Donald Trump has introduced a new tariff strategy. After facing a setback from the U.S. Supreme Court regarding tariffs based on the International Emergency Economic Powers Act (IEEPA), he has now imposed a 50% tariff on Canadian products using Section 338 of the Tariff Act of 1930. This provision, which had been largely dormant for decades, has been revived as a new trade weapon in Trump's arsenal.
Section 338 allows the president to impose additional tariffs if a foreign government discriminates against U.S. products or takes actions detrimental to U.S. commerce. This provision has rarely been used in modern trade policy, and many may not even be aware of its existence. However, this lack of familiarity may actually appeal to Trump, as it provides a new means to enhance negotiating power without being constrained by existing trade policies.
The differences become even clearer when compared to other provisions. The Trade Act Section 122, currently used as a basis for global tariffs, allows for a maximum tariff of only 15% for 150 days, making both the duration and the tariff rate limited. Additionally, the Trade Expansion Act Section 232, which is used for tariffs on specific items like steel and aluminum, is limited to cases where imports are deemed a threat to national security. In contrast, Section 301, which is more comprehensive, requires extensive procedures including investigations, public hearings, and stakeholder input. Section 338, however, does not demand such complex procedures while offering a broader scope for enforcement than Sections 122 and 232.
Of course, Section 338 is not free from legal controversy. There are few real-world applications, and it may still face judicial scrutiny. However, the key point is not the ultimate fate of this provision, but rather that Trump continues to explore new legal authorities to advance his tariff policies.
This case exemplifies the characteristics of Trump's trade policy. When one legal avenue is blocked, he seeks out another, even utilizing provisions that have rarely been employed. Therefore, it is highly likely that Trump will continue to actively leverage various legal provisions to pursue his tariff agenda.
This situation is not just a concern for the United States; it also directly impacts South Korea. With many industries, such as automobiles, semiconductors, steel, and batteries, heavily reliant on the U.S. market, changes in U.S. trade policy will directly affect the business environment for South Korean companies. Even if South Korea is not the direct target, new U.S. tariffs can disrupt global supply chains and increase uncertainty. As tariffs are used more frequently as a negotiating tool, the uncertainty for businesses will inevitably grow.
Thus, South Korea must go beyond merely assessing which products will be subject to tariffs and closely analyze which legal provisions the U.S. may invoke. A system for continuous monitoring of the structure of U.S. trade law, presidential authority, and potential judicial rulings must be established. The upcoming trade war is likely to be less about tariff rates and more about competition in laws and regulations. This dynamic is expected to persist even after the Trump administration ends, continuing to exert influence.
South Korea must now develop the ability to interpret changes in U.S. trade law as part of its national competitiveness. It is time to prepare for any 'new weapons' that the U.S. may deploy without being shaken by them.
* This article has been translated by AI.
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