Trump's Revived Trade Weapon: Section 338 from the 1930 Act

President Donald Trump is considering using the largely forgotten Section 338 of the Trade Act of 1930 to impose tariffs on countries that discriminate against U.S. commerce. This swift-acting trade tool would allow the president to unilaterally enforce tariffs within 30 days, bypassing lengthy investigations.

President Donald Trump is poised to reactivate a seldom-used 1930 trade law to support new reciprocal U.S. tariffs, according to trade and legal experts. Section 338 of the Trade Act of 1930 could enable Trump to enforce tariffs swiftly, sidestepping prolonged scrutinies and public consultations.

The law empowers the president to impose duties up to 50% on imports from nations deemed to discriminate against U.S. commerce unfairly. Trump's administration has expressed dissatisfaction over the imbalanced tariff rates, pointing out disparities such as the European Union's 10% auto tariff compared to the U.S. rate of 2.5%.

The revival of Section 338 could significantly challenge the current Most Favored Nation tariff system, potentially instigating unilateral negotiations. Critics warn of a repeat of the restrictive trade practices that deepened the 1930s depression, as echoed by historical references, including an unused threat against major nations in the 1930s by the Roosevelt administration.

(With inputs from agencies.)