Trump will unleash his 'alternative powers' after court blocks tariffs: analysis

After a court brought President Donald Trump’s tariff plans to a crashing halt, Trump will be turning to “alternative powers” in order to impose his agenda, according to The Economist.

“The administration’s power to impose universal tariffs, the court argued, is specified in a different law: the 1974 Trade Act,” the outlet wrote.

This act allows Trump to impose a 15% tariff for 150 days. “It also allows unlimited levies (tariffs) on specific trading partners whose trade policy the administration judges to be ‘unjustifiable’ or to ‘[burden] or restrict’ American firms,” they said.

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Trump is only able to impose this tariff after an investigation, a public notice, and a comment period. These restrictions were put in place after President Richard Nixon used an earlier version of the bill.

“It is to these alternative powers that Mr. Trump can now be expected to turn,” the Economist wrote. “A universal tariff of 10% applied under the Trade Act would give the administration about five months to have the ruling overturned on appeal.”

This, however, is not realistic because the act would require an investigation into every trading partner that hasn’t come to the table with a trade deal. Thus, the disputes will likely find their way to the Supreme Court.

The outlet noted any trade talks “will now be muddied by the unclear nature of the administration’s authority to follow through on its threats.”

A Goldman Sachs analyst claimed trade uncertainty “has increased, rather than decreased, as a result of the court’s decision.”

Which is likely why the market’s reaction to the ruling was “muted compared with the enormous falls seen after April 2nd.” The outlet added, “Unless Mr. Trump has a light-bulb moment of his own, America’s importers will be doing business in the dark.”