{"id":17559,"date":"2026-07-26T07:24:43","date_gmt":"2026-07-26T02:24:43","guid":{"rendered":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=17559"},"modified":"2026-07-26T07:24:43","modified_gmt":"2026-07-26T02:24:43","slug":"trump-administration-consults-unused-1930s-law-for-tariff-playbook","status":"publish","type":"post","link":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/?p=17559","title":{"rendered":"Trump administration consults unused 1930s law for tariff playbook"},"content":{"rendered":"<p><script>\r\n  atOptions = {\r\n    'key' : '644b717812d811d6a1c1fc5b6ccd6fa6',\r\n    'format' : 'iframe',\r\n    'height' : 90,\r\n    'width' : 728,\r\n    'params' : {}\r\n  };\r\n<\/script>\r\n<script src=\"https:\/\/www.highperformanceformat.com\/644b717812d811d6a1c1fc5b6ccd6fa6\/invoke.js\"><\/script>\r\n<br \/>\n<br \/><img decoding=\"async\" src=\"https:\/\/images.axios.com\/OYLNfj4K7RTerwc_FFN45tVwPaE=\/1366x768\/smart\/2025\/04\/15\/154043-1744731643123.jpg\" \/><\/p>\n<p>The Trump administration keeps finding new ways to wage trade wars. As one novel tariff authority nears its expiration, it&#8217;s testing another \u2014 <a href=\"https:\/\/www.axios.com\/2026\/07\/20\/trump-tariffs-canada-trade-war\" target=\"_blank\">threatening huge duties on Canadian goods<\/a> under a never-before-used law.<\/p>\n<p><strong>Why it matters: <\/strong>The administration&#8217;s willingness to test new trade authorities makes tariff policy harder for businesses, investors and foreign governments to handicap.<\/p>\n<hr>\n<ul>\n<li>It&#8217;s hard to know which will survive challenges in the courts, and over what time horizon there may be any resolution.<\/li>\n<li>Even if individual tariffs are delayed or struck down, the administration can still use the threat of them to gain negotiating leverage while forcing companies to plan for higher costs.<\/li>\n<li>It&#8217;s unfolding even as renewed conflict in the Middle East pushes up energy costs and inflation risks \u2014 a backdrop that many economists thought would discourage the White House from opening new trade war fronts.<\/li>\n<\/ul>\n<p><strong>Driving the news: <\/strong>The White House says the tariffs respond to what it considers Canadian discrimination against U.S. autos, dairy and alcohol. <\/p>\n<ul>\n<li>The administration invoked the never-before-used Section 338 of the 1930 Smoot-Hawley Tariff Act and chose the maximum penalty allowed by the law: 50% duties, applied to roughly $20 billion of Canadian imports starting in August.<\/li>\n<li>The duties would raise the average tariff rate on Canadian goods by roughly 2.3 percentage points, according to Karl Schamotta, Corpay&#8217;s chief market strategist.<\/li>\n<\/ul>\n<p><strong>Between the lines:<\/strong> Section 338 is the latest legal authority the administration has reached for after courts earlier this year <a href=\"https:\/\/www.axios.com\/2026\/02\/20\/trump-tariffs-supreme-court-illegal\" target=\"_blank\">narrowed its emergency tariff powers<\/a>.<\/p>\n<ul>\n<li>The White House quickly replaced many of those invalidated tariffs with a 10% global levy under Section 122 \u2014 another never-before-used authority that happens to expire on Friday.<\/li>\n<li>A federal trade court later struck down the <a href=\"https:\/\/www.axios.com\/2026\/02\/20\/trump-tariff-plan-section-122-trade-act\" target=\"_blank\">Section 122 tariffs<\/a>, though an appeals court allowed them to remain in effect pending appeal.<\/li>\n<li>As that authority fades, the administration is replenishing its arsenal with more traditional trade laws. Top Trump trade official Jamieson Greer told CNBC on Tuesday morning to &#8220;expect to see some action soon&#8221; from a <a href=\"https:\/\/www.axios.com\/2026\/03\/11\/trump-tariffs-trade-301\" target=\"_blank\">forced-labor investigation<\/a> expected to produce tariffs on dozens of countries.<\/li>\n<\/ul>\n<p><strong>What to watch: <\/strong>Trade lawyers suggest the latest Canadian tariffs are also likely to face legal scrutiny \u2014 that is, if they take effect.<\/p>\n<ul>\n<li>Peter Harrell, a visiting scholar at Georgetown Law&#8217;s Institute of International Economic Law, <a href=\"https:\/\/x.com\/petereharrell\/status\/2079326559958356085\" target=\"_blank\">wrote on X on Monday night<\/a> that a potential challenger could argue that the administration bypassed the required procedures to impose the tariffs.<\/li>\n<li>Ilya Somin \u2014 who helped successfully challenge President Trump&#8217;s International Emergency Economic Powers Act tariffs \u2014 wrote that Congress <a href=\"https:\/\/reason.com\/volokh\/2026\/07\/20\/trump-imposes-new-illegal-tariffs-on-canada\/\" target=\"_blank\">&#8220;superseded&#8221; Section 338<\/a> through later trade legislation, leaving it without independent authority to impose new tariffs.<\/li>\n<\/ul>\n<p><strong>The other side:<\/strong> A senior administration official argued Section 338&#8217;s &#8220;terms are clear&#8221; and said Canada&#8217;s retaliation and preferential treatment of third countries &#8220;fits squarely&#8221; within the statute.<\/p>\n<p><strong>The bottom line: <\/strong>&#8220;The toothpaste is out of the tube. &#8230; We would not be surprised to see [Section] 338 wielded against others,&#8221; TD Cowen&#8217;s Chris Krueger wrote in a client note Monday night, adding that &#8220;338 is the new IEEPA.&#8221; <\/p>\n<ul>\n<li>&#8220;Litigation [is] likely a question of when, not if, but that is likely a 2027 \u2014 or even 2028 \u2014 story. In the near term, elbows up across the board,&#8221; Krueger added.<\/li>\n<\/ul>\n<p><strong>Trump stopped short<\/strong> of targeting some of Canada&#8217;s most strategically important exports, exempting autos, lumber, semiconductors, pharmaceuticals and aircraft products from the new duties.<\/p>\n<p><strong>The intrigue: <\/strong>That&#8217;s consistent with an administration trying to maximize negotiating leverage while limiting economic blowback, at a time when American voters are angry about inflation and the Iran war is keeping energy prices elevated.<\/p>\n<ul>\n<li>The administration took the same tack last week, when it <a href=\"https:\/\/www.axios.com\/2026\/07\/16\/trump-tariffs-brazil\" target=\"_blank\">targeted Brazil<\/a>, but left out key consumer goods like coffee and beef.<\/li>\n<li>Still, the tariffs will apply to goods that qualify for duty-free treatment under the <a href=\"https:\/\/www.axios.com\/2018\/11\/30\/trump-trudeau-usmca-trade-deal-signing-g20\" target=\"_self\">U.S.-Mexico-Canada Agreement<\/a>, a departure from several earlier Trump tariff programs. Economists have argued that this carveout has shielded the U.S. from the worst of the Trump tariffs&#8217; potential inflationary effects.<\/li>\n<\/ul>\n<p><strong>The 30-day delay <\/strong>before the tariffs take effect leaves room for an off-ramp. A senior White House official stressed they remain open to negotiations, while Canadian Prime Minister Mark Carney condemned the tariffs but likewise pledged to intensify talks before August.<\/p>\n<ul>\n<li>A senior administration official said the measures are separate from Trump&#8217;s previously threatened &#8220;wildfire tariffs,&#8221; though the official said the White House is considering options on that front.<\/li>\n<li>It&#8217;s unclear which legal authority such tariffs would be imposed under.<\/li>\n<\/ul>\n<script async=\"async\" data-cfasync=\"false\" src=\"https:\/\/pl30214220.effectivecpmnetwork.com\/9ab3d4df8a7e1a6171e16ddbf732cc19\/invoke.js\"><\/script>\r\n<div id=\"container-9ab3d4df8a7e1a6171e16ddbf732cc19\"><\/div>\r\n\n","protected":false},"excerpt":{"rendered":"<p>The Trump administration keeps finding new ways to wage trade wars. As one novel tariff authority nears its expiration, it&#8217;s testing another \u2014 threatening huge duties on Canadian goods under a never-before-used law. Why it matters: The administration&#8217;s willingness to test new trade authorities makes tariff policy harder for businesses, investors and foreign governments to&#8230;<\/p>\n","protected":false},"author":1,"featured_media":17560,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.axios.com\/OYLNfj4K7RTerwc_FFN45tVwPaE=\/1366x768\/smart\/2025\/04\/15\/154043-1744731643123.jpg","fifu_image_alt":"","footnotes":""},"categories":[17],"tags":[],"class_list":["post-17559","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political-news"],"brizy_media":[],"_links":{"self":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/17559","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17559"}],"version-history":[{"count":0,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/posts\/17559\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=\/wp\/v2\/media\/17560"}],"wp:attachment":[{"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17559"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17559"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usnews-14267fa.ingress-comporellon.ewp.live\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17559"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}