As the Suspension of Reciprocal Tariffs Nears Expiration, How Should the World Respond to Trump's Next Move?


President Trump's suspension of reciprocal tariffs is set to expire on July 9. This impending deadline is a matter of concern not only for Taiwan but for the entire globe. Although the White House has hinted that an extension is possible, the final decision ultimately rests with the President. Furthermore, in this rapidly changing landscape, if Taiwan does not strategize in advance, it risks being forced into a passive position amidst the global trade confrontation.

On April 2, 2025, U.S. President Trump announced "Liberation Day," invoking the International Emergency Economic Powers Act (IEEPA) to implement so-called "reciprocal tariffs" globally. The policy immediately triggered global trade tensions and market panic; however, just one week later, a 90-day suspension (ending July 9) was announced, intended to pressure nations into trade negotiations with the U.S. Nevertheless, on June 26, the White House emphasized that while the suspension might be extended, if countries fail to meet U.S. demands, President Trump will unilaterally determine tariff rates favorable to the United States.

Legal Challenges and Constitutional Controversies Surrounding "Liberation Day" Tariffs

The Trump administration's implementation of global tariffs under IEEPA quickly faced domestic constitutional and legal challenges. The U.S. Constitution explicitly grants Congress the power to levy tariffs; the President may only execute this authority with explicit congressional authorisation, subject to judicial review. On May 28, 2025, a three-judge panel of the U.S. Court of International Trade unanimously ruled the administration's global tariff measures unconstitutional.

The reasoning included that IEEPA applies to genuine national emergencies—such as war or terrorist attacks—rather than long-standing trade imbalances, and that the Act authorizes asset freezes, trade restrictions, and export controls, but does not explicitly include the levying of tariffs.

This ruling struck directly at the legal foundation of the Trump administration's trade policy, compelling the White House to file an immediate appeal and stay the enforcement of the judgment. This case is likely to eventually reach the Supreme Court, becoming a pivotal test of the boundaries of presidential executive power.

The Trump Administration's Tariff Toolkit

Even facing judicial challenges, the Trump administration retains other legal avenues to enforce tariff policies before a final Supreme Court ruling. These tools generally fall into two categories:

Category One: Directly Executable via Presidential Executive Order

Section 338 of the Tariff Act of 1930: Allows the President to sign an executive order imposing punitive tariffs of up to 50% on specific goods (historically unprecedented).

Section 122 of the Trade Act of 1974: In cases of severe balance-of-payments disequilibrium or significant dollar depreciation, the President may unilaterally issue an executive order for a temporary surcharge of up to 15% for a duration of 150 days. A precedent exists from 1971, when President Nixon imposed a 10% import surcharge following the collapse of the Bretton Woods system.

International Emergency Economic Powers Act (IEEPA): Although currently stayed by the courts, its future validity remains pending confirmation by the Supreme Court.

Category Two: Requiring Administrative Investigation Before Presidential Approval

Section 232 of the Trade Expansion Act of 1962: Following a Department of Commerce investigation, the President may levy tariffs on national security grounds. For instance, the Trump administration applied this to steel and aluminum in 2018, with rates rising to 50% by June 2025.
Section 201 of the Trade Act of 1974: Following an investigation by the U.S. International Trade Commission (ITC), the President may impose safeguard tariffs. In 2018, Trump used this authority to levy tariffs of 16–30% on imported solar panels and washing machines.

Section 301 of the Trade Act of 1974: Following an investigation by the Office of the United States Trade Representative (USTR), the President may implement retaliatory tariffs against specific countries, such as the tariffs imposed on hundreds of billions of dollars' worth of Chinese goods during the US-China trade war that began in 2018.

The Shift in Policy Logic from Trump 1.0 to 2.0

During his first term (2017–2021), President Trump frequently employed tariff measures that required prior administrative investigation (Sections 232, 301, and 201). Lacking a Republican majority in Congress and facing re-election pressure, his approach largely respected the separation of powers and established legal procedures.

However, since his re-election in 2025, with Republicans controlling Congress and no re-election burden, the administrative branch has gained significant autonomy and flexibility. The Trump administration has notably shifted toward tariff tools that can be executed directly via executive order, such as IEEPA and Sections 122 and 338. Specifically, should negotiations fail or IEEPA be definitively ruled unconstitutional, the administration may combine different executive tools to form a "tariff combo." For example, by stacking Section 122 (15%) and Section 338 (50%) alongside existing Section 232 and 301 tariffs, the administration could create formidable leverage for trade negotiations.

Policy Risks and Global Implications

The tariff policies of the Trump 2.0 era reflect dynamic shifts in the separation of powers structure and an expansion of presidential authority, exacerbating tensions between the U.S. and its global trade partners. This introduces new legal and geopolitical risks. Faced with these escalating trade strategies, Taiwan and other key trading partners must closely monitor policy developments and proactively plan their response strategies to avoid being caught off guard in the global trade confrontation.
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