President Donald Trump is considering invoking a nearly forgotten 1930 trade law to back his plans for imposing tariffs that mirror the high import taxes of other countries. Section 338 of the Trade Act allows the president to quickly impose tariffs of up to 50% on imports from countries found to discriminate against U.S. commerce.
Trump has repeatedly criticized the U.S. for charging lower tariffs than many other nations, particularly the European Union, which levies a 10% tariff on automobiles, while the U.S. rate is just 2.5%.
Section 338 offers a fast track to imposing tariffs—unlike other trade tools used by Trump in his first term, such as the Section 232 national security law, which takes months to implement. Section 338 allows tariffs to be enacted within 30 days, which would align with Trump’s preference for swift action.
In fact, Trump has already taken similar steps, such as raising aluminum tariffs to 25% and imposing new tariffs on goods from China, Mexico, and Canada using other fast-acting powers.
Nazak Nikakhtar, a former senior Commerce Department official, explained that while Section 338 was explored during Trump’s first term, it was not used because other tools were more familiar. However, the law’s quick action remains a key advantage.
Section 338 is part of the 1930 Trade Act, which is notorious for triggering retaliatory tariffs that worsened the Great Depression. In the years following World War II, countries sought to avoid such trade wars by standardizing tariffs through the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO).
If Trump uses Section 338, experts warn it could undermine the multilateral tariff system and disrupt the WTO’s Most Favored Nation (MFN) agreement, which aims to prevent discriminatory trade practices. John Veroneau, a former U.S. trade representative, likened it to an “earthquake” in global trade policy.
Trump’s aim seems clear: to bring U.S. tariffs more in line with those of other countries. For instance, the U.S. imposes an average tariff of about 2.2%, while countries like India (12%) and Brazil (6.7%) charge much higher rates.
While the exact details of Trump’s plan are still unclear, legal experts believe Section 338 could withstand legal challenges because the global tariff system is riddled with inconsistencies.
In addition to tariffs, Trump may also focus on regulatory practices that disadvantage U.S. exports. This could include regulations on genetically modified crops or vehicle safety and emissions standards in the EU and Japan, which some argue unfairly block U.S. products.
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