Trump considers two-step approach for new tariff regime - FT

Published 25/03/2025, 12:18
© Pavlo Gonchar / SOPA Images/Sipa via Reuters Connect

Investing.com -- President Donald Trump is contemplating a two-step strategy for his new tariff regime, which would utilize seldom-used powers to levy emergency duties while investigations into trading partners are finalized, according to a report from the Financial Times, citing individuals knowledgeable about the discussions. The President’s team is considering plans to establish a more solid legal basis for the tariff regime, while simultaneously enabling Trump to raise funds for proposed tax cuts.

The President’s team is considering the launch of Section 301 investigations into trading partners, while simultaneously using rarely invoked emergency powers to apply immediate tariffs.

The tools that could be used to impose immediate tariffs include the International Emergency Economic Powers Act or a lesser-known US trade law, Section 338 of the Tariff Act of 1930, which could potentially apply tariffs of up to 50% on the country’s trading partners. Legal experts and those familiar with the plans also suggest that Trump could immediately apply tariffs on vehicle imports on April 2, reviving a national security study into the global car industry from his first term.

An alternative option, now considered unlikely, is the use of Section 122 of the Trade Act of 1974, which allows Washington to temporarily impose tariffs capped at 15% for up to 150 days. However, the administration has yet to finalize its approach, and the purpose of the tariffs remains uncertain.

While Trump has expressed frustration at foreign countries’ unfair treatment of the US, his officials are more focused on using tariffs to generate revenue for planned tax cuts, rather than as a negotiation tool with foreign capitals, the report said. This has sparked a search for proven legal options that the President can use to impose steep tariffs on multiple trade partners as quickly as possible.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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