“The U.S. is the second-largest steel importer in the world, according to the International Trade Administration. In 2023, the U.S. imported 25.6 million metric tons of steel and exported a little more than 8.2 million metric tons. About half of the aluminum used domestically is imported and by global standards, the U.S. has a very small aluminum smelting industry. Steel and aluminum imports to the U.S. were valued at nearly $50 billion in 2024, per Bloomberg.”
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“Imposing levies on steel and aluminum will increase costs for domestic energy projects (which will be passed on to consumers) while hamstringing America’s energy dominance. In recent years, high material costs (and burdensome regulations) have led to cancellations or price tag hikes for offshore wind energy, advanced nuclear power, and transmission line projects. Instead of building oil pipelines to the U.S., these trade barriers could also incentivize Canadian energy companies to invest in other markets, such as Japan, says Wayne Winegarden, an economist at the Pacific Research Institute, a free market think tank. “This really is one of the dumbest things we could be doing,” Winegarden tells Reason.
Importantly, these tariffs won’t accomplish Trump’s stated goal of “making America rich again.”
A study from the International Trade Commission found tariffs on steel (25 percent) and aluminum (10 percent) implemented during the first Trump administration decreased production and increased costs in downstream industries that use these materials by 0.6 percent and 0.2 percent, respectively. Total production in downstream industries was $3.5 billion less in 2021 because of these tariffs. The Tax Foundation estimates that repealing tariffs and their quotas would increase long-run gross domestic product by $3.5 billion and create thousands of jobs.”
“If the White House’s preliminary assessment is accurate, it would be the largest tax increase on Americans since World War II—and one that Trump would apparently seek to implement without congressional approval.
The specifics of Trump’s reciprocal tariffs plan remain sparse. The executive order Trump signed Thursday instructed the Department of Commerce and the U.S. Trade Representative to develop new proposed tariff levels that take into account the tariffs charged by other countries to import American goods, as well as industrial subsidies, value-added taxes, and other economic policies that Trump views as unfair. It will take weeks (and perhaps longer) for the new tariffs to be calculated and rolled out, and the changes may be implemented on a country-by-country basis, according to Megan Cassella, a reporter for CNBC.”
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“The direct costs of taxes on so many imports would be only part of the problem. Trump’s idea of charging different tariffs on every country’s exports means the same product could be charged wildly different tax rates depending on where it was sourced. Those tariff rates would also be subject to constant fluctuation, as other countries shift their policies—as many will likely do in response to Trump’s new tariffs. That’s a recipe for not only higher taxes on American businesses that rely upon imports but also a constant state of uncertainty.”
“President Donald Trump on Thursday signed his plan for reciprocal tariffs but delayed their implementation as his administration launches negotiations on a one-by-one basis with nations that could be impacted.
“The Plan shall ensure comprehensive fairness and balance across the international trading system,” read the memorandum signed by Trump.
The studies of each country could be completed by April 1, incoming Commerce Secretary Howard Lutnick said Thursday while standing at Trump’s side, adding that then “we’ll hand the president the opportunity” to start implementing them as soon as on April 2.”
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“Nations from India to Brazil to South Korea have long charged higher average duties on various goods and will clearly be in the middle of coming talks.
Trump’s memo Thursday outlined how non-tariff barriers, such as the VAT, would also be subject to reciprocity.
“For purposes of this United States Policy, we will consider Countries that use the VAT System, which is far more punitive than a Tariff, to be similar to that of a Tariff,” Trump posted to Truth Social on Thursday.
That issue is likely to be a sizable stumbling block in relations with the European Union.”
LC: VATs are applied to domestic products and imports, so treating a VAT like an import tariff that is just applied to the import, makes no sense.
“When Trump imposed tariffs during his first term, he cited authority under other laws, like the Trade Act of 1974 and the Trade Expansion Act of 1962. At one point he threatened to invoke the IEEPA to impose tariffs on Mexican goods, but he never followed through, perhaps amid concern it would have been seen as legally dubious.
That’s because the IEEPA is typically used to impose sanctions — not tariffs — on other countries.
But Trump’s decision to use the IEEPA this time, when he’s aggressively flexing his executive authority, may be no accident: Unlike other trade laws, the IEEPA has the fewest procedural requirements and safeguards.
It gives the president the power to regulate or prohibit a broad swath of economic activity in order “to deal with any unusual and extraordinary threat” that is based largely outside the United States and concerns “the national security, foreign policy, or economy of the United States.” In the executive orders that announced the tariffs on Canada, Mexico and China, Trump invoked the opioid crisis, as well as illegal immigration from Canada and Mexico.”
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“No president has ever used the IEEPA to impose tariffs before. In fact, the IEEPA was passed as part of a broader effort by Congress in the 1970s to limit the president’s ability to exercise emergency economic powers. The framework ultimately created, however, completely fails to rein in the president, according to Timothy Meyer, a law professor and expert on international trade law. And Trump is taking advantage of that failure by pushing beyond what the Constitution intended.
“This strikes me as unconstitutional,” Meyer told me. “It’s very difficult to see how the framers would’ve thought that it was constitutional for the president to simply have the power on the drop of a hat to impose an across-the-board 25 percent tariff on our major trading partners.”
The Constitution gives Congress the authority to “lay and collect Taxes, Duties, Imposts and Excises.” Between Trump’s tariffs and his unilateral effort to halt federal spending, he has now effectively claimed that he has both taxing and spending authority — a government all his own. Congress barely even needs to exist in this framework.”
“The high tariffs that America imposed during the late 19th century did not make America rich and did not make American manufacturing strong. It’s also absurd to claim that the country was at its wealthiest in an era when most people did not have access to indoor plumbing, electricity, or modern medical care—and when the average person was, objectively, much poorer.”
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“If tariffs are as great as Trump says they are, he should be implementing them no matter what the leaders of any other silly little countries say or do. We can tax our way to prosperity, Trump claims, but we’ll just…not do that, I guess?
That’s the problem with Trump’s theory about tariffs. Either tariffs are an inherently good and prosperity-generating policy that enriches America, or they are a threat to get other countries to do as Trump says. Both things can’t be true.”
“None of this will do much to stop “dangerous narcotics” from entering the United States, which is Trump’s avowed goal. Interdiction efforts are doomed by the economics of drug prohibition, a challenge that is compounded by fentanyl’s potency, which allows traffickers to distribute large numbers of doses in small packages by land or mail. And Mexican cartels are already working on domestic production of fentanyl precursors in case shipments from China are curtailed. Despite those realities, Trump can still falsely claim he is winning the war on drugs by citing misleading metrics.
Trump said the tariffs would remain in place until the targeted countries took “adequate steps to alleviate the opioid crisis.” Since that criterion is deliberately vague, Trump can simply declare that whatever Mexico, Canada, and China agree to do is “adequate.”
In case that seems too slippery, Trump could cite drug seizure numbers as proof of his success. The beauty of this approach is that Trump can claim victory no matter which way the numbers go.
Given Trump’s promise to “seal the border,” you might expect U.S. drug seizures to go up. But he has previously argued that increased seizures are a sign of failure rather than success.”
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“Unlike “adequate steps” and drug seizure numbers, overdose deaths are a clear measure of whether the “opioid crisis” is getting better or worse. The good news is that drug-related deaths fell precipitously last year after climbing nearly every year for more than two decades. According to preliminary CDC estimates, the death toll during the year ending last August was about 22 percent lower than the total for the previous year—by far the biggest such drop ever recorded.
Inconveniently for Trump, that dramatic decrease happened on Biden’s watch, and there is little reason to think interdiction had anything to do with it. So even if the apparent turnaround continues this year, attributing it to Trump’s tariff-assisted war on drugs would be highly implausible. We can nevertheless expect that Trump will do just that.”
“The annual number of drug-related deaths in the United States rose by 44 percent between 2016 and the last year of his first term. Now Trump blames foreign officials for his failure”
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“As The New York Times reported in December, Mexican cartels already have a backup plan. They are recruiting “chemistry students studying at Mexican universities” to synthesize fentanyl precursors, “freeing them from having to import those raw materials from China.”
Trump thinks the Mexican and Canadian governments could do more to shut down fentanyl manufacturing within their countries. But to the extent they succeeded in doing that, production would simply shift elsewhere, as has happened repeatedly with drugs such as cocaine, heroin, and methamphetamine.”
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“Mexican drug cartels “move illicit fentanyl into the United States, primarily across the southwestern border, often in passenger vehicles,” the CRS noted. “The U.S.
Department of Homeland Security asserts that 90% of [seized] fentanyl is interdicted at ports of entry, often in vehicles driven by U.S. citizens. A primary challenge for both
Mexican and U.S. officials charged with stopping the fentanyl flow is that [the cartels] can meet U.S. demand with a relatively small amount.””
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“Fentanyl also enters the United States by mail, and it is not feasible to intercept all of those shipments, especially given their small size and the enormous volume of packages.”
“On Sunday, Trump ordered 25 percent tariffs on Canada, demanding that Canadians surrender their sovereignty to become “our Cherished 51st State.” He suspended the tariff order the next day, after Canada announced it was stepping up border security. The Canadian government, of course, was mostly rehashing a border security plan that it had already announced in December 2024.”
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“Trump threatened economic sanctions on Colombia after it refused to take U.S. military flights carrying deportees, then claimed Colombia had backed down when it sent its own military to pick them up. Trump threatened to take back the Panama Canal, and the Trump camp claimed victory when Panama announced that it would let its Belt and Road Initiative economic agreement with China expire.”
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“Trump’s threats to Greenland have alarmed Europe, which can act a lot more independently than U.S. neighbors can. European officials are having a “conversation” about whether to cozy up to China in response to U.S. pressure, The Financial Times reports.
“The European borders are sovereign whether it’s north, south, east and west,” French Foreign Minister Jean-Noël Barrot said on the radio, offering to send the French military to defend Greenland. “Nobody can allow themselves to mess around with our borders.”
While it’s unlikely that the United States will get into a shooting war over Greenland, it seems pointless to alienate an important power bloc that was otherwise eager to cooperate against Russia and willing to play ball against China. And the payoff is unclear. Greenland’s population of 60,000, who largely don’t want to be ruled by either the U.S. or Denmark, have been otherwise happy to host U.S. military bases and mining companies, the main U.S. interests in the island.
The real test is how the Trump administration’s bluster fares against rival great powers of China, Russia, and Iran.”
“The International Emergency Economic Powers Act, passed in 1977, grants the president broad authority over economic transactions, and a wide range of abilities to deal with “any unusual and extraordinary threat,” stemming in whole or in part from foreign sources.
Presidents, including Trump’s predecessor Joe Biden, have used the law to impose economic sanctions on other countries, including on Russia after it launched its 2022 war on Ukraine.
But the closest a president has come to citing a national emergency to impose tariffs was when President Richard Nixon used a different law — the Trading with the Enemy Act of 1917 — to levy a temporary universal tariff on all imports in 1971.
Trump justified his new tariffs Saturday by pointing to “the major threat of illegal aliens and deadly drugs killing our Citizens, including fentanyl,” which he claims Mexico, Canada and China are not doing enough to keep from coming into the United States.
But Bill Reinsch, a former Commerce Department official now at the Center for Strategic and International Studies, said Trump’s use of IEEPA to justify his trade actions “doesn’t really pass the red-face test,” setting the stage for a company or trade association whose members have been harmed by the action to sue.
“The question will be, can you find a judge who will write an injunction to stay the tariffs from going into effect,” Reinsch said. “And my prediction is that will be hard, because you’re asking a federal judge to essentially say, ‘I know more than the President does about what an emergency is.’ And I think judges are going to be reluctant to do that.”
That won’t stop a lawsuit from proceeding, most likely all the way to the Supreme Court, Reinsch said, but it could be years before there is a conclusion to the legal battle.
“The courts have historically upheld the president’s power to take emergency actions, especially when they are related to national security. But one important question is whether they will uphold the use of tariffs. In the past, [IEEPA] has only been used to impose sanctions,” said Tim Brightbill, a trade attorney at the law firm Wiley Rein in Washington, DC.
“While it is possible that companies or industry groups would seek an injunction, they probably face an uphill battle blocking the new tariffs,” Brightbill said.”
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“the U.S. effectively killed the WTO Appellate Body during Trump’s first term by blocking the appointment of new judges, leaving it without the ability to adjudicate disputes. And there’s little to suggest the Trump administration would abide by a WTO ruling even if the organization were able to issue one.”