Trump Turns to Older Trade Laws for New Canada and Brazil Tariffs After Supreme Court Defeat

President Donald Trump is rebuilding his tariff program around older trade laws that expressly authorize import duties, months after the U.S. Supreme Court struck down the sweeping tariffs he imposed under a federal emergency-powers statute.

The new strategy has produced 50% tariffs on certain Canadian goods under a rarely used provision of the Tariff Act of 1930 and 25% tariffs on many Brazilian imports under Section 301 of the Trade Act of 1974. The administration is also preparing possible Section 301 tariffs against dozens of other countries as a temporary worldwide import surcharge approaches its expiration date.

The approach addresses the central problem identified by the Supreme Court: Trump’s earlier tariffs relied on a law that did not mention tariffs at all. The replacement statutes contain express authority to impose duties, but each carries factual, procedural, and other legal limits that could generate new lawsuits.

In its February 20 decision in Learning Resources, Inc. v. Trump, the Supreme Court held that the International Emergency Economic Powers Act, known as IEEPA, did not authorize the president to impose tariffs. Trump had used the 1977 emergency law to place duties on imports from nearly every U.S. trading partner, including separate tariffs tied to drug trafficking and the national trade deficit.

The Court emphasized that the Constitution gives Congress the power to impose taxes and duties. The federal government also acknowledged that the president has no inherent authority to impose tariffs during peacetime. Because IEEPA contained no reference to tariffs or duties, the Court rejected the administration’s argument that the law’s authority to “regulate” imports included the power to tax them.

The decision did not eliminate the president’s ability to impose tariffs under other laws. Instead, the Court noted that Congress has delegated parts of its tariff power through statutes that use clear language and place limits on presidential action. Trump’s new legal strategy relies on those more specific delegations rather than a single emergency declaration.

The latest test involves Canada.

On July 20, Trump signed three proclamations under Section 338 of the Tariff Act of 1930. The proclamations impose additional 50% tariffs on selected Canadian products, including goods ranging from wine and hockey sticks to cement. Energy, potash, products already covered by national-security tariffs, and certain fish and critical minerals are excluded. The new duties are scheduled to take effect on August 19.

The administration says Canada has discriminated against U.S. exports of automobiles, alcoholic beverages and cheese. Among its findings, the White House cited Canadian restrictions on U.S. vehicles, provincial bans on the purchase and sale of American alcoholic beverages and cheese quotas that allegedly treat European imports more favorably than comparable U.S. products.

Section 338 permits the president to impose tariffs when a foreign country places U.S. commerce at a disadvantage compared with trade from another country. The law limits the added duty to 50% and says the rate must be set at a level the president determines will offset the identified burden. It also requires tariffs to take effect 30 days after a proclamation.

Those express terms give the Canada tariffs a textual basis that the IEEPA tariffs lacked. Section 338 specifically refers to additional duties, identifies the conduct that can trigger them, and sets a maximum rate.

Its weakness is the absence of modern legal precedent.

Section 338 tariffs had never been imposed before Trump invoked the law against Canada. The statute also directs the U.S. International Trade Commission to remain informed about foreign discrimination and to bring such practices to the president’s attention with recommendations. It does not clearly state whether a commission investigation or recommendation must come before presidential action.

A legal challenge could therefore test whether Canada’s policies meet the statute’s definition of unequal treatment, whether the selected products and 50% rate reasonably offset the claimed trade disadvantages, and whether the administration complied with any role Congress intended for the trade commission. A court could also consider whether later trade laws altered or displaced parts of the nearly century-old provision.

The administration has said the tariffs will apply even to products that qualify for preferential treatment under the United States-Mexico-Canada Agreement. That position could create a dispute between the two countries, but a claimed conflict with the trade agreement would not automatically invalidate the tariffs in an American court.

The federal law implementing the USMCA states that U.S. law controls when it conflicts with the agreement and that the agreement does not limit authority granted by another federal statute unless Congress expressly says otherwise. The law also prevents private parties from challenging federal action solely on the ground that it violates the USMCA. An importer seeking to block the Canada tariffs would therefore need to show that Trump exceeded Section 338 or violated another source of U.S. law, rather than relying only on the trade agreement.

The tariffs against Brazil rest on a more familiar statute and a more developed administrative record.

The Office of the U.S. Trade Representative has imposed additional 25% duties on Brazilian imports beginning July 22, with exemptions for goods including beef, coffee, energy products, aircraft, rare earth materials and products already covered by separate national-security tariffs. Furniture, ethanol, machinery, footwear, sugar and numerous other imports remain subject to the new duties.

The administration is using Section 301 of the Trade Act of 1974, which authorizes trade action against foreign practices found to be unreasonable, discriminatory or burdensome to U.S. commerce.

Unlike the use of Section 338 against Canada, the Brazil action followed a yearlong investigation. USTR examined Brazil’s digital trade and electronic-payment policies, preferential tariffs, anti-corruption enforcement, intellectual-property protections, ethanol restrictions and response to illegal deforestation. The agency sought public comments, held a hearing and consulted with Brazilian officials before finalizing the tariffs.

That process gives the Brazil tariffs a stronger procedural foundation than the emergency tariffs rejected by the Supreme Court. The government can point to a statute that expressly authorizes trade retaliation, formal agency findings and a record developed before the duties were imposed.

A future lawsuit could still challenge whether the findings are adequately supported, whether the tariffs bear a reasonable connection to the practices USTR identified or whether the agency complied with every requirement of Section 301. Brazil has rejected the U.S. allegations and said it plans to consider remedies under its domestic reciprocity law and through the World Trade Organization.

The administration is preparing to expand the Section 301 strategy beyond Brazil.

USTR opened investigations into 60 economies over what it describes as failures to prohibit or effectively block imports made with forced labor. The agency has proposed additional tariffs of 10% on countries with certain forced-labor import restrictions and 12.5% on countries without such measures. Canada and Brazil are among the economies included in the investigations.

U.S. Trade Representative Jamieson Greer said on July 21 that the administration expected to announce action under those investigations soon. The timing is significant because Trump’s temporary 10% worldwide tariff, imposed under Section 122 of the Trade Act after the Supreme Court ruling, is scheduled to expire on July 24. Section 122 permits a surcharge of up to 15% for no more than 150 days unless Congress approves an extension.

Trump also continues to rely on Section 232 of the Trade Expansion Act for sector-specific tariffs based on national-security findings. The Supreme Court distinguished that law from IEEPA because Section 232 expressly refers to duties and requires a Commerce Department investigation and report before the president adjusts imports.

The administration’s post-Supreme Court strategy is therefore narrower in legal form, even if it remains broad in economic reach. Instead of using one emergency statute to impose tariffs across the global economy, the White House is building its tariff system country by country and industry by industry under several separate laws.

That structure could help the new tariffs survive the precise objection that defeated the IEEPA program. It does not place them beyond judicial review. Each round of duties will stand or fall on the language, findings, and procedures required by the statute the administration selected.