Legal basis for imposing tariffs

(1) Authority to levy tariffs, which should properly reside with Congress rather than the President

• According to the principle of constitutionality, the authority to impose and collect tariffs resides with the Congress (as the legislative body of the Federation) (Article 1, Sections 8 (Note 1) and 10 (Note 2) of the US Constitution).
• However, the Trump administration has launched a series of policies seeking to impose high tariffs solely through executive orders issued as the head of the executive branch of government. How could this be possible?

(2) Authority granted to the President through acts of Congress

• In fact, apart from such principle of constitutionality, the authority to impose tariffs has been delegated to the President through specific legislation to enable the implementation of flexible tariff policies. In each case, such authority is granted solely for exceptional circumstances, and each of the specific conditions under which it can be invoked is predetermined, which marks the boundaries for the presidential power regarding the tariff policy.
• Many of the following statutes which serve as the basis for the tariff policies require several months of investigation before tariff policies can be invoked. (Indeed, at the time of writing this blog article, even in cases in which it is reported that “President Trump is directing tariff policy”, some are merely at the stage where investigations have commenced.) That being said, it is considered that existing measures to which an amendment is made can be implemented without the need for a new investigation, provided that such amendment is only made within the framework of such measures (as has been the case in past administrations), and it should also be noted that an existing measure to which an amendment is made may be implemented without a new investigation needing to be conducted.
  

Statues	Overview
International Emergency Economic Powers Act (the “IEEPA”)	The IEEPA gives the President the discretion to impose embargoes and financial sanctions, etc. when an unusual and extraordinary threat is recognized to national security, foreign policy, and the US economy. There is no need for a prior investigation period. The IEEPA has generally been used for embargoes and similar measures. However, in the recent imposition of tariffs against Canada, Mexico, and China (see Part 1, <Summary of Measures Taken Since Inauguration>, 2 and 3), this Act was used as the basis for invoking such tariff measures on the grounds of threats purportedly posed by illegal immigrants and illicit drugs, including fentanyl. The IEEPA was also used as the basis for the sanctions imposed on the Colombian government for refusing to repatriate illegal immigrants (see Part 1, <Summary of Measures Taken Since Inauguration>, 1).
Section 122 of the Trade Act of 1974	This provision grants the President the authority to impose tariffs of up to 15% on “large and serious” balance-of-payments deficits President Trump has been talking about the possibility of universal baseline tariffs for the entire world since the presidential election campaign, and although it is for a limited period of 150 days (which can be extended by an act of Congress), this provision could theoretically serve as the basis for imposing such universal baseline tariffs of up to 15%.
Section 201 of the Trade Act of 1974	This is a safeguard provision to address a sharp increase in imports. Under the previous Trump administration, solar cells, modules and washing machines were subject to this provision.
Section 301 of the Trade Act of 1974	This provision can be invoked when unfair trade practices, such as tariffs or other trade restrictive measures, adversely affect US trade. This provision was used as the legal basis for tariffs imposed on China by the first Trump and Biden administrations.
Section 232 of the Trade Expansion Act of 1962	This provision grants the president the authority to restrict imports of certain products if such imports pose a threat to US national security. Prior investigation and public comment are required in order to provoke this provision. During the first Trump administration and the Biden administration, tariff measures were imposed on steel products (25%) and aluminum (10%). Following their implementation, Japan was exempted from the application of such tariffs through the conclusion of an agreement with the United States. The second Trump administration will raise the tariff rate on aluminum to 25% (excluding Russia, which has already been imposed a 200% tariff as a sanction) within the framework set by the first administration after going through investigations, etc., and will then further raise the tariff rate by abolishing the existing exemptions (see Part 1, <Summary of Measures Taken Since Inauguration>, 4). This provision may also be used as the basis for the “automotive tariffs" announced on February 18, 2025, although this is still unclear. On March 3, 2025, it was reported that the United States would commence investigation procedures based on this Section in response to its lumber imports from Canada.
Section 338 of the Customs Act 1930	This provision grants the President the authority to impose tariffs of up to 50% on imports from countries that are “discriminating” against US commerce in comparison with other countries. However, since WTO members are bound by mutual most-favored-nation obligations, there is little opportunity to invoke such provision. Furthermore, if this Act is applicable, the aforementioned Section 301 will also be considered applicable, so it has not been used in recent times.

• As for the “reciprocal tariffs,” which we mentioned in the first issue, there is no precedent for such tariffs, and close attention will need to be paid as to what will be the basis for their implementation. While some view Section 122 of the 1974 Trade Act and/or Section 338 of the 1930 Customs Act as candidates for being such basis, the situation remains unclear, and it will be necessary to keep watching how such basis will be structured, including the possibility of entirely new legislation being enacted.
• In addition, with regard to the taxation policies implemented under President Trump’s executive orders, there is still much debate among US experts concerning the extent to which such policies can be implemented as an exercise of presidential authority (see the article by the Council of Foreign Relations (CFR) as a helpful reference. https://www.cfr.org/report/tariffs-trading-partners-can-president-actually-do).

*Disclaimer: The information above is current as of March 18, 2025. The content of this blog is provided for general informational purposes only and does not constitute legal advice or a legal opinion. Please note that the content may not reflect the most current legal or regulatory developments. Readers should not act or rely on any information in this blog without consulting qualified legal counsel. Transmission of this information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. TMI Associates disclaims all liability for actions taken or not taken based on any content on this site.

 

Introduction of TMI’s Customs and Duties Team and International Trade Practice Group

At TMI, our team includes attorneys who have experienced secondments at the Ministry of Foreign Affairs and the Ministry of Economy, Trade and Industry, as well as advisors formerly from the Ministry of Finance and other governmental agencies. These team members handle customs issues and other international trade matters. 

International trade law, which is grounded in intergovernmental agreements such as World Trade Organization (“WTO”) agreements, the Fair Trade Agreement (“FTA”), and the Economic Partnership Agreement (“EPA”), etc., directly affects the activities of private enterprises. In recent years, regulatory actions by the competent authorities have intensified not only in the United States but also across Asia, South America, and other regions, further heightening risks for globally active companies. 
Drawing on extensive experience across both domestic and international trade issues, TMI handles international trade matters both at the phase of using existing systems and of taking preventive measures.

(1) Cross-Border Practice

If our clients become involved in investigations into anti-dumping duties, countervailing duties, safeguard measures, or involved in investigations initiated by overseas authorities, or face other regulatory issues affecting trade or investment abroad, we leverage the resources of our own overseas offices as well as cooperation with foreign law firms to deliver the best advice possible. Where appropriate, we also support our clients in preparing and submitting opinions to the Japanese government in view of filing complaints against the WTO, thereby enabling our clients to raise challenges against foreign governments through the Japanese government.

(2) Domestic Practice

TMI also has extensive experience in the latest domestic practices, including advising the Japanese government in connection with international trade disputes, as well as conducting research on the application of Japanese trade laws and regulations. Our expertise further encompasses advising and representing domestic and international corporations, industry associations, and other entities, including providing filing application services for anti-dumping duties, countervailing duties, and safeguard measures on imports from foreign countries, as well as customs related services (tariff classifications, country-of-origin labeling, etc.). When necessary, our team works seamlessly with professionals across TMI in related areas such as antitrust and competition law, tax, and information and communications law to deliver integrated and comprehensive solutions.

For inquiries, please contact our team at: trade-customs(at)tmi.gr.jp (when entering the address, please replace “(at)” with “@”).

TMI Associates
Attorneys
Kazuhide Ueno, Shinichiro Ishihara, Shinya Sakuragi, Yu Tomii, Leo Yamada, Kotaro Kunii

Note 1: Article 1, Section 8 of the US Constitution: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” Source of translation: The National Constitution Center, https://constitutioncenter.org/media/files/JPN-Constitution.pdf

Note 2: Article 1, Section 10 of the US Constitution: “No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress.” Id.
*In the United States, which is a federation in which the division of authority between the federal government and the states has been a matter of concern, this provision stipulates that the Congress of the federal government, not the individual states, has the uniform authority to impose and collect tariffs.