Will 'Super 301' be brought out... "Strategy must consider variables in Korea-US negotiations" [Trump Tariffs Halted]

A US court has put a brake on one of Donald Trump's tariff attack weapons, the 'International Emergency Economic Powers Act (IEEPA)', drawing attention to Trump's response strategy. Local media predict that Trump has many other weapons besides IEEPA and will continue his current pressure and negotiation strategy.

■'Super 301' may be brought out again

The US Court of International Trade (CIT) panel ruled on the 28th (local time) that Trump abused IEEPA in imposing 'fentanyl tariffs' and 'mutual tariffs', declaring these tariffs invalid. This law grants broad powers to the US president to declare an economic emergency in response to an "extraordinary and special threat" and has been used since its enactment in 1977 to sanction countries like Iran and North Korea. Trump argued in February-March that Canada, Mexico, and China were neglecting the production and distribution of the opioid fentanyl, putting the US in an emergency, and imposed tariffs of 20-25% on these countries. Last month, he declared that the US was in an emergency due to a massive trade deficit and imposed mutual tariffs of 10-50% on 185 countries and regions worldwide.

The panel determined that while IEEPA allows Congress to delegate the power to regulate imports to the president, the authority to impose tariffs is constitutionally vested in Congress. The panel concluded that Trump does not have the authority to impose tariffs indefinitely by broadly interpreting IEEPA. Furthermore, given that the trade deficit has been a chronic situation for decades, it is difficult to perceive it as an emergency contrary to Trump's claims.

In fact, during his first administration, Trump primarily used Section 301 of the US Trade Act, known as 'Super 301'. This provision allows for retaliatory measures if a country trading with the US engages in unfair trade practices against the US. Additionally, Trump used Section 232 of the Trade Expansion Act this year to impose a 25% tariff on imported steel, aluminum, cars, and car parts. This law stipulates that the government can take measures in response to situations where specific imports threaten US national security. However, to invoke Trade Act Section 301 or Trade Expansion Act Section 232, one must wait until the US Trade Representative (USTR) and the Department of Commerce complete risk assessments. In contrast, regulations under IEEPA can be used immediately after an emergency declaration.

Experts predict that if Trump loses the IEEPA solution, he may bring out Trade Act Section 301 again, although it takes more time. Moreover, since the Republican Party already controls both houses of Congress, Trump may raise tariffs through the proper procedures. Besides tariffs, Trump may demand trade deficit resolution from negotiating countries through defense cost pressures or overseas US troop reductions.

■Korean response remains calm, should observe

Domestically, there is a cautious response to the recent US federal court ruling. A Korea International Trade Association official predicted, "The Trump administration is clearly committed to tariff measures, fearing the adverse impact on external negotiations during the lawsuit process and immediately appealing after the ruling, so ongoing technical consultations between Korea and the US and negotiations with other countries will continue for the time being." He added, "Since the negotiations with the US involve exchanging opinions on technical content by major issues, it seems necessary to proceed with them while considering future US variables to establish an overall strategy and reflect them if necessary." The official also assessed, "Since there is a considerable possibility that the first-instance ruling will be overturned in the appeal and final federal court, an overreaction that this ruling will be a major turning point is inappropriate."

The government also stated that it would respond calmly rather than immediately changing its negotiation strategy. This is because the Trump administration has immediately filed an appeal and determined that a long-term response is necessary. A Ministry of Trade, Industry and Energy trade official said, "Since the Trump administration has said it will explore all means and appeal, we are monitoring through local missions," and "there is no immediate change in negotiation strategy."

pjw@fnnews.com Park Jong-won, Lee Yu-beom, Choi Jong-geun reporters