Latest news with #Smoot-HawleyTariffActof1930
Hindustan Times
6 hours ago
- Business
- Hindustan Times
Trump's New Trade Order Is Fragile
President Trump has achieved the remarkable: raising tariffs by more than the notorious Smoot-Hawley Tariff Act of 1930, while—it appears—avoiding the destructive trade war that followed. Including the deal struck over the weekend with the European Union, the U.S. will impose an effective tariff rate of about 15% on its trading partners, by far the highest since the 1930s, according to JPMorgan Chase. Japan and the EU have together committed to investing $1.15 trillion in the U.S. Europe also agreed to energy and military purchases. And what did the U.S. give up in return? Nothing. So Trump has hit his goals, for now. But these deals don't yet represent a new trade order. They are sort of a way station, more fragile and with less legitimacy than the system they have supplanted. The formula for this achievement was distinctively Trumpian. The president calculated that others had more to lose from a trade war than the U.S. He picked off each trading partner in turn with the prospect that failure to strike a deal on his terms would result in worse treatment later. Among American allies, only the EU has the heft to inflict enough pain on American companies to change Trump's calculus. But despite drawing up plans for retaliation, it never pulled the trigger. Along with the economic pain of a trade war, Europe feared Trump would abandon Ukraine and perhaps NATO altogether. A one-sided deal was the price of keeping, for now, Trump committed to the trans-Atlantic security alliance. Of the major trading partners yet to strike deals, South Korea, Mexico and Canada can likely expect, like the U.K., Japan and the EU, to give up plenty and get nothing in return. China, the only country to have broadly retaliated, might fare differently. Trump has avoided a trade war, but it remains to be seen if the trade peace will last. Trade peace, for now Since the 1980s, Trump has believed that other countries have ripped off the U.S., producing deep trade deficits. His solution: charge for access to the U.S. market and the protection of its military. Others have now accepted his terms for access to the market, while NATO partners have agreed to boost defense spending to 5% of GDP. This seems to have softened Trump's prior antipathy toward the alliance and Ukraine. On Monday, he shortened the deadline for Russia to agree to a cease-fire with Ukraine or face sanctions. It might be too soon to announce 'mission accomplished,' but it certainly looks like Trump has begun rebalancing the relationship between the U.S. and its allies. 'The two concerns Trump had about Europe is that they were free riding on the U.S. security umbrella and their trade was unbalanced, with their market a fortress,' said Mujtaba Rahman, managing director for Europe at Eurasia Group, a consultancy. 'On both, Trump has implemented a shakedown.' The 15% baseline tariff and 5% military commitment represent Trump wins that put the trans-Atlantic alliance on a 'slightly more solid' basis than in February, he said. Whether tariffs achieve Trump's economic goals remains to be seen. In a recent speech, Trump's trade ambassador, Jamieson Greer, set three benchmarks: first, reduce the goods trade deficit; second, raise after-inflation incomes; and third, boost manufacturing's share of gross domestic product. The incentives in these deals to reshore production and purchase American goods should help meet these relatively low bars. As for how much of the tariffs consumers will ultimately bear, the jury is still out. From 1947 through 2012, the U.S. presided over a steady fall in trade barriers and growing economic integration. It came through painstakingly negotiated pacts. Everyone gained something and gave something up and were thus invested in the pacts' success. Such pacts 'require Congress to approve them, are deep and substantive, take a long time to negotiate, and last a long time,' said Doug Irwin, a trade historian at Dartmouth College. 'They are a binding commitment on the U.S.' By contrast, Irwin said, these latest agreements are 'handshake deals' with a president who isn't legally bound to adhere to the terms. Trump is at liberty to threaten higher tariffs again for any reason, from wresting Greenland from Denmark to protecting U.S. tech companies from European taxes or censorship. Europe, having foresworn retaliation, has few chips with which to bargain tariffs down, under this or a future president. Trump acted entirely without Congress. Indeed, one court has already ruled his use of a sanctions law to impose across-the-board tariffs was illegal. Should an appeals court uphold that finding, the legality of those deals would come into doubt. (Trump could turn to a different law that limits tariffs to 15%, for 150 days.) The one-sided nature of these deals also makes them more fragile. Other countries will be less willing to comply with something they don't think is in their economic interest, especially with so many details unsettled. Already, Japan has cast doubt on Trump's interpretation of its $550 billion investment commitment, and the Europeans' $600 billion pledge seems similarly vague. Deals made under duress are politically unpopular and thus less durable. Especially noteworthy was the negative reaction of far-right populist leaders who are already hostile to the EU and trade deals. Marine Le Pen, a leader of France's populist right-wing National Rally, which is slightly favored to win the presidential election in 2027, called the EU deal a 'political, economic and moral fiasco.' Alice Weidel, leader of Germany's far-right Alternative for Germany, wrote on X, 'The EU has let itself be brutally ripped off.' Trump got his deals because of the leverage other countries' deep economic and security ties gave to the U.S. In coming years, that leverage will wane as those countries cultivate markets elsewhere and build up their own militaries. The resulting international system will be less dependent on the U.S.—and less stable. Write to Greg Ip at
Mint
8 hours ago
- Business
- Mint
Trump's new trade order is fragile
President Donald Trump has achieved the remarkable: raising tariffs by more than the notorious Smoot-Hawley Tariff Act of 1930, while—it appears—avoiding the destructive trade war that followed. Including the deal struck over the weekend with the European Union, the U.S. will impose an effective tariff rate of about 15% on its trading partners, by far the highest since the 1930s, according to JPMorgan Chase. Japan and the EU have together committed to investing $1.15 trillion in the U.S. Europe also agreed to energy and military purchases. And what did the U.S. give up in return? Nothing. So Trump has hit his goals, for now. But these deals don't yet represent a new trade order. They are sort of a way station, more fragile and with less legitimacy than the system they have supplanted. The formula for this achievement was distinctively Trumpian. The president calculated that others had more to lose from a trade war than the U.S. He picked off each trading partner in turn with the prospect that failure to strike a deal on his terms would result in worse treatment later. Among American allies, only the EU has the heft to inflict enough pain on American companies to change Trump's calculus. But despite drawing up plans for retaliation, it never pulled the trigger. Along with the economic pain of a trade war, Europe feared Trump would abandon Ukraine and perhaps NATO altogether. A one-sided deal was the price of keeping, for now, Trump committed to the trans-Atlantic security alliance. Of the major trading partners yet to strike deals, South Korea, Mexico and Canada can likely expect, like the U.K., Japan and the EU, to give up plenty and get nothing in return. China, the only country to have broadly retaliated, might fare differently. Trump has avoided a trade war, but it remains to be seen if the trade peace will last. Since the 1980s, Trump has believed that other countries have ripped off the U.S., producing deep trade deficits. His solution: charge for access to the U.S. market and the protection of its military. Others have now accepted his terms for access to the market, while NATO partners have agreed to boost defense spending to 5% of GDP. This seems to have softened Trump's prior antipathy toward the alliance and Ukraine. On Monday, he shortened the deadline for Russia to agree to a cease-fire with Ukraine or face sanctions. It might be too soon to announce 'mission accomplished," but it certainly looks like Trump has begun rebalancing the relationship between the U.S. and its allies. 'The two concerns Trump had about Europe is that they were free riding on the U.S. security umbrella and their trade was unbalanced, with their market a fortress," said Mujtaba Rahman, managing director for Europe at Eurasia Group, a consultancy. 'On both, Trump has implemented a shakedown." The 15% baseline tariff and 5% military commitment represent Trump wins that put the trans-Atlantic alliance on a 'slightly more solid" basis than in February, he said. Whether tariffs achieve Trump's economic goals remains to be seen. In a recent speech, Trump's trade ambassador, Jamieson Greer, set three benchmarks: first, reduce the goods trade deficit; second, raise after-inflation incomes; and third, boost manufacturing's share of gross domestic product. The incentives in these deals to reshore production and purchase American goods should help meet these relatively low bars. As for how much of the tariffs consumers will ultimately bear, the jury is still out. From 1947 through 2012, the U.S. presided over a steady fall in trade barriers and growing economic integration. It came through painstakingly negotiated pacts. Everyone gained something and gave something up and were thus invested in the pacts' success. Such pacts 'require Congress to approve them, are deep and substantive, take a long time to negotiate, and last a long time," said Doug Irwin, a trade historian at Dartmouth College. 'They are a binding commitment on the U.S." By contrast, Irwin said, these latest agreements are 'handshake deals" with a president who isn't legally bound to adhere to the terms. Trump is at liberty to threaten higher tariffs again for any reason, from wresting Greenland from Denmark to protecting U.S. tech companies from European taxes or censorship. Europe, having foresworn retaliation, has few chips with which to bargain tariffs down, under this or a future president. Trump acted entirely without Congress. Indeed, one court has already ruled his use of a sanctions law to impose across-the-board tariffs was illegal. Should an appeals court uphold that finding, the legality of those deals would come into doubt. (Trump could turn to a different law that limits tariffs to 15%, for 150 days.) The one-sided nature of these deals also makes them more fragile. Other countries will be less willing to comply with something they don't think is in their economic interest, especially with so many details unsettled. Already, Japan has cast doubt on Trump's interpretation of its $550 billion investment commitment, and the Europeans' $600 billion pledge seems similarly vague. Deals made under duress are politically unpopular and thus less durable. Especially noteworthy was the negative reaction of far-right populist leaders who are already hostile to the EU and trade deals. Marine Le Pen, a leader of France's populist right-wing National Rally, which is slightly favored to win the presidential election in 2027, called the EU deal a 'political, economic and moral fiasco." Alice Weidel, leader of Germany's far-right Alternative for Germany, wrote on X, 'The EU has let itself be brutally ripped off." Trump got his deals because of the leverage other countries' deep economic and security ties gave to the U.S. In coming years, that leverage will wane as those countries cultivate markets elsewhere and build up their own militaries. The resulting international system will be less dependent on the U.S.—and less stable. Write to Greg Ip at
Atlantic
28-06-2025
- Business
- Atlantic
A Reboot for Capitalism's Operating System
The world economy is like a supercomputer that churns through trillions of calculations of prices and quantities, and spits out information on incomes, wealth, profits, and jobs. This is effectively how capitalism works—as a highly efficient information-processing system. To do that job, like any computer, capitalism runs on both hardware and software. The hardware is the markets, institutions, and regulatory regimes that make up the economy. The software is the governing economic ideas of the day—in essence, what society has decided the economy is for. Most of the time, the computer works quite well. But now and then, it crashes. Usually when that happens, the world economy just needs a software update—new ideas to address new problems. But sometimes it needs a major hardware modification as well. We are in one of those Control-Alt-Delete moments. Against the background of tariff wars, market angst about U.S. debt, tumbling consumer confidence, and a weakening dollar watched over by a heedless administration, globalization's American-led era of free trade and open societies is coming to a close. The global economy is getting a hardware refit and trying out a new operating system—in effect, a full reboot, the likes of which we have not seen in nearly a century. To understand why this is happening and what it means, we need to abandon any illusion that the worldwide turn toward right-wing populism and economic nationalism is merely a temporary error, and that everything will eventually snap back to the relatively benign world of the late 1990s and early 2000s. The computer's architecture is changing, but how this next version of capitalism will work depends a great deal on the software we choose to run on it. The governing ideas about the economy are in flux: We have to decide what the new economic order looks like and whose interests it will serve. The last such force-quit, hard-restart period was in the 1930s. In the United States, the huge liquidity crunch caused by the 1929 Wall Street crash combined with the Smoot-Hawley Tariff Act of 1930 to kill commercial activity and trigger the Great Depression. Bank failures swiftly turned into a mass failure of firms and industries; wages tumbled and unemployment shot up, in some areas to a quarter of the workforce. Despite the state interventions of Franklin D. Roosevelt's New Deal program, the economic situation stabilized and returned to sustained growth only in the '40s, when wartime re-armament delivered a huge industrial stimulus. The computer built for the postwar period was solving to avoid a repeat of the '30s. The software update was a new governing idea of full employment. Achieving that aim as the central raison d'être of the economy also entailed several hardware modifications. One was a policy of forcing wealth owners to use their capital locally by limiting their ability to move it out of the country. To maintain their profits, they were obliged to invest in technology that would increase productivity. In this virtuous cycle, high productivity allowed for high wages, which the state could then tax to fund social transfers. Combined with the government-spending power of revenues raised by high marginal taxes, America's welfare state was born. Labor unions were seen more as partners in business enterprises, and political parties needed to appeal to the median, middle-income voter. These changes produced a political system in which the two main parties competed over a centrist consensus so bipartisan that people struggled to see the difference between Democrats and Republicans. The New Deal did indeed avoid a repeat of the '30s, but its software had a bug. If full employment meant running the economy hot to keep unemployment down, then eventually employers' ability to keep their profits up by augmenting productivity would fail as workers' demand for higher wages outstripped firms' ability to pay them. By the mid-'70s, profits were falling as wages and inflation rose, so the U.S. investor class reached for the reboot switch. Holders of capital founded political-action committees, funded think tanks and media outlets to promote free enterprise, and helped get Ronald Reagan elected in 1980. Reagan busted unions and deregulated markets, accelerating the movement of capital from union strongholds to 'right to work' states, which was effectively an onshore tryout of offshoring. Simultaneously, the Federal Reserve under Paul Volcker raised interest rates to almost 20 percent to squeeze inflation, a measure that induced a harsh recession, which disciplined labor further by raising unemployment. As all of that implies, full employment ceased to be the governing economic idea. The software rewrite of this era instead made price stability, capital mobility, and the restoration of profits via globalization the new priorities. The hardware modification was to make central banks more independent—the better to enforce price stability and enable the recovery of profits. These new priorities were justified by Margaret Thatcher's famous nostrum that 'there is no alternative.' This reboot has come to be known as neoliberalism. The computer was humming along again when I arrived from Scotland to attend graduate school in New York in the summer of 1992. The U.S. had entered a period that Ben Bernanke, then a Federal Reserve governor (and later Fed chair), called the 'Great Moderation.' Globalization was good; finance was the future. Central banks had delivered sustainable prosperity, and the investor class saw its profits restored on a transnational scale. Once again, however, the system had a bug. The increase in profitability came not only as a result of improved domestic productivity but also at the expense of once-stable industrial regions of the U.S., as jobs, skills, and capital flowed out. Meanwhile, the authorities had presided over the deregulation of financial markets, which supplied the economy with copious credit. But one effect of this credit was to mask a chronic lack of wage growth and a rising level of inequality. That turned out to be a major hardware issue: Neoliberalism's financialized solutions to economic problems became liabilities when the next crash came, in 2008, as a tsunami of credit became an earthquake of debt. The hardware modification of the era—independent central banks—saved the system with colossal bailouts of the private sector, paid for by the public sector in the form of ever greater debt and more stringent fiscal policies. This liquidity dump enabled the economy to stagger on through the slowest-ever recovery from a recession—but only by pushing the bulk of the costs of those bailouts onto those least able to bear them. Signs of profound public disaffection in Western countries started to show in 2016: first with the Brexit vote in the United Kingdom, then with Donald Trump's rise in the U.S. Trump has acted as a catalyst for the next reboot. His hostile takeover of the Republican Party was leveraged by a new, more working-class electoral coalition based on a populist politics of resentment. His antipathy toward China may lack analysis, but by articulating a sense that American workers had lost out in the neoliberal era, it gave voice to authentic grievance. Trump's chaotic first term made only limited progress in forcing another reboot, but his second term seems likely to foreclose on the Biden administration's interim solution of keeping the neoliberal system running with a limited New Deal–like reindustrialization in new sectors such as renewable energy. The Inflation Reduction Act was a significant reinvention of industrial policy, something not seen for decades outside a national-security context, but Trump is abandoning this sort of intervention. Instead, he has chosen tariffs as his singular tool for reshoring industry. To the extent that the Trumpian approach coheres, the economy's new goal is to benefit native workers by restoring carbon-heavy industrial jobs while removing immigrants from the labor pool and encouraging women to have more children and become homemakers. This is not so much the building of a new computer system as the retrofitting of several old ones—a version of what a critic of Thatcherism once called ' regressive modernisation.' The MAGA economic ideal derives from a blend of the 1950s, which saw a huge expansion of manufacturing jobs for men, and the '40s, when women were pushed out of the wartime jobs and back into the home, and immigration was tightly restricted. This boost for the native labor force is in turn yoked to a 19th-century, mercantilist 'spheres of influence' foreign policy. This hodgepodge of historical impulses speaks to the unsettled nature of Trumponomics. No new economic order is discernible, because the governing idea is still contested. The national-conservative movement, which seeks to rebrand the GOP as a workers' party, has one vision, but other forces are also trying to shape this moment. The 'Dark Enlightenment' wing of the tech sector is a player, too. Overinvested in AI and keen to grab government funding that was earmarked for elite research universities, the Silicon Valley billionaires imagine an economy that runs not as a return to hard-hat industry's glorious past but as a posthuman future of automation and space exploration. The problem with such projects is that we cannot go back, any more than we can leap into the future; we can live only in the present. The populist-right reset will fail because tariffs may spur some reindustrialization, but robots will be the main producers, not working-class men on an assembly line. And little suggests that most women will relish the return to hearth and home that is planned for them. The techno-futurist update has nothing to offer the great mass of humanity and would benefit only the tech lords most invested in its realization. So we seem to be stuck, which is why this moment is so perplexing. The system upgrade is pending: The right is offering its regressive modernization as the update. The left has yet to figure out which one of three paths it wants to take. One possibility is to stay put with the gerontocracy of the Democratic Party and wait for Trumpism to implode. That might happen, and the Democrats' current position as the party of the institutionalist status quo makes this the most likely path. But this will be a losing proposition if no reversion to the mean of the pre-MAGA American politics occurs. The effort by Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders to rally an anti-oligarchy movement advocates for a second option, of left-wing populism. But whether this appeals to young men who have been drawn to Trump, as well as young women who poll as more progressive, and can create a broad-enough coalition remains to be seen. A third approach is the 'abundance' agenda, promoted recently by Ezra Klein and The Atlantic 's Derek Thompson, which proposes a progressive political program based on lower-regulation, pro-growth policies as a spark for renewed economic growth—though critics on the left accuse this approach of failing to confront corporate power. To develop an alternative to the regressive modernization underpinning Trump's reelection, the left must come up with a governing economic idea that can compete. Technocratic fixes of the old system look very unlikely to inspire a broad-enough coalition to defeat the potent, if unstable, electoral alliance that reelected Trump. The most promising avenue—one that could address the needs of millions of Americans who feel shut out of growth and prosperity and alienated from America's governing elite—might be a fusion of AOC/Bernie populism with a more political, less technocratic version of abundance. Regardless of whether such a project can materialize, we have to accept that a transformation is under way. A new economic order is forming—which means that it is not yet fixed and can still be shaped. But time is running out. As jumbled as the regressive modernization is, it could win the day if we do not come up with a different governing idea of what the economy is and whom it is for. And we need enough people in our democracy to agree that this new purpose is the right one. The ideas are there to be found. They just need politicians with the courage to try them.
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Business Standard
30-05-2025
- Business
- Business Standard
15% tariff for 150 days: Trump admin prepares 'Plan B' after court ruling
The Trump administration is preparing a legal 'Plan B' to maintain its sweeping tariffs after a US court ruled that the president overstepped his authority by using emergency economic powers to impose them. The new approach would rely on provisions under the Trade Act of 1974, starting with a temporary 15 per cent tariff for 150 days, followed by more targeted duties using a separate clause aimed at unfair trade practices, The Wall Street Journal reported on Friday. The backup plan comes after a federal appeals court on Thursday allowed the existing tariffs to remain in place while the administration challenges the lower court's ruling. However, because the legal basis for the policy is uncertain, officials are now looking at other ways to protect the president's trade agenda. Trump admin's 'Plan B' follows a two-step approach To do this, the Trump administration would need to apply a two-step approach. The first move would involve invoking a never-before-used provision: Section 122 of the Trade Act of 1974. This Act permits short-term tariffs of up to 15 per cent for 150 days to address trade imbalances. This stopgap would buy time to implement a longer-term solution under Section 301, which requires a more detailed process but is seen as more legally sound. Officially, no new announcement on tariffs has been made; however, White House officials have confirmed that alternatives are being considered. Press Secretary Karoline Leavitt said the administration is weighing other legal avenues as it appeals the court's decision, though she did not elaborate. Peter Navarro, senior trade adviser, appeared to confirm the two-pronged approach and also suggested the administration could explore other trade laws, including the Smoot-Hawley Tariff Act of 1930 and provisions linked to national security. 15 per cent tariffs for 150 days possible under US law Legal experts confirmed to The Wall Street Journal that the proposed Plan B is more 'defensible' than the existing approach, which was based on the International Emergency Economic Powers Act (IEEPA), a law never before used to impose tariffs. The US Court of International Trade on May 28 ruled that Trump's use of IEEPA to address trade deficits was unlawful. The court found that the law does not permit the president to levy wide-ranging import duties without congressional approval. However, on May 29, a federal appeals court allowed the tariffs to remain in place temporarily while the Trump administration appeals the decision. Despite the court setback, the administration believes shifting to other statutory tools could preserve tariff continuity and maintain leverage in ongoing trade negotiations. Some analysts say the court ruling might even open the door to a broader US–EU trade deal by removing one of the major points of tension.
Mint
30-05-2025
- Business
- Mint
Trump's team plots plan B for imposing tariffs
President Trump's trade team is readying its plan B. The administration's tariff strategy was undermined when a court this week found it was illegal for Trump to impose sweeping duties by using emergency economic powers. A federal appeals court on Thursday allowed his duties to stay in effect while the administration's appeal moves forward, but U.S. officials are weighing their options should they need to find a new legal authority to impose the president's steep tariffs, which he argues will help rebalance trade in America's favor. The potential pivot reflects the challenges to Trump's aggressive trade policy, which relied on a novel interpretation of trade law. Typically, tariffs are imposed using targeted authority delegated to the president by Congress, but Trump's team relied on little-used emergency powers to impose the bulk of his wide-ranging second-term tariffs quickly. With that strategy under threat, the president's team is weighing a twofold response, according to people familiar with the matter. First, the administration is considering a stopgap effort to impose tariffs on swaths of the global economy under a never-before-used provision of the Trade Act of 1974, which includes language allowing for tariffs of up to 15% for 150 days to address trade imbalances with other countries, the people said. That would then buy time for Trump to devise individualized tariffs for each major trading partner under a different provision of the same law, used to counter unfair foreign trade practices. That second step requires a lengthy notification and comment process, but is seen by administration officials as more legally defensible than the tariff policy that was found to be illegal this week. The alternative provision has been used many times in the past, including for Trump's first-term tariffs on China. Peter Navarro, senior counselor for trade and manufacturing, is floating alternative strategies. The conversations remained fluid, and the administration hadn't made a final decision, the people added. The administration could wait to implement any alternative plans after the federal appeals court allowed Trump's emergency tariffs to stay in place during the appeals process. The White House and the Office of the U.S. Trade Representative didn't respond to requests for comment. Karoline Leavitt, the White House press secretary, said Thursday that the administration is weighing other options to impose tariffs as it appeals the court rulings, but she didn't give specifics. Peter Navarro, senior counselor for trade and manufacturing, appeared to confirm that the administration is considering a twofold alternative tariff plan, which would first use Section 122 of the 1974 trade law, and then Section 301. 'Those are the kinds of thoughts" the economic team is considering, he said when asked about those provisions on Bloomberg TV. Navarro also suggested that the administration could use the Smoot-Hawley Tariff Act of 1930, which has a provision that allows for tariffs on nations that discriminate against America. The U.S. could also expand the use of tariffs imposed citing national-security concerns. All of the options under consideration now were discussed in the early weeks of the administration, but officials opted to instead impose tariffs under the International Emergency Economic Powers Act, also known as IEEPA. The law had never been used before to impose tariffs but allowed the administration to move quickly to impose levies on virtually every global trading partner. In its decision Wednesday, the U.S. Court of International Trade struck down Trump's use of IEEPA to address trade deficits. In doing so, the court pointed to Section 122, the measure Trump's team is now weighing as a stopgap policy, saying part of federal law already grants explicit authority to address 'large and serious balance-of-payments deficits." Pivoting to a different tariff authority could pose risks. If the administration moves to use a different law, that could be seen by courts as admitting defeat in ongoing appeals in the IEEPA case. 'The administration could quickly turn to other tariff authorities, but doing so while the ruling is under judicial review could be seen as a lack of confidence in the final decision," said Everett Eissenstat, who served as deputy director of the National Economic Council in Trump's first term. Trump's alternative plan would likely still face legal challenges, said Peter Harrell, who served as senior director for international economics on the Biden administration's National Security Council. But both elements are on firmer legal ground than the IEEPA tariffs, he said. The Court of International Trade 'seemed to indicate that Section 122 is how you'd address a trade deficit," Harrell said. Section 301, he added, has a long case law history, and action under that provision would likely be upheld as long as the Trump administration can point to unfair trade practices from each targeted nation. In all, the plan is 'certainly more defensible than the IEEPA tariffs," he said. Trump's potential alternative tariff plan has an advantage: Using another law to reimpose the tariffs could smooth over any interruptions in tariffs because of the court's ruling, preserving Trump's leverage in ongoing trade talks. In a filing asking for an emergency stay on the Court of International Trade's decision, the administration said the ruling 'jeopardizes ongoing negotiations with dozens of countries by severely constraining the President's leverage and undermining the premise of ongoing negotiations." That appeared to contradict National Economic Council Director Kevin Hassett, who insisted Thursday that trade negotiations will continue unabated and that three deals are close to being completed. Navarro similarly said that 'nothing has really changed." The ruling on Wednesday came days after the president threatened to impose 50% tariffs on the European Union and then quickly pulled back to allow for negotiations until July 9—a deadline now thrown into question. A rise in global stocks supports the EU's argument that tariffs aren't good for anyone, Spanish Minister of Economy Carlos Cuerpo said Thursday. He said the bloc is taking 'a constructive approach to reaching an agreement and, if possible, even reducing barriers" below pretariff dispute levels. Some analysts said the ruling could ease the path for a trade deal between the U.S. and EU by removing, if the decision survives Trump's appeal, a key sticking point from the negotiations. Ignacio García Bercero, a former EU trade official, said that removing the U.S.'s 10% tariff on European imports and the threat of further across-the-board tariffs would allow trade negotiators to focus instead on the U.S.'s sectoral tariffs on such industries as steel and automobiles. Those were implemented on national-security grounds, not using the economic-powers law, and will be unaffected by the continuing court battle. 'If there's a more pragmatic attitude from the United States and also, of course, from the European Union, one would have the opportunity to try to use this to find a more balanced type of agreement that is in the interest of both sides," he said. Write to Gavin Bade at and Kim Mackrael at
