by Craig Brightup, The Brightup Group —
On Feb. 2, the famous groundhog Punxsutawney Phil emerged from his burrow on Gobbler’s Knob and saw his shadow, predicting six more weeks of winter. Perhaps businesses impacted by the International Emergency Economic Powers Act tariffs (the “reciprocal” and “fentanyl” IEEPA tariffs) might have to wait that long for the Supreme Court (SCOTUS) to issue its decision on the IEEPA tariffs, but most SCOTUS watchers think a decision could come sooner.
That it’s taken this long for SCOTUS to rule despite fast-tracking the case may reflect its legal complexities involving non-delegation of authority from Congress and whether tariffs are taxes, as well as Executive Branch authority over tariffs to achieve foreign policy and national security goals. And should SCOTUS rule against the IEEPA tariffs, the next issue will be whether all or just some of those who paid the tariffs are eligible for refunds and how that process plays out.
In the meantime, on Jan. 12, President Trump threatened 25% tariffs on countries “doing business” with Iran but there’s been nothing about implementation from the White House, Commerce Dept., or U.S. Trade Representative. Also, on Jan. 16, the President announced more tariffs on eight European countries opposing U.S. control of Greenland: Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland. They were threatened with a new 10% tariff starting Feb. 1 increasing to 25% on June 1, but again no follow-through from the Administration. Regardless, all of these threatened tariffs look to be based on IEEPA and could be short-circuited by SCOTUS.
On Jan. 26, President Trump threatened to hike tariffs on South Korea from 15% to 25% because South Korea’s legislature has yet to approve a bilateral trade agreement that was reached last year. It appears this threat is being used to prompt action from South Korea’s National Assembly because of no details from the White House on when the higher tariffs would take effect.
One tariff threat that did come with a White House document concerns Cuba. Specifically, on Jan. 29, the President’s Executive Order “Addressing Threats to the United States by the Government of Cuba” was posted by the White House to impose tariffs on goods from countries that sell or otherwise provide oil to Cuba. But there’s a process before such tariffs could be imposed which is: “The Secretary of Commerce, in consultation with the Secretary of State…shall determine whether, after the effective date of this order [Jan. 29], a foreign country directly or indirectly sells or otherwise provides any oil to Cuba.” If there’s an affirmative finding, then it must be routed through Treasury, the Dept. of Homeland Security and the USTR to determine “whether and to what extent an additional ad valorum rate of duty shall be imposed” on products from the country in question.
Finally, positive news regarding tariffs came on Feb. 2 when President Trump announced that he and Prime Minister Modi of India had reached an agreement on trade, and that India will not purchase oil from Russia. According to a Trump post on Truth Social, “Out of friendship and respect for Prime Minister Modi and, as per his request, effective immediately, we agreed to a Trade Deal between the United States and India, whereby the United States will charge a reduced Reciprocal Tariff, lowering it from 25% to 18%.”
The U.S.-India trade deal hasn’t been announced via Executive Order or from Commerce or the USTR, but its implementation is expected. Also, other facets of the deal are India buying more American oil, coal, and other energy-related and agricultural products.
