US President Donald Trump on Tuesday persisted with his tariff agenda after the Supreme Court struck down his signature economic policy.
During his State of the Union address,Mr Trump said tariffs were a key driver for stock market gains,with US equities reaching record highs in the past year.
“I used these tariffs to make great deals for our country,both economically and on a national security basis,”he said in his remarks in the House chamber at the US Capitol.
“Everything was working well.Countries that were ripping us off for decades are now paying us hundreds of billions of dollars a year–and yet,these countries were happy,and so were we.”
Mr Trump also claimed that“many of the wars I settled”were ended because of“the threat of tariffs”.
The Supreme Court's ruling injects new uncertainty into his trade agenda,in which he has used tariffs to reach agreements with global partners.
The EU on Monday paused work on ratifying its US trade deal after Mr Trump threatened to impose a new 15 per cent global tariff,while the Supreme Court's ruling delayed negotiations with India.
Mr Trump claimed that“almost all countries and corporations”want to keep their deals in place.The tariffs“will remain in place under fully approved and tested alternative legal statutes,leading to a solution that will be even stronger than before”,he added.
All-of-the-above approach
After the Supreme Court rejected his universal tariffs,Mr Trump endorsed an all-of-the-above strategy as his administration seeks alternative mechanisms to impose duties.
“They're a little more complex,but they're actually probably better,leading to a solution that will be even stronger than before,”Mr Trump said.
Among the tools at the President's disposal is Section 122 of the 1974 Trade Act,which allows him to place tariffs up to 15 per cent on countries to address a balance of payments issue affecting the US economy for 150 days.Mr Trump invoked the measure earlier on Tuesday to enact a new global 10 per cent tariff.
It is unclear when his promised 15 per cent tariff will go into effect.
The move could be seen as a potential stopgap for a more permanent solution such as Section 301 tariffs,which the US has used to place charges on imports from Brazil.
“This is something where it is indeed that,well,let's use the other trade tools that are in our toolbox,many of which,including 301,have been newly endorsed by the Supreme Court in its ruling,”said Nate Bolin,a partner at the K&L Gates law firm in Washington.
Uncertain outlook
While the Supreme Court's decision struck down Mr Trump's signature policy,it did little to ease uncertainty for businesses.
In addition to a refund process that could take years to litigate,businesses will also continue to navigate a suite of tariffs the Supreme Court's decision did not affect.These include Section 232 tariffs on imports such as aluminium and steel,as well as Section 301.
The court's ruling also has no impact on the“de minimis”exemption,which primarily impacts e-commerce marketplaces and merchants.
And with Mr Trump's threats in recent days to explore all his tariff options,Mr Bolin said companies'hopes of returning to a pre-Liberation Day era are firmly in the rear-view mirror.
“At least for this administration,those days are gone and we…should expect to live an environment where the US has this tariff system in place for at least the next three years,”Mr Bolin said.
Mr Trump also touted a boom in foreign direct investment and oil production over the last year.He boasted about a decline in inflation,although government data has shown that inflation last year stalled or even ticked higher.
The head of the Congressional Budget Office said it would re-evaluate what it projects US tariff revenue to be–roughly$3 trillion over the next 10 years–after the court's ruling.
“It's just too soon for us to say,but we will provide that information as soon as we can about the kind of comparison between what was in the baseline and what they've restored,”CBO director Phillip Swagel said on Monday.
