Holding All the Cards

A federal appeals court ruled seven to four on August 29 that US President Donald Trump’s application of tariffs under the International Economic Emergency Powers Act (IEEPA) of 1977 exceeded his authority. The White House has appealed to the Supreme Court, which will have the final say. 

But, regardless of how the court rules, Trump’s tariff strategy is not going anywhere. His real weapon? Section 232 of the Trade Act of 1962—a legislative ace in the deck of economic warfare. 

Tariffs have been wielded with the aim of ending trade deficits, reshoring manufacturing, raising trillions in revenue, and reshaping geopolitics and alliances. Section 232 gives the president near-total control over how and when to wield them. 

Upping the Ante 

Section 232 allows the president to restrict imports if the secretary of commerce finds that they “threaten to impair” national security. Since the secretary can initiate investigations and recommend outcomes, the process is tailor-made to serve the president’s agenda. 

Trump has launched 18 investigations since 2016—nearly half of all Section 232 cases initiated since the law’s inception in 1962. 

There are three key reasons why Section 232 investigations and tariffs remain Trump’s go-to tools: 

  • Flexible Definition of National Security 
    The statute provides no definition for “national security”, giving the administration broad interpretive power. Courts have historically deferred to the president on such matters. 
  • Unlimited Power to Define Remedies 
    According to 19 USC 1862(C)(1)(a)(ii), if the president concurs with the commerce secretary’s decision, he determines the nature and duration of any remedy. Translation: He sets the rules, the timeline, and the targets. Remedies can be adjusted on a whim. For example, after meeting with US and Japanese steel executives on May 30, 2025, Trump announced at a rally that tariffs would jump from 25% to 50% effective June 3. 
  • Expansive Definition of Covered Products 
    Tariffs can expand without warning to cover downstream and derivative products. The steel and aluminum tariffs in place since 2018 were extended in June 2025 to include large household appliances—no notice, no investigation. A total of 407 products, including lawnmowers, shaving cream, and milk, were added in mid-August based on requests from domestic interested parties. Even beer imports were hit, thanks to the inclusion of aluminum cans. 

The Ripple Effect 

As investigations wrap up in sectors such as semiconductors and pharmaceuticals, entire swaths of the economy could be pulled into the tariff net. 

This strategy is working in the president’s favor. High, targeted tariffs have extracted concessions in recent trade deals. Auto tariffs were a pressure point for Europe, Japan, and South Korea, and they will be front and center in the upcoming United States-Mexico-Canada Agreement review. 

To date, no one has dared challenge Section 232 tariffs—not Congress, not the courts. Despite thin evidence and strained national security claims, the fear of White House displeasure has silenced opposition. 

What Could Change? 

Could anything constrain Trump’s tariff playbook? Possibly. While exclusions have been rare in 2025, a September 5 executive order expanded the list of exempt products to include a broader range of unavailable natural resources and other items needed for US industries. 

Bottom line: The president’s tariff strategy will continue. Brace for continued uncertainty. The IEEPA court battle may grab headlines, but Section 232 is where the real power lies—and Trump still holds plenty of cards. 

Penny Naas is acting senior vice president, GMF Innovation and Competitiveness at the German Marshall Fund of the United States