Author of America’s tariff statute: Trump’s tariffs are illegal

By David Goldman, CNN

(CNN) — Ambassador Alan Wolff says President Donald Trump’s novel implementation of America’s tariff law is illegal and runs counter to how Congress intended the presidential power to be used.

Wolff would know. He wrote the law.

“I have a sense of ownership of the statute,” said Wolff, who served as the Nixon administration’s lead international trade lawyer and drafted what eventually became Section 301 of the 1974 Trade Act. “I have a long history with it. And it’s being misused.”

That argument is about to be tested.

On September 30, the Court of International Trade will hear a case that challenges Trump’s latest tariff strategy. The plaintiff: The Liberty Justice Center, which sued the Trump administration and won, when the Supreme Court ruled in February that the president had no authority to use his emergency powers to enact tariffs.

Among the Liberty Justice Center’s arguments: Trump is claiming authority not provided to him by the statute Wolff drafted.

Drafting Section 301

While Wolff served in the Nixon administration, the White House grew frustrated with its inability to respond to exploding competition from Japan, particularly in electronics, while American manufacturers struggled to export goods back to Japan. The relevant authority to retaliate, Section 252 of the Trade Expansion Act of 1962, was limited to agricultural products.

In need of a bill that would give the president broader authority to respond to specific trade barriers, the Nixon administration and Congress created Section 30, which gave the White House power to investigate a country for anticompetitive actions and respond in kind to force the offending trading partner to the negotiating table. It eventually allowed the United States to place 100% tariffs on Japanese electronics, an action that led the two countries to reach a significant trade agreement.

That context for the drafting of Section 301 is key, Wolff argues. That tariff authority Congress transferred to the president was designed to be limited to a singular trade action and an individual country. That’s why the statue includes the term “foreign country,” singular, and not “countries,” plural, as in other statutes that deal with multilateral agreements.

“The notion that you can write your own tariff against anyone and anybody is offensive,” Wolff said. “This isn’t what we intended.”

How Trump is using Section 301

Nevertheless, Trump is using Section 301 to do exactly that: He’s levying tariffs on just about every US trading partner.

To resuscitate its collapsed tariff regime, the Trump administration has claimed that Section 301, with its lack of time limits or upper bounds for tariffs, affords the president carte blanche to place tariffs on any country the White House determines has disadvantaged America in trade.

In June, US Trade Representative Jamieson Greer published a 98-page report detailing the result of a monthslong investigation into trading partners’ policies on buying goods made with forced labor. After a public comment period, the USTR in July issued a ruling that dozens of countries directly or indirectly supported forced labor. As a punishment for those actions, which the USTR said harms US commerce, Trump placed tariffs of 10% to 12.5% on more than 60 countries.

“The USTR sort of bundled together 60 countries, created a unique standard that no country could or did meet and said that we’re retaliating against something and acting unilaterally against something we’ve had no interest in historically,” Wolff said. “Congress doesn’t just give wholesale authority to the executive branch – and it didn’t in this case.”

The challenge

The Liberty Justice Center that believes in some ways, its argument in the upcoming hearing is even more straightforward than the one last year that ultimately overturned the bulk of Trump’s previous tariffs.

The administration has repeatedly stated that its intention with its recent Section 301 investigation and implementation was to restore the universal tariffs that it lost. And its actions backed up its statements: Immediately after the Supreme Court case, Trump put in place a universal 10% tariff using Section 122 of the 1974 Trade Act. Five months later, right after the Section 122 tariffs expired, the Trump administration implemented its Section 301 tariffs.

“It’s clearly showing a pretextual basis for the tariffs,” said Sara Albrecht, CEO of the Liberty Justice Center. “It’s like: ‘duh.’ I don’t know how many statements we’ve collected from the administration, but every time they speak about this, we put it in a brief.”

Three former top government trade lawyers – including Wolff; former US Trade Representative to President George H.W. Bush, Carla Hills; and former President Ronald Reagan’s USTR general counsel, Warren Maruyama – wrote a “friend of the court” brief in support of the Liberty Justice Center this month.

They say the Trump administration’s allegations of forced labor as a basis for the tariffs is spurious, the required investigations were inadequate – if carried out at all – and the tariffs weren’t designed to get the supposedly offending countries to prove they’ve discontinued their practices to seek relief from the tariffs.

“The resulting tariffs should be set aside as contrary to law and arbitrary and capricious,” they wrote in their brief.

If the president really wanted to effect change on forced labor, Wolff noted that Trump has another authority: ban trade with offending partners. That would get their attention.

That’s why Section 301 was written without an upper bound to a tariff rate, he said.

“You don’t need to have an upper limit if you can also have a ban,” Wolff said. “It never occurred to us. It was designed to force agreements. And it worked.”

Whac-A-Mole

Trump isn’t done.

He’s used the same Section 301 authority to increase Brazilian tariffs to 37.5%, citing a history of human rights abuses. And he has launched a trade war with Canada, increasing tariffs on select items to 50% using a different, never-before-used tariff authority: Section 338 of the Tariff Act of 1930. And Greer’s office is also investigating more than a dozen countries for excess manufacturing capacity.

Wolff said he’s concerned that if Liberty Justice Center is victorious again, the Trump administration will find another tariff authority to replace Section 301.

“That certainly worries me,” Wolff said. “But the only thing you can do in response? You fight back.”

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