Supreme Court Rejects Challenge to Trump’s First-Term Tariff on China

The U.S. Supreme Court on June 15 declined to hear a legal challenge to tariffs imposed on Chinese imports by U.S. President Donald Trump during his first term in 2018.

The decision follows an appeal by HMTX Industries and other businesses after the U.S. Court of Appeals for the Federal Circuit last year upheld the tariffs, which Trump previously imposed on Chinese goods under Section 301 of the Trade Act of 1974 in response to China’s unfair trade practices related to technology transfer, intellectual property, and innovation.

The plaintiffs petitioned the Supreme Court to review the ruling, but the high court denied the request on June 15, keeping the tariffs in place. The justices did not provide any explanation for the decision.

According to a Feb. 20 petition filed by the importers, the first Trump administration imposed an initial round of tariffs on $50 billion worth of Chinese imports under Section 301 of the Trade Act.

The administration later expanded the tariffs in response to China’s retaliatory tariff measures by invoking Section 307 of the Trade Act, which allows the president to modify existing tariffs to address unfair trade practices.

“But Congress nowhere gave USTR [Office of the United States Trade Representative] the vast power to engage in an open-ended trade war under that modest modification provision. Yet that is precisely what happened here,” the importers said.

“That USTR’s ‘modification’ continues to impose billions of dollars in taxes on the American public each month is enough to warrant this court’s review.”

In a May filing, the administration argued that the case did not merit Supreme Court review and said the law allows the USTR to modify tariffs as long as the changes “are not radically transformative.”

“Accordingly, modifications imposed under Section 307(a) necessarily comport with the Act’s scheme because they are limited to actions appropriate to address the same problem that the original Section 301 actions addressed, as that problem has evolved over time,” it stated.

After taking office for a second term last year, Trump invoked the International Emergency Economic Powers Act (IEEPA) to impose tariffs on trading partners, citing the need to regulate international transactions to respond to an “unusual and extraordinary threat” to national security. The Supreme Court struck down the tariffs in February, ruling that the IEEPA does not clearly authorize the president to impose tariffs.

The Trump administration has been looking at alternative legal avenues following the Supreme Court ruling.

USTR Jamieson Greer said on Feb. 20 that his office would launch new Section 301 investigations covering most major trading partners.

The new trade investigations will cover various areas, including industrial excess capacity, forced labor, pharmaceutical pricing practices, discrimination against U.S. technology companies and digital goods and services, digital services taxes, and ocean pollution.