NATASHA SARIN
Effective tariff rates changed on Friday for the 45th time in the last 18 months an average of once every 12 days. Rates will ratchet up yet again next month if President Donald Trump’s recently announced 50% levy on select Canadian goods goes into effect.
That includes hockey sticks, a product that serves as both a symbol of Canada and possibly a visual of what will happen to prices as well. The tariffs do not apply to critical imports, such as oil or potash, but those too could become more expensive should Ottawa decide to retaliate.
The president is, in effect, resurrecting a misguided strategy that harms our economy and further undercuts longstanding trade partnerships. The average rate for all US trade partners is set to rise to nearly 13% by autumn below the April 2025 “Liberation Day” levels, but still damaging.
Tariffs, as everyone outside the administration seems to know, are taxes paid on imported goods. Retailers such as Walmart pay them and typically pass a portion of the cost along to consumers. At their current levels, these taxes will slow economic growth as prices rise, people buy less and cost the average American family around $1,100 annually.
One reasonable question to ask is why, in the months leading up to the midterm elections, with most Americans reporting affordability as their top concern and fuel prices at $4 a gallon, the administration remains fixated on policies that feed inflation.
When the court struck down the administration’s signature tariffs in February, its opinion was hardly ambiguous: The founders, it stated, “did not vest any part of the taxing power in the executive branch.” That is precisely why the Treasury Department has so far refunded more than $80 billion in tariffs in this fiscal year.
It is true that the president has other mechanisms to institute tariffs if countries dump goods priced below the cost of production, for instance, he can step in. But the six justices who concluded the executive had overreached were clear that those alternative approaches imposed “limits on the duration, amount and scope of the tariffs they authorise.”
First, the administration announced it would reinstate many of the disallowed tariffs by using Section 122 of the Trade Act of 1974, which authorises temporary tariffs to address “fundamental international payments problems.” The Court of International Trade struck them down in May, but the government appealed, keeping them active. In the interim, the 150-day clock on those temporary tariffs expired on Friday.
Some thought the administration would evade the 150-day limit by claiming to institute another set of Section 122 tariffs that were substantially similar. Instead, the US trade team, led by Trade Representative Jamieson Greer, came up with a new pretext for broad-based tariffs: combating forced labour.
In March, Greer announced an investigation into 59 countries and the EU for failing to take action on forced labour. A few months later, he found what he was looking for, after a fashion, in a report citing the need to block imports produced with forced labour. The report highlights a few specific areas of concern tobacco from Malawi, rice from Myanmar, and cotton from China. Those specific examples are now being used to justify 10% to 12.5% tariffs on nearly all the economies investigated, including Norway.
Trump’s tariff trickery is not quite an Andrew Jackson moment, with the executive openly flouting the law of the land. His patchwork approach to reconstructing these tariffs stays within the literal text of the Supreme Court ruling, even as it violates its spirit. The court declared that taxing power rests with Congress and that any delegation of tariff authority to the president is subject to strict limits.
This game of tariff Whack-a-Mole resembles regular negotiations with toddlers: Tell one he cannot hit his brother with a shovel, and he simply produces a stick instead.
There is little that can be done in the short run to curb these tariffs, which flout negotiated trade agreements and clear constitutional constraints. One can only hope Congress eventually pushes back against this unlawful usurpation of its authority. This week’s expiring tariffs were meant to be temporary; instead, they have effectively been extended indefinitely.