 122 of the Trade Act of 1974

Section 122 permits the president to impose temporary tariffs or import surcharges in response to a balance-of-payments emergency. In implementing the new global tariff, which took effect on February 24, President Trump became the first-ever president to leverage Section 122 to impose tariffs.

Section 122 comes with some restrictions: duties are capped at 15%, and are only valid for up to 150 days. After 150 days, the president will need congressional approval to extend the duties.

• Less than one day after issuing a proclamation confirming the new 10% global tariff, President Trump wrote on Truth Social that he would increase the rate to 15%. As of now, however, the global tariff rate remains 10%; U.S. Customs and Border Protection (CBP) has yet to officially confirm an increase to 15%.

Section 338 of the Tariff Act of 1930 (Smoot-Hawley)

Section 338 authorizes the president to impose tariffs of up to 50% on imports from countries that discriminate against U.S. commerce. No president has ever used Section 338 to levy tariffs.

• Because Section 338 allows the president to levy duties “whenever he shall find as a fact” that a foreign nation is discriminating against U.S. commerce, new Section 338 duties may not require a formal agency investigation prior to implementation. As a result, President Trump could potentially harness Section 338 to quickly levy new tariffs, as he did with Section 122.

Navigating the Global Trade Landscape Ahead

Despite the end of IEEPA tariffs, President Trump remains committed to his tariff and trade agenda. As duties and compliance continue to evolve, the Flexport Tariff Simulator will be more useful than ever, providing businesses with real-time tariff calculations and landed cost insights based on the most up-to-date trade policy developments.

For specific guidance, get in touch with a Flexport expert.