Report: The Trump administration will announce the launch of a trade investigation to pave the way for new tariffs

On Wednesday, the 11th, at the start of the U.S. stock market’s midday session, media reports citing informed sources said the Trump administration is preparing to announce a series of trade investigations on Wednesday, paving the way for new tariffs on imported goods after the Supreme Court rejected its tariff agenda.

According to reports, these trade investigations will be conducted under Section 301 of the U.S. Trade Act of 1974 and will be carried out by the Office of the U.S. Trade Representative. The investigations will cover issues such as digital services taxes and alleged currency manipulation. The reports indicate that these investigations will mark an important step in the Trump administration’s effort to rebuild the “tariff wall” around the president.

Following the reports, the major U.S. stock indices, the S&P 500 and Dow Jones Industrial Average, maintained their decline. Supported by gains in chip stocks, the Nasdaq initially turned higher during midday trading but managed to recover and close the week’s rebound with a late rally.

According to CCTV News, on February 20 local time, the U.S. Supreme Court ruled that the Trump administration’s large-scale tariffs implemented under the International Emergency Economic Powers Act (IEEPA) lacked clear legal authorization. The Supreme Court justices upheld the lower court’s decision by a 6-3 vote, ruling that Trump’s use of the IEEPA to impose tariffs exceeded his statutory authority as president.

CCTV pointed out that the Supreme Court made this ruling in lawsuits filed by companies and 12 U.S. states. These entities argued that Trump’s unilateral imposition of import taxes based on the IEEPA was unprecedented. The ruling only restricts the president from using the IEEPA to implement tariffs but does not entirely strip him of the power to levy tariffs. Trump had previously imposed tariffs on products like copper, steel, and aluminum under other trade laws.

On the same day, February 20, when the Supreme Court announced its decision, CCTV reported that Trump announced the imposition of a 10% import tariff on global goods for 150 days under Section 122 of the U.S. Trade Act of 1974, replacing the tariffs deemed unlawful by the court. On the following day, February 21, Trump posted on social media that he would increase the “global import tariffs” on goods entering the U.S. from 10% to 15%.

The White House announced on February 20 that the 10% tariffs would take effect on February 24 Eastern Time. To date, the Trump administration has not implemented the higher 15% tariff rate.

Additionally, CCTV reported that the U.S. Customs and Border Protection (CBP) stated on February 22 that it would cease collecting tariffs imposed under the IEEPA starting February 24 Eastern Time.

Wallstreet.cn previously noted that although Trump became the first U.S. president to impose tariffs under Section 122 of the Trade Act of 1974, the tariffs authorized by this law are limited in both rate and duration, making it difficult to support the long-term, large-scale tariff system Trump sought.

Section 122 allows the president to impose tariffs up to 15% when facing a “large and serious” international balance of payments deficit, for a maximum of 150 days. The main advantage of this tool is that it can be implemented without prior investigation. Last May, the U.S. International Trade Commission ruled that retaliatory tariffs were illegal, and pointed out that if the president intends to address trade deficits through tariffs, he should use Section 122 rather than the IEEPA.

However, this provision has a critical flaw. The 15% maximum rate and 150-day limit mean that tariffs under this law are only suitable as short-term measures. Extending the tariffs beyond this period requires approval from Congress, which Democrats have previously stated they would oppose.

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