Trump's Tariffs: Challenges and Uncertainties Facing Political, Legal Avenues
Market Volatility as a Potential Catalyst for Change
Despite widespread opposition, President Trump's decision to impose tariffs on major trading partners may prove difficult to reverse. Market volatility, however, could potentially sway Trump's opinion or lead to an extended sell-off.
Scattered Congressional Opposition
Democrats have denounced the move and proposed a bill to reclaim some of Congress's tariff authority. However, given the current political climate and the history of delegating tariff power to the executive branch, their efforts face significant challenges.
President's Wide Array of Options
Trump has utilized laws such as the International Emergency Economic Powers Act, which grants him substantial leeway. Other authorities, including the Tariff Act of 1930 and the Trade Expansion Act of 1962, provide additional tariff-related powers.
Limited Bipartisan Resistance
While many Republicans have expressed concerns or remained silent, significant bipartisan opposition remains elusive. Canada is attempting to exploit this divide through retaliation plans targeting specific electoral strongholds.
GOP Loyalty and Congressional Revenue Needs
Any challenge to Trump would require the GOP to confront its party leader. Moreover, investors should consider the potential revenue generated by tariffs, which may appeal to Congress in light of funding needs.
Legal Challenges and Uncertainties
Legal challenges are likely, with business groups planning to file suit. However, Trump's invocation of national security may make courts hesitant to intervene. Lawsuits could face protracted litigation, providing no immediate obstacle to the tariffs.
China's WTO Complaint and Trump's Future Plans
China has pledged to file a lawsuit against the US through the WTO, but the body's authority has been undermined. Meanwhile, Trump has hinted at further tariffs, including against the European Union.