Trump stretches the law to the breaking point to raise taxes on Americans

President Donald Trump’s tariffs have been linked to manufacturing employment declining by roughly 80,000 jobs since the start of his second term. Yet despite their failure to revitalize the very industry that is now in decline, and which Trump promised to aid, the Republican leader is doubling down on tariffs — to the point of stretching the law beyond what it was intended.

Specifically Trump is relying heavily on “section 338 of the Smoot-Hawley Tariff Act of 1930, which is the law that choked global trade in the 1930s and helped sink the world into the Great Depression,” wrote The Guardian’s Eduardo Porter on Sunday. “Section 338 is particularly dangerous because it offers cover for the president to slap trade levies on whatever country he wants under some fairly hazy arguments.”

Porter added, “Specifically, it grants the president authority to retaliate against countries that do anything to put the United States ‘at a disadvantage compared with the commerce of any foreign country.’” As soon as the president decides this is going on, he is authorized to “declare such new or additional rate or rates of duty as he shall determine will offset such burden or disadvantage”.

He continued, “Until Trump, section 338 was never invoked to impose tariffs. It was mostly used as leverage, to guarantee that other countries treated American products the same as imports from anywhere else. If some country offered preferential access to a neighbor or ally, the US could demand the same terms, or else.”

One of the chief rationalizations for Trump’s tariffs is that they will resolve a crisis in trade deficits between America and its economic rivals. Yet according to Porter, this concern misunderstands fundamental truths about modern economics.

Balance of payments crises don’t exist any more,” Porter explained. “Still, fresh from his supreme court loss, Trump imposed a 10% tariff on everybody by invoking section 122 of the 1974 act, which allows for tariffs to prevent such imbalances. The use of the law is so ridiculous that Trump’s own lawyers, in the IEEPA case, argued before the supreme court justices that section 122 could not be used as a substitute.”

According to a recent survey, 63 percent of Americans oppose Trump’s tariffs. Ed Gresser, the Vice President and Director for Trade and Global Markets at the liberal-leaning think tank Progressive Policy Institute, argued that his tariffs have backfired because the president is prioritizing short-term “wins” over the kind of stable long-term growth that leads to durable prosperity.

“They're hoping to get small, individual policy achievements at the expense of a larger-scale increase in costs and loss of stability and predictability,” Gresser told AlterNet last month.