US customs say will halt collection of IEEPA tariffs on 24 February

The big news since Friday and over the weekend is of course Trump’s tariffs mess. The Supreme Court ruled against the US president in a landmark 6-3 decision, stating that Trump exceeded his constitutional authority by unilaterally imposing broad global tariffs under the guise of national emergency powers. The tariffs announced in April last year were based on the International Emergency Economic Powers Act (IEEPA).Now that the action is deemed unconstitutional, the collection of these tariffs must halt. And the US customs and border protection has come out to say that they will stop collecting the duties starting from 1201 ET (0501 GMT) on 24 February. That means just a little under 24 hours from now.As a reminder, the Supreme Court ruling only decides that Trump’s reciprocal tariffs are deemed unconstitutional/illegal. It does not dictate the necessity or the manner in which any refunds should take place. And this where there is plenty of confusion and chaos happening, with there likely to be many legal hurdles to work through.I’m not just speaking about companies filing claims to get back their money after having paid these tariffs in the past. But what about the complication of these companies also already passing on the added tariffs cost to consumers/retailers? This isn’t going to be straightforward and could take years to resolve in court.So with the IEEPA now put down, Trump is digging out Section 122 of the Trade Act of 1974 to impose a blanket 15% tariff for the next 150 days. After which, he will need Congress’ approval to extend them – which is unlikely to work out.Given that, Trump is already touting a loophole of trying to reissue the Section 122 tariffs every 150 days. However, this will only bring us back to the “Major Questions Doctrine” ruling by the Supreme Court again. So, Trump trying to conveniently abuse the loophole would challenge the intent of the law and will surely be struck down once again.But at least for now, it buys Trump some time to work out other potential avenues. And the next likely step is to pursue tariffs under the pretext of unfair trade practices. That is listed under Section 301 and requires the US trade body to prove that other countries are acting “unreasonably” or “discriminatorily” towards the US in their trade practices.The issue here is that there might be a bit of a gap as Section 301 investigations usually take 6 to 12 months to complete because they require public hearings and evidence-gathering. So if they aren’t completed by around July or August, there will be a gap in which Trump may not be able to place tariffs as he pleases. So, there’s that.
This article was written by Justin Low at investinglive.com.

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