Crumbles

Legal defeats at home leave the White House with dwindling leverage as trade talks begin in Beijing.

President Donald Trump heads into this week’s summit with Chinese President Xi Jinping with a major embarrassment back home: the legal foundation of his aggressive tariff strategy is rapidly eroding.

Trump expects to meet Xi in Beijing from May 14 to May 15 to discuss trade, the war in Iran and, possibly, Taiwan. But the meeting comes as federal courts rule against Trump’s sweeping tariff measures, including the 10% global duties and triple-digit levies on Chinese goods that the White House once promoted as a key source of leverage over Beijing.

The rulings, the most recent of which was on May 7, weaken one of Trump’s most aggressive economic weapons just as Washington, D.C., tries to navigate an increasingly fragile geopolitical landscape.

Trump has refused to concede defeat. In March, he defended the tariffs on his social platform, Truth Social. He argued that Section 122 of the Trade Act of 1974 “fully allowed” and “legally tested” the levies. Trump is the first president to invoke Section 122.

Now, his administration is looking to Section 301 of U.S. trade law as a potential path to impose tariffs with fewer legal vulnerabilities.

What’s Section 301?

Section 301 is a provision of the Trade Act of 1974 that empowers the U.S. president to impose tariffs or other penalties on countries accused of unfair trade practices.

But analysts warn that the strategy may also face significant legal and procedural obstacles — worse than Section 122.

“Section 301 tariffs involve a more cumbersome investigatory process before they can be imposed. That is why Trump has preferred other statutes such as [The International Emergency Economic Powers Act] and Section 122, which he attempted to implement by simple executive order,” said Phillip Magness, senior fellow at the Independent Institute.

With Section 122 of IEEPA, the Trump administration sought to revive a long-dormant statutory provision and reinterpret Congress’s definition of “balance of payments” to justify using it against modern trade deficits. If Trump pivots to Section 301 as his next option, his powers are more restricted and must meet more onerous regulatory requirements.

Magness expects this will potentially trigger another wave of lawsuits.

“Trump will attempt to stretch the language of Section 301 as well, in which case there will probably be court challenges to some of his weaker Section 301 findings,” Magness said.

Since April of last year, hundreds of companies have challenged the tariffs in court, including Costco Wholesale Corp., Prada SpA, Staples Inc. and Bumble Bee Foods, along with foreign firms such as BYD Co., Kawasaki Motors and Yokohama Rubber Co.

Iran and Taiwan

The summit also unfolds against a dramatically altered geopolitical backdrop from the leaders’ last meeting in South Korea in October, when both sides agreed to temporarily pause an escalating trade war after China threatened restrictions on rare earth exports.

Since then, Trump has become increasingly consumed by the conflict with Iran — one of China’s closest Middle Eastern allies — a war that has contributed to a global energy crunch and redirected U.S. military resources away from Asia.

The conflict has also strained U.S. munitions stockpiles, fueling speculation among some Chinese analysts about Washington’s ability to defend Taiwan in a prolonged regional confrontation, according to reports from The New York Times.