On July 27, the United States Trade Representative, Jamieson Greer, said that the new tariffs imposed by President Donald Trump on 60 trading partners would probably not have a significant impact on the world’s leading economy.
Greer indicated that the new tariffs contemplated under Section 301 of the 1974 Trade Act would not affect the Federal Reserve’s monetary policy decisions this week.
According to him, the new tariffs affect only a narrower group of trading partners than the temporary 10% duty that had been applied globally and which has since expired. Moreover, most of the new tariffs are 10% or 12.5%, i.e., the rates that have been recently applied.
Greer argued that the new tariff measures would not have an economic impact different from the one the U.S. economy has had to adapt to in the past.
Previously, the Office of the United States Trade Representative had stated that the new tariffs were imposed because many trading partners had not fully enforced the regulation prohibiting forced labor. While their scope had been narrowed compared to the previous temporary tariffs, these measures still cover about 99.4% of total U.S. imports.
Greer also indicated that the USTR (Office of the United States Trade Representative, or the United States Trade Representative Office) is pursuing another Section 301 investigation, focused on industrial overcapacity among 16 key trading partners, including China, Mexico and the European Union.
According to him, the agency plans to conclude the investigation soon and announce its official recommendations. The results of this investigation could lead the United States to impose additional tariffs on the products of the affected partners.
The United States Trade Representative has also defended the use of Section 301 as the legal basis to impose tariffs on certain countries.
Consequently, the Supreme Court of the United States cited this provision when it ruled against the broad tariffs that the Trump administration had imposed under the National Emergencies Act.
