News / US says it will 'find other tools' to tax imports if tariffs are ruled illegal

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The US administration says it will “find other tools” if the Supreme Court rules IEEPA tariffs unlawful – which could lead to another spike in transpacific demand.  

It is looking likely that the lower court ruling that tariffs based on the IEEPA [International Emergency Economic Powers Act] are illegal will be upheld, which would result in tariffs being revoked and refunds on paid duties. 

However, at an event hosted by the Atlantic Council yesterday, trade representative Jamieson Greer suggested Congress could seek to legislate new rules for US trade in the longer term.

“I’m confident that with other tools we have related to unfair trade practices, we can produce the revenues we need,” he said.

Charles Marale, CEO and founder of ExFreight, told The Loadstar this could lead to another round of front-loading. He added that ExFreight had already handled “Covid-levels of shipment counts” this year due to front-loading.  

“Any other tariff paths for the administration would take time to put in place, and therefore we could see another rush of front-loading if the IEEP tariffs are found to be illegal,” he explained.

Peter Sand, chief analyst at Xeneta, told The Loadstar: “American shippers get no good news for their business from this government, all they get is legal framework jitters and uncertainty. 

“Sorry to say it, but it’s just such a mess,” he added.  

Mr Sand believes a “tariff vacuum” is unlikely, but noted that front-loading “would be relevant to consider for every importer” if it were to happen. 

“But don’t expect a tsunami of goods like you’ve never seen before, as the American consumer [market] simply isn’t that strong,” he warned.  

According to Container Trades Statistics data, containerised US imports from all origins were down 1.7% in the January to October period, compared with last year.  

Mr Sand advised shippers to look at the capacity offered by carriers in the coming 12 weeks and note those that have the most space on offer, “should a rush of cargo develop”.  

He told The Loadstar that, based on Xeneta’s eeSea platform data, MSC and the Ocean Alliance would provide this for Far East to US east coast.

Further, he warned those shifting cargo to ensure that if/when rates rise, which would be the case during a sudden front-loading event, not to get “caught out” with agreements that may not be honoured.  

“Shippers should benchmark their contracts against the market. Index-linked contracts seem to be in the sweet spot in such event – sudden/renewed front-loading,” Mr Sand advised.