Bold and Brash: Why Trump's Tariff Game Changes with IEEPA
New Commerce Secretary Ross affirms accelerated, aggressive tariff action by Trump's administration 2.0
Trump's former Commerce secretary, Wilbur Ross, recently spilled the beans to Fox News Digital, revealing why the current president is flexing his trade muscles more aggressively than ever before. The mantra? A new authority backed by the International Emergency Economic Powers Act (IEEPA), enabling faster and harder blows against unfriendly trade practices.
In a candid chat, Ross – who was aboard the Trump train from 2017 to 2021 – highlighted the stark contrast between the old and new approaches. Gone are the days of bureaucratic red tape and drawn-out procedures; now, without much delay, Trump can slap tariffs on goods with little notice, appealing to his faithful followers but raising eyebrows among some U.S. businesses and out-of-the-loop allies.
"The old methods, like Section 232 and Section 301, required painstaking processes filled with public hearings, written reports, and endless consultation. Not anymore," Ross elucidated. The IEEPA removes this red tape, allowing Trump to act swiftly and decisively. However, this speed comes at the cost of reduced interaction with affected parties.
*TARIFFS ON TAP: TRUMP CUTS THE QUEUE WITH IEEPA*
It's not just about speed. IEEPA offers a broader scope for imposing tariffs, allowing the president to target almost every country, unlike the more specific measures from Trump's first term. This switch gives Trump the power to impose global tariffs rapidly, perhaps lending credence to his declaration that America is "open for business, but not business as usual."
Ross urged Trump to focus on trade deals in the Indo-Pacific, specifically with countries like India, Japan, Vietnam, South Korea, and Mexico. "Secure agreements with these countries, and you've pretty much shut the door on China," Ross argued.
He predicted that these tariffs would encourage some manufacturing to shift back to the U.S., but with many manufacturing hubs migrating to cheaper nations like India instead. He pointed to Apple's recent announcement as evidence.
*BEATING CHINA AT ITS OWN GAME – CLOSING THE TARIFF LOOPHOLE*
"The IEEPA gives Trump the ability to close loopholes that China used to exploit," Ross emphasized. 'Zeroing in on China' once again, Ross suggested allied countries should impose parallel tariffs on Chinese imports, ensuring that products like automobiles or electronics don't enter the U.S. market via nations like Vietnam or Mexico with lower barriers.
Initially, the administration imposed a 10% tariff on all Chinese goods, citing concerns over fentanyl trafficking. This rate increased to 20% in March, with higher "reciprocal" tariffs imposed on approximately 60 countries from April 9. China faced a combined tariff rate of 54%, which escalated to 145% by April 11.
Over the following days, Trump put his sweeping tariff plan on a 90-day pause to allow trade deals to play out with countries willing to negotiate. Critics argued that this move, while potentially beneficial for trade agreements, could harm American businesses reliant on Chinese imports.
As we stand on the precipice of a new era in U.S. trade policy, the IEEPA offers Trump an intriguing and powerful new tool in the ongoing game of global commerce. The question remains whether this bold new strategy will ultimately yield success or sow discord among U.S. allies and partners.
- Wilbur Ross, Trump's former Commerce Secretary, highlighted the use of the International Emergency Economic Powers Act (IEEPA) as the reason for Trump's aggressive trade policies, which enable faster imposition of tariffs on goods with little notice.
- The IEEPA allows Trump to act swiftly and decisively, removed from the red tape of bureaucratic procedures that were previously required for imposing tariffs under Section 232 and Section 301.
- Ross urged Trump to focus on trade deals in the Indo-Pacific region, particularly with countries like India, Japan, Vietnam, South Korea, and Mexico, suggesting that such deals would restrict China's influence.
- The IEEPA also provides a broader scope for imposing tariffs, potentially allowing Trump to close loopholes that China used to exploit, and encouraging allied countries to impose parallel tariffs on Chinese imports.
- Critics argue that Trump's tariff strategy, though potentially beneficial for trade agreements, could harm American businesses reliant on Chinese imports, raising concerns about the potential impact of Trump's new policy-and-legislation approach on the economy, investment, and general news.
