President Donald Trump’s latest attempt to keep new tariffs in place is already facing fresh legal criticism, and Rep. Mike Levin says trade experts are lining up against it.
“Trade experts now agree Trump’s tariff ‘Plan B’ is illegal, too,” Levin wrote in a post on X.
He added that Trump is “using a law from 1974 that only allows temporary tariffs if the United States can’t pay its bills.”
Levin called the move “an illegal tax on Americans to give Trump more power. Or, as he might say, a total con job.”
The dispute began after the Supreme Court struck down Trump’s global tariffs that had been imposed under the International Emergency Economic Powers Act.
Supreme Court Ruling And Plan B Shift
Within hours of that decision, Trump signed a new executive order invoking Section 122 of the Trade Act of 1974.
Section 122 allows a president to impose tariffs of up to 15% for as long as 150 days to address what the law describes as a “large and serious” balance-of-payments deficit.
Trump initially set the new tariffs at 10%, then raised them to 15% less than a day later.
In remarks to reporters, Trump defended his authority to pursue other options after the court’s ruling.
“The good news is that there are methods, practices, statutes, and authorities as recognized by the entire court in this terrible decision, and also recognized by Congress, which they refer to that are even stronger than the IEEPA tariffs available to me as president of the United States,” Trump said.
But several economists and trade analysts argue that Section 122 does not apply to the current U.S. economy.
Experts Say Balance Of Payments Requirement Not Met
Peter Berezin, chief global strategist at BCA Research, wrote on X that “Section 122 of the 1974 Trade Act, on which Trump’s 10% tariff is based, does not apply in the current macro environment.”
He added, “A balance of payments deficit is not the same thing as a trade deficit. You cannot have a balance of payments [deficit] if you have a flexible exchange rate, as the US currently does.”
While the U.S. has run a trade deficit for decades, economists note that it is offset by strong capital inflows. Foreign investors continue to put money into U.S. stocks, bonds, and other assets.
Under a floating exchange rate system, that inflow balances out the broader international payments picture.
Bryan Riley, director of the National Taxpayers Union’s Free Trade Initiative, argued in a recent blog post that Section 122 was designed for a different era.
According to Fortune, Riley argued in a recent blog post that “Section 122 only authorizes tariffs in the presence of a fundamental international payments problem.”
He added, “Because the United States does not face such a problem, Section 122 cannot legally be used by President Trump to impose new tariffs.”
Levin also questioned whether the tariffs are delivering the economic results Trump promised.
Levin Questions Economic Impact And Promises Refunds
“Remember how Trump said he’d stop our country from getting ‘ripped off’?” Levin wrote.
“The trade deficit hasn’t meaningfully gone down. Prices have gone up, and small businesses and consumers are paying more.”
He pledged to push for refunds of any money collected under the new tariffs, writing, “I will fight until every dollar collected under these illegal tariffs is refunded.”
The White House has also announced exemptions under Section 122 that largely mirror earlier carve-outs, including for autos, coffee, and electronics.
At the same time, the administration is pursuing other legal paths.
Other Legal Paths Still In Play
Trump said officials would begin investigations under Section 301 of the 1974 law, which addresses unfair trade practices.
Tariffs under that authority would require a formal investigation process that could take months.
The administration is also continuing investigations under Section 232 of the 1962 Trade Expansion Act, which allows tariffs on national security grounds.
Analysts at JPMorgan said in a note that uncertainty around trade policy is likely to continue.
“Needless to say, trade uncertainty in the coming months will remain elevated,” the analysts wrote.
“Our base case remains that the average tariff rate will settle around the current rate of 9-10%, but the path forward will be fraught with considerable uncertainties.”
For now, the debate centers on whether Section 122 can legally justify the new tariffs at all.
Critics say the required balance-of-payments crisis does not exist. Supporters of the administration argue that the president has broader authority to act.
Levin, for his part, framed the issue in simple terms. He described the tariffs as “an illegal tax on Americans” and said they shift costs onto consumers and small businesses.
As the legal and political fight continues, the question is not just about trade policy, but about the limits of presidential power, and who ultimately pays the price.
IMAGE CREDIT: “President Donald Trump” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.