Why Bilateral Threats, not a Global Tariff, are the Way Forward

While Trump's trade battles will ultimately play out with Beijing, Brussels and other trading partners, his administration must first navigate Washington's corridors of power. The preference for bilateral confrontation, such as last week’s against Canada and Mexico, isn't just political expediency – it's necessitated by three realities of American trade policy: strict constitutional limits on executive power, difficulties in passing comprehensive tariff legislation, and the fact that just ten partners account for over 80% of U.S. imports.[1]

The U.S. Constitution creates hurdles for globally applicable executive trade action. While Congress has historically delegated specific trade powers to the presidency through various statutes, these delegations have been carefully circumscribed. This is because the U.S. Constitution is unambiguous: Congress, not the presidency, holds primary authority over trade policy.

The Supreme Court has clarified how ambiguous statutory language is interpreted. It recently overturned deference to agency interpretations, and through the major questions doctrine required explicit congressional authorisation for actions of vast economic significance. The "non-delegation doctrine" suggests Congress cannot delegate its core constitutional powers—including potentially its trade authority—to executive agencies without specific limitations and guidelines.

Today's executive trade powers stem entirely from congressional delegation. Over the last 100 years, Congress has passed statutes permitting presidential action under defined circumstances. The powers rest on five pillars (see our Reference Guide): during national emergencies (IEEPA), national security threats (Section 232), unfair trade practices (Section 301), selective discrimination against U.S. commerce (Section 338), and balance of payments crises (Section 122).

Given these constitutional constraints, a global tariff would require Congress itself to legislate the specific rates and structure. However, the political reality of passing such legislation presents its own challenges. Even with potential Republican control of both chambers, building consensus for broad tariff authority would require extensive negotiation and compromise.

Any legislative vehicle—standalone or part of a broader tax package—would need to navigate competing interests. Import-dependent industries would likely oppose blanket tariffs, while domestic manufacturers might support them. Regional interests would vary based on local economic impacts. Reconciling these interests through committee hearings, amendments, and floor debates suggests that any comprehensive tariff legislation would take months, if not longer, to enact.

The structure of US imports makes a global tariff less critical for achieving Trump's trade objectives (see Table 1). US import data reveals remarkable concentration among just ten trading partners accounting for 81% of total imports, worth $2.58 trillion. The European Union leads with 19% ($589.46 billion), followed by Mexico at 15% ($480.05 billion), China at 14% ($448.02 billion), and Canada at 14% ($429.60 billion). The remaining top partners - Japan (5%), South Korea (4%), Viet Nam (4%), Chinese Taipei (3%), India (3%), and the United Kingdom (2%) - account for the rest.

This concentration means targeted bilateral actions against major trading partners could achieve similar results to a global tariff while staying well within existing statutory authorities. The administration could use Section 301 for China, IEEPA for specific confrontations with Canada and Mexico, or other authorities for targeted pressure on other major trading partners. Courts have historically shown strong deference to executive determinations of national security and emergency conditions in trade matters, making these targeted approaches legally resilient.

Table 1: Top 10 sources make up 80% of US goods imports

Source: UN Comtrade, US imports in 2023.

These constitutional, legislative, and economic realities suggest Trump's trade policy will likely focus on bilateral pressure rather than sweeping global tariffs. For trade policy experts, this means preparing for a series of targeted confrontations instead of a uniform tariff shock. Each bilateral dispute will require careful constitutional engineering within existing powers, but the concentration of US imports among major trading partners makes this approach both practical and potentially effective. The specter of expansive executive trade power may not be over, but it is evolving into a more tactical game of country-by-country pressure.

Johannes Fritz is Chief Executive Officer of the St.Gallen Endowment for Prosperity through Trade, home of the independent monitoring initiatives Global Trade Alert, Digital Policy Alert and the New Industrial Policy Observatory.