At least parts of President Donald Trump's sweeping tariff regime will likely be overturned by the US Supreme Court, according to former US trade representative Robert Lighthizer, but the administration will find other ways to keep their intent intact.
"My guess is that there'll be, to some extent, an overruling of what he did," Lighthizer said today at the Argus Americas Crude Summit in Houston, Texas.
Lighthizer, considered an architect of the current White House tariff policy, said they would not go away even with an unfavorable court ruling, which is expected in the coming weeks.
"It's clearly easier and better if you can do it under IEEPA," Lighthizer said, referring to the International Emergency Economic Powers Act, the 1977 law that Trump has used to impose reciprocal tariffs on dozens of global trading partners. "But if he can't, I think he'll have the same policy," just using other tools to impose similar tariffs. "He has those tools. It's a little more complicated process."
Lighthizer, who helped orchestrate the US-Mexico-Canada Agreement (USMCA) in 2020 that spells out trade between the three countries, said further changes were needed as a renewal of the deal approaches later this year.
"There will be some tweaks in Canada," he said, particularly with regard to agriculture. "There'll be some more substantial change with respect to Mexico, and particularly taking on this issue of China's influence in Mexico."
Direct energy imports have largely been spared from most of the Trump tariffs, but oil companies complain tariffs have increased drilling costs by making steel imports more costly. The uncertainly of the on-again/off-again tariff have also increased economic uncertainty and made planning difficult for energy firms.
But Lighthizer said Trump has a "very favorable attitude" toward the energy sector in general. While tariffs may have increased the cost of steel "the payoff will be pretty big" he said, when the wider economy takes off as a result of a rebalance of long-standing trade deficits.
Lighthizer dismissed arguments that tariffs cause inflation, and said the policy has been a great success.
"You can say they could have done it in a less chaotic way," Lighthizer said. "Maybe that's true, maybe it's not true."
