{"id":1207,"date":"2026-07-20T16:16:53","date_gmt":"2026-07-20T16:16:53","guid":{"rendered":"https:\/\/valutednews.com\/?p=1207"},"modified":"2026-07-20T16:16:53","modified_gmt":"2026-07-20T16:16:53","slug":"donald-trump-orders-the-ceremonial-changing-of-the-tariff-guard","status":"publish","type":"post","link":"https:\/\/valutednews.com\/?p=1207","title":{"rendered":"Donald Trump orders the ceremonial changing of the tariff guard"},"content":{"rendered":"
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This article is an on-site version of our Trade Secrets newsletter. Premium subscribers can sign up here <\/a>to get the newsletter delivered every Monday. Standard subscribers can upgrade to Premium here<\/a>, or explore<\/a> all FT newsletters<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

President Donald Trump managing to hand the World Cup trophy yesterday to Spain\u2019s captain without dropping it or trying to take it home himself is one of the few things he\u2019s contrived not to screw up in a long time, though his bizarre appearance in the Spanish team\u2019s trophy lift celebrations soon had him back on form. (Incidentally, the destructive arrogance of the ghastly Argentine team is all too symbolic of the governments that have trashed that country for many decades, about which I\u2019ve banged on at length<\/a>.) <\/p>\n

Trump is still throwing out occasional random tariff threats, but my prediction<\/a> that average import duties would drift down after peaking in 2025 looks solid. Of course part of this is because of the US Supreme Court decision to strike down<\/a> the supposed emergency IEEPA tariffs, the replacement for which I look at today. Charted Waters,<\/strong> where I look at the data behind world trade, is on crude prices adjusted for the importance of oil in the economy. For the next three weeks, this newsletter will be in the supremely capable hands of my colleagues Peter Foster and Aime Williams, after which I\u2019ll be back.<\/p>\n

One bad idea after another<\/h2>\n

I can\u2019t help but feel that the replacement of one set of Trump tariffs by another warrants some official ceremony, like the Changing of the Guard put on by the British Household Cavalry for tourists in London. In February the administration formally retired the IEEPA tariffs, following the Supreme Court ruling, and instituted the Section 122 balance-of-payments tariffs, which were no more helpful<\/a> than their predecessors and had an equally absurd justification.<\/p>\n

The Court of International Trade (CIT), as it had for IEEPA, emerged from the officers\u2019 mess and barked at the Section 122 tariffs<\/a> to return to barracks. Given that those duties have a 150-day limit, the US trade representative\u2019s office (USTR) was in any case already preparing another kind, this time under the Section 301 authority based on \u201cunfair\u201d trade, on top of some Section 232 \u201cnational security\u201d levies that were already in place.<\/p>\n

There will be a messy changeover. The Section 122s expire this week and the administration is racing to get the Section 301s ready. It could otherwise try to set the 150-day clock back to the beginning by creating new Section 122s, creating exciting new opportunities for litigation.<\/p>\n

Unless you believe the Supreme Court will keep endlessly striking down tariff authorities, which I do not in the case of the 301s and 232s, you have to assume that a wall of duties will be put in place somehow. The question is how much uncertainty and inefficiency are created by new tariffs being invented all the time.<\/p>\n

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The Trump administration formally retired the IEEPA tariffs in February, following the US Supreme Court ruling, and instituted the Section 122 balance-of-payments duties<\/span> \u00a9 Bloomberg<\/span><\/figcaption><\/figure>\n

There\u2019s currently a massive surge<\/a> in container rates as shippers try to get goods moved before the new duties come in. The port of Los Angeles handled a record amount<\/a> of cargo in June, for example. Trump\u2019s tariffs are more disruptive to the container industry than is his Iran war, which is quite an achievement.<\/p>\n

The US will impose a new tariff on (some) imports from Brazil on Wednesday, while the current Section 122s helpfully expire two days later, meaning that you\u2019d better time your shipments right.\u00a0This guidance<\/a> from global freight service Gateway Lines gives a small insight into what a pain such decisions create for the industry. Read it and multiply by dozens for all the new tariffs being devised as the administration goes along.<\/p>\n

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If you have cargo on the water right now, one thing decides which rules you pay under: the entry date on your customs filing. Not the sail date, not the invoice date, not the day the vessel arrives. <\/p>\n<\/blockquote>\n

So profits depend on the timing of paperwork. There\u2019s more.<\/p>\n

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Goods that were loaded on a vessel and in transit on the final mode before 12:01am. ET July 22, and that are entered before 12:01am. ET July 29, stay exempt. If you have Brazilian cargo already sailing, keep the load date documentation clean and make sure your broker files within that window. Missing the July 29 entry cut-off puts otherwise exempt cargo into the 25%.<\/p>\n<\/blockquote>\n

All clear? Good. Oh hold on, that\u2019s not all.<\/p>\n

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The surcharge ending is not the same as tariffs ending. In June, USTR issued findings in 60 separate Section 301 investigations tied to forced-labor enforcement and proposed additional duties of 10% to 12.5%. Hearings were held July 7 and the record is closed, so final action could come at any time, and unlike Section 122, a Section 301 action carries no 150-day clock.<\/p>\n<\/blockquote>\n

The Trump tariffs aren\u2019t economically catastrophic, but they are a massive mess.<\/p>\n

The US has legalities, China has leverage<\/h2>\n

In our regular series of What Did You Expect, You Utter Fools?, Bloomberg reports concern<\/a> within the US administration that China is reneging on the terms of the deal struck by Trump and President Xi Jinping in their October meeting in Busan, South Korea. Last month the FT reported that China was restricting trade with several US companies involved in rare earth supply chains.<\/p>\n

It\u2019s not surprising this is happening. It\u2019s surprising that it\u2019s surprising to anyone. The Busan deal was emphatically not agreed from a position of equals. Trump discovered that his clumsy ordnance of tariffs was inadequate against the precision-guided weaponry of China\u2019s rare-earth controls and backed off.<\/p>\n

China\u2019s agreement to suspend rare-earth export restrictions for a year was always going to be fuzzy, given its ability to fine-tune bureaucratic controls on sales. The EU, which also got hit by rare-earth restrictions last autumn, reacted to the potential end of the suspension in October in that most European of ways, by setting up a bureaucratic task force<\/a>. <\/p>\n

We knew what would happen because we have been here before. The first Trump administration signed the Phase One deal<\/a> with Beijing in 2020, promising a bunch of deregulation plus some soyabean and other purchases. The semi-satirical outcome that China couldn\u2019t even be bothered delivering the latter<\/a>, let alone the former, shows it knew just how little retribution it would face.<\/p>\n

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US President Donald Trump, left, struck a pact with Chinese President Xi Jinping at their October meeting in Busan, South Korea. Washington is reportedly concerned that Beijing is reneging on the terms of the agreement<\/span> \u00a9 Reuters<\/span><\/figcaption><\/figure>\n

Beijing is extremely good at knowing where the balance of power lies and using leverage accordingly, no matter what the piece of paper it signed says. I\u2019ve never opened Trump\u2019s absurd (and ghostwritten<\/a>) The Art of the Deal<\/em>, but I\u2019d certainly read a book by Xi on the same subject. <\/p>\n

If I had to guess, I\u2019d say the formal ending of the export control suspension won\u2019t make much difference. China is bound by the agreements it wants to be bound by. One of the reasons it is a pretty enthusiastic member of the World Trade Organization isn\u2019t that Beijing ignores all WTO rules, but that there aren\u2019t many that particularly constrain it. <\/p>\n

The way to deal with leverage is leverage. Neither the US nor the EU has enough of it to affect what China is doing. And Washington and Brussels can\u2019t properly work together to develop rare earths or anything else because, correctly, no one trusts Trump to do so. Xi must think it\u2019s hilarious.<\/p>\n

Charted waters<\/h2>\n

Not only have oil prices gone up by a lot less than many feared, but the falling oil intensity of the world economy means that recent cost pressures are well below the levels in the late 2000s and early 2010s in terms of economic impact.<\/p>\n

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Trade links<\/h2>\n