The Trump administration is preparing for a new round of tariffs on its trading partners, including South Africa.
After the US Supreme Court struck down the tariffs President Trump had imposed under emergency legislation – including 30% on South African goods entering the US – his administration cited a number of laws that could be used to resurrect its global tariff regime.
Top of the list was section 122 of the US Trade Act, used immediately to impose 10% tariffs on all countries. President Trump has threatened to raise that rate to 15% the maximum allowed under that section.
Section 122 is a rarely used law that allows temporary tariffs to deal with trade imbalances. However, section 122 tariffs can only be in force for 150 days after which the US Congress must vote to extend them.
Now the Trump administration is exploring the use of section 301 of the Trade Act, which authorises retaliatory tariffs when investigations reveal unfair trade practices by countries.
The US government has announced Section 301 investigations of 16 countries or regions that were possibly exporting their excess capacity and production to the US – China, the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan, and India.
Then it announced section 301 investigations against 60 countries, including South Africa, for failing to “impose and effectively enforce measures banning goods produced with forced labour from entering their markets”.
And if these don’t work, the Trump administration has said there are other measures that it can use to restore the tariff revenue earned under the International Emergency Economic Powers Act – tariffs that were invalidated and the US government now has to refund.
