Indian-origin lawyer Neal Katyal, who earlier led the successful legal challenge against Donald Trump’s sweeping global tariffs in the US Supreme Court, has raised fresh objections to the US President’s attempt to rely on Section 122 of the Trade Act of 1974 to impose new import duties. The provision allows a president to temporarily introduce tariffs of up to 15 percent for a period of 150 days to address balance-of-payments problems, after which congressional approval becomes mandatory.
Responding to the proposal in a social media post, Katyal argued that Section 122 does not provide a strong legal basis for the administration’s current plan. He pointed out that the federal government itself had previously acknowledged in court filings that the law has limited applicability, particularly in cases involving trade deficits rather than balance-of-payments crises.
Citing submissions made by the Department of Justice during earlier litigation, Katyal noted that trade deficits and balance-of-payments deficits are legally and economically distinct concepts. Since Section 122 was designed specifically to deal with balance-of-payments emergencies, he argued that invoking it to justify broad tariff measures tied to trade imbalances would be difficult to defend legally.
Katyal also maintained that if the administration believes the tariff policy is sound, it should seek explicit approval from Congress rather than relying on temporary executive authority. He emphasised that the US Constitution assigns taxation powers to lawmakers, suggesting that long-term tariff measures require legislative backing.
His remarks come shortly after the US Supreme Court invalidated large portions of Trump’s earlier global tariff framework, delivering a major setback to the administration’s trade agenda and triggering renewed debate over the limits of presidential authority in trade policy. Following that ruling, Trump announced a temporary universal tariff on imports, initially set at 10 percent and later increased to 15 percent, invoking Section 122 — a provision that has never previously been used in this manner.
The administration has said the temporary tariff window will allow time to design new trade measures that it believes will withstand legal scrutiny, setting up what is likely to become another significant legal and political confrontation over executive power and US trade policy.
