Hello everyone and welcome to the Cato podcast.

My name is Clark Packard. I'm a research fellow and Cato's Herbert A. Steeple Center for Trade Policy Studies.

And I am Alfredo Carrillo Obregone. I am a policy analyst at the Steeple Center.

Today we're here to discuss Section 122 of the Trade Act of 1974,

which is the legal basis for President Trump's latest tariffs and the subject of a new

Cato briefing paper that Alfredo and I wrote. So a little more than a year ago, the president

imposed aggressive tariffs under the International Emergency Economic Powers Act.

Those tariffs were challenged in court, and back in late February, the U.S. Supreme Court struck them down in a six to three decision.

During the press conference, shortly thereafter, the president announced a new slate of 10% tariffs imposed under Section 122 of the Trade Act of

1974. Section 122 tariff authority is based on large and serious balance of payments problems

facing the U.S. These temporary tariffs will expire this number. Think of them as bridge tariffs, while the administration investigates and will subsequently

impose permanent tariffs on a number of trading partners under Section 301 of the Trade Act.

Section 122 tariffs were challenged in court by some private sector plaintiffs who paid tariffs under Section 122,

as well as a group of 24 different states. On May 7th, the Court of International Trade issued a

two to one decision, striking down the tariffs, but dismissing 23 states for lack of standing.

Only the state of Washington established that it had standing since

the University of Washington is essentially an instrumentality of the state government, and they were

able to show that they had paid Section 122 tariffs. The Trump administration announced shortly after

that decision that it was appealing the court's ruling, and we will see how this litigation plays out.

So with that, let me turn it over to my colleague and co-author on the paper, Alfredo.

So walk us through Section 122. What is it? What led to its creation?

Section 122 of the Trade Act of 1974 allows the precedent to impose terrorists in response to, quote, international payments problems, which results from a combination of international trade and investment factors.

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