Yuyuantan Sky: After the U.S. Supreme Court ruling, tariffs under the IEEPA against China should be automatically canceled

PANews February 22 News, Yu Yuan Tan Tian posted an article stating that since February last year, the United States has imposed new tariffs on China based on the IEEPA, mainly consisting of two parts. One is the so-called “Fentanyl Tariff,” currently at a 10% rate for China; the second is the so-called “Reciprocal Tariff,” with a 10% rate currently enforced on China, while the remaining 24% rate is temporarily suspended. According to the U.S. executive order, these tariffs implemented under the U.S. International Emergency Economic Powers Act (IEEPA) will “be terminated as soon as possible.” After the U.S. Supreme Court issued its ruling, it also means that the administrative order canceling IEEPA tariffs issued by the U.S. based on the Supreme Court decision applies equally to relevant parts of the China-U.S. tariff arrangements, and the IEEPA tariffs on China should be automatically canceled.

The latest so-called “temporary tariffs” imposed by the U.S. invoke Section 122 of the Trade Act of 1974, which has not been used for a long time, on the grounds of “fundamentally addressing the U.S. international balance of payments,” especially to resolve the large U.S. trade deficit. However, the applicability of Section 122 presupposes that the U.S. international balance of payments is fundamentally problematic. Legally, this judgment is not based solely on a merchandise trade deficit but on the overall international balance of payments, including capital flows, goods, and services trade. From this perspective, after the implementation of this tariff, the U.S. may face the risk of being sued, as it has in the past. Cui Fan, who is familiar with international trade negotiations, stated that if the U.S. stops related measures or lowers the tariff rates, China may evaluate and adjust based on actual changes; but if the U.S. continues to impose new tariffs using other legal tools, China will also assess whether to take corresponding measures.