Trade Wars: How Tariffs Became the Trump Card

Two pieces of legislation provide the contours of modern-day U.S. trade policy: Section 232 of the Trade Expansion Act (1962) and Section 301 of the Trade Act (1974). These laws provide the President with broad powers to impose tariffs and trade sanctions, often in response to perceived threats to national security or unfair trade practices.[1] Since 2018, tariffs have become a central tool in U.S. trade strategy, particularly in relation to China.[2] As we approach the 2025 presidential inauguration, questions remain about the future of U.S. tariffs and their impact on both domestic industries and international relations.

Section 232 grants the president authority to impose tariffs or other trade restrictions if imports threaten U.S. national security.[3] This provision was used by the first Trump administration to impose significant tariffs on steel (25%) and aluminum (10%) imports.[4] The administration argued that the U.S. steel and aluminum industries were vital to national security, and the tariffs would protect American producers from foreign competition.[5]

Despite legal challenges, Section 232 tariffs have been upheld. USP Holdings, Inc. v. United States affirmed the Court of International Trade’s decision upholding the Trump administration’s tariffs on steel imports.[6] Similarly, American Institute for International Steel (AIIS) v. United States, affirmed the Court of International Trade’s decision that Section 232 does not violate the Constitution's Separation of Powers.[7]

Section 301 of the Trade Act of 1974 allows the U.S. to impose trade sanctions on countries that engage in unfair trade practices or violate U.S. trade agreements.[8] Before the World Trade Organization (WTO) was established in 1995, Section 301 was a primary tool used by the U.S. to address trade imbalances and open foreign markets to American goods.[9] However, since the creation of the WTO, the U.S. has largely used Section 301 to build cases for dispute resolution within the WTO framework.[10] This changed in 2018, when the Trump administration shifted to using Section 301 for unilateral action, particularly targeting China, resulting in a trade war that escalated tariffs on a wide range of Chinese goods.[11]

The 2018 trade war, initiated by the Trump administration, was centered on addressing China's "unfair" trade practices.[12] The U.S. accused China of intellectual property theft, forced technology transfers, and other practices that undermined American companies.[13] In response, China imposed retaliatory tariffs on U.S. goods, creating a cycle of escalating trade barriers.[14]

While the Biden administration has not reversed these policies, it has taken a more measured approach.[15] Although tariffs on Chinese goods ceased increasing in January 2020, they remain in place, with the Biden administration citing concerns over Chinese overcapacity in industries like steel and aluminum.[16] In May 2024, President Biden imposed additional tariffs on Chinese steel, aluminum, and other products, reinforcing the U.S. stance that China must eliminate its unfair trade practices.[17]

With Donald Trump’s victory in the 2024 election, the future of U.S. trade policy is set to continue with plans for a sweeping 60% tariff on all imports from China and 10-20% tariffs on goods from other countries.[18] This hardline approach is aimed at reshaping the global trade order by deterring manufacturers from shifting production abroad, pushing for the repatriation of American jobs, and ensuring that the U.S. retains its competitive edge in strategic industries.[19] Additionally, Trump’s policies are expected to further decouple the U.S. economy from China’s, aiming for a new trade equilibrium that prioritizes American interests.[20] As part of this strategy, tariffs will also serve to maintain the primacy of the U.S. dollar in global trade and provide a powerful lever in diplomatic negotiations, especially with China, Europe, and other key trade partners.[21] Trump’s second presidency will likely see a continuation of his “America First” trade policy, with tariffs at the center of U.S. strategy.

Charlotte McLaughry is a staff member of Fordham International Law Journal Volume XLVIII.

[1] Warren Maruyama et al., Making Tariffs Great Again: Does President Trump Have Legal Authority to Implement New Tariffs on U.S. Trading Partners and China?, Ctr. For Strategic & Int’l Stud. (Oct. 10, 2024), https://www.csis.org/analysis/making-tariffs-great-again-does-president-trump-have-legal-authority-implement-new-tariffs.

[2] Elijah Asdourian & David Wessel, What Are Tariffs and Why Are They Rising?, Brookings (Jul. 1, 2024), https://www.brookings.edu/articles/what-are-tariffs-and-why-are-they-rising/.

[3] Maruyama, supra note 1.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Andres B. Schwarzenberg, Cong. Rsch. Serv., IF11346, Section 301 of the Trade Act of 1974 (2024).

[9] Id.

[10]Id.

[11] Elijah Asdourian & David Wessel, What Are Tariffs and Why Are They Rising?, Brookings (Jul. 1, 2024), https://www.brookings.edu/articles/what-are-tariffs-and-why-are-they-rising/.

[12] Id.

[13] Id.