Lawfare Podcast Summary: "Lawfare Daily: Trump’s Tariffs and the Law"

Release Date: February 27, 2025
Host: The Lawfare Institute
Guests:

• Scott R. Andersen – Senior Editor
• Kathleen Clausen – Professor of Law, Georgetown University Law Center
• Ryan Reynolds – Contributing Editor, Lawfare
• Peter Harrell – Non-Resident Fellow, Carnegie Endowment for International Peace

1. Introduction

In the episode titled "Lawfare Daily: Trump’s Tariffs and the Law," the Lawfare Institute delves into the recent surge of tariff actions initiated by President Trump in his second term. The discussion centers around the legal frameworks underpinning these tariffs, their implications for international trade, and the potential pushback from both foreign governments and domestic stakeholders.

2. Overview of Trump's Tariffs

Scott R. Andersen initiates the conversation by outlining the swift escalation of tariff measures undertaken by the Trump administration within the first month of his second term:

• January 26: Tariff threats against Colombia over migrant flights, leading to concessions.
• February 1: Implementation of IPA-based tariffs on Canada, China, and Mexico, with Canada and Mexico opting for a 30-day delay for negotiations.
• February 10: Expansion of tariffs on steel and aluminum imports, effective March 12.
• February 13: A request for recommendations on reciprocal tariffs in response to unfair trade and taxation practices, due April 1.
• February 14: Announcement of tariffs up to 25% on automobiles, semiconductors, and pharmaceuticals, set to commence April 2.
• Recent Developments: Discussions on tariffs related to Chinese ships and potential terrorist authorities.

Andersen notes, “[...] these are largely Cold War–geared delegations… now coming back with a vengeance” (03:06).

3. Legal Framework and Tariff Authorities

Kathleen Clausen and Peter Harrell provide an in-depth analysis of the legal mechanisms enabling the President to impose tariffs:

• Statutory Tariffs: Derived from delegations of authority in acts like the Trade Expansion Act of 1962 (Section 232) and the Trade Act of 1970 (Section 301). These delegates empower the President to respond to national security threats or unfair trade practices.

• International Emergency Economic Powers Act (IEEPA): A 1977 statute intended for emergency declarations, traditionally used for sanctions rather than tariffs.

Key Insight: The Trump administration's reliance on IEEPA for imposing tariffs marks a significant departure from conventional tariff authorities, potentially expanding executive power in trade matters.

4. Use of IEEPA vs. Statutory Authorities

Ryan Reynolds emphasizes the unprecedented use of IEEPA for tariff imposition:

“IEEPA … does not grant the president tariff authority. It actually would let him prohibit imports and prohibit exports… Congress, certainly, didn’t intend it as a grant of tariff authority” (15:46).

Scott R. Andersen adds that while statutory authorities like Sections 232 and 301 involve detailed investigations and procedural requirements, IEEPA offers broader, more flexible powers with fewer procedural hurdles, appealing to the administration’s desire for swift action.

5. Implications for Trade and International Relations

The rapid implementation of tariffs has significant repercussions:

• Acceleration of Tariff Implementation: Unlike the first term, where tariffs were phased in over two years, the second term sees immediate imposition and higher rates.

• Strategic Use of Tariffs: Tariffs are being employed not just as economic tools but as leverage in political negotiations, exemplified by targeting Canada and Mexico over issues like fentanyl and migration.

Reynolds remarks on the administration’s strategic use:

“Either the tariff provides him leverage and the foreign counterparty caves… or he gets tariff revenue” (03:39).

6. Pushback from Foreign Governments and Corporations

Kathleen Clausen and Scott R. Andersen discuss the international and domestic backlash resulting from the tariffs:

• International Retaliation:

  • China: Already initiated a request for consultations under WTO rules (36:29).
  • Canada and Mexico: Threatened to bring proceedings under USMCA.
  • European Union: Expected retaliation on steel and aluminum tariffs, potentially targeting politically sensitive sectors and firms close to Trump.

• Corporate Response:

  • Importers and Big Corporations: Many are adopting a wait-and-see approach due to uncertainty, potentially delaying significant operational changes.
  • Supply Chain Adjustments: Companies are grappling with decisions on reshoring production versus bearing the costs of tariffs.

Reynolds observes:

“If you are a rational, self-interested company… your incentive is probably just to pay the tariff and hope this goes away” (37:53).

7. Judicial Risks and Legislative Responses

The legal challenges posed by the administration’s use of IEEPA for tariffs are multifaceted:

• Judicial Risks:

  • Historical Precedence: Cases challenging IEEPA have generally resulted in victories for the government, minimizing immediate judicial threats.
  • Potential Litigation: As tariffs come into effect, more challenges are expected, particularly from affected importers and industries.

• Legislative Pushback:

  • Congressional Inaction: So far, Congress has remained largely passive, though there is growing concern among certain lawmakers about the breadth of executive power.
  • Need for Legislative Intervention: To curtail or regulate the administration’s tariff powers, Congress would need to pass legislation, likely facing a presidential veto.

Andersen notes the difficulty in reversing tariff measures without significant legislative effort:

“Passage of legislation to take these powers away would require overriding a presidential veto” (29:28).

8. Future Flashpoints and Conclusion

As the Trump administration continues to navigate its second term, several key developments are anticipated:

• Implementation Deadlines: Numerous investigations and tariff implementations are scheduled for March and April, potentially leading to a surge in tariff actions.

• Coherent Policy Strategy: Observers are keen to determine whether the administration will articulate a unified strategy for tariffs or continue with disparate, opportunistic actions.

• International and Domestic Response Evolution: The ongoing retaliation from foreign governments and reactions from domestic corporations will likely shape the future trajectory of U.S. trade policy.

Reynolds suggests a critical area to watch:

“Do we see these actions emerge into a coherent theory? Or is this going to be a bunch of country-by-country actions?” (48:07).

Kathleen Clausen emphasizes the need for vigilance:

“We will have to all keep our eyes peeled on what developments are coming down the road” (49:30).

In conclusion, the episode underscores the complex interplay between executive authority, legal frameworks, and international relations in the realm of U.S. trade policy under President Trump. The continued evolution of tariff strategies and their broader implications remain pivotal areas of focus for policymakers, legal experts, and global trade stakeholders.

Notable Quotes

• Ryan Reynolds [03:39]:
  “Either the tariff provides him leverage and the foreign counterparty caves and gives them what he wants and that's obviously a win, or if it doesn't get the foreign counterparty to cave, he gets tariff revenue.”

• Ryan Reynolds [15:46]:
  “IEEPA … does not grant the president tariff authority. It actually would let him prohibit imports and prohibit exports… Congress, certainly, didn’t intend it as a grant of tariff authority.”

• Ryan Reynolds [21:32]:
  “Tariffs are kind of win-win in the following sense, like either the tariff provides him leverage and the foreign counterparty caves and gives them what he wants and that's obviously a win. Or if it doesn't get the foreign counterparty to cave, he gets tariff revenue.”

• Scott R. Andersen [29:28]:
  “Because the economic stakes are just going to be such that the pressure to do so is going to be quite high.”

Resources and Further Listening

For listeners interested in exploring more on this topic, the Lawfare Institute offers additional resources and related podcast episodes. To stay updated, visit www.lawfareblog.com.

This summary is based on the transcript provided and reflects the discussions and insights shared by the Lawfare Podcast guests on February 27, 2025.