Uncertainty around tariff levels and trade policy broadly is high headed into the summer. But U.S. Trade Representative Chief Jamieson Greer offered some guidance Tuesday, raising the possibility that the 10% temporary tariffs set to expire in July could be reimposed and signaling some tariffs could be lowered on Chinese trade and elsewhere.
Greer, speaking at an event hosted by the Council on Foreign Relations, said the U.S. would have a tariff, even with neighbors like Mexico and Canada, as long as trade isn’t balanced. However, he indicated several areas where those tariffs may not be as high as they were last year.
The average effective tariff rate stands at about 11.8% as of April, according to the Yale Budget Lab’s estimates. That’s far higher than 2% before the Trump administration came into office last year but lower than the 18% level where it sat at last year.
Greer said he had a draft ready for the Board of Trade, and the U.S. would soon be seeking public comment on what nonsensitive Chinese goods could be eligible for lowered tariffs, with Greer putting that universe to about $30 billion of goods.
The comments come as companies and countries await more clarity on trade policy after the Supreme Court struck down the administration’s global tariffs and a Court of International Trade said the temporary 10% levies it imposed under Section 122 after that decision were illegal—a ruling the administration has appealed.
“You will have to wait and see. I have some things in the works,” Greer said in response to a question about the legal authority for the tariffs in the trade pacts.
While classified as temporary, Greer also noted that the statute allowing Section 122 tariffs doesn’t indicate when they can be reused. “I can’t imagine Congress can say you can only once per term,” he said.
Most investors have shifted their attention to two investigations USTR launched under the Section 301 of the Trade Act into excess capacity and forced labor. Trump administration officials have suggested they could rebuild most of last year’s global tariffs through levies they could impose following these probes, though Greer didn’t address how much of that could be rebuilt. The U.S. raised roughly $150 billion through the global tariffs before the Supreme Court found them illegal and the refunds process began.
While he said President Donald Trump isn’t interested in “exclusion programs,” he allowed that the administration could modify or narrow measures like tariffs as it takes in public comments on its proposed remedies once USTR completes its Section 301 investigations.
He also noted that current tariff levels were below the levels agreed upon with many countries in the spate of preliminary trade pacts the administration has struck in the past year, with the U.S. having the right to raise tariffs to those levels if needed, but most have a range of goods that are exempt from levies.
That suggested some wiggle room, especially as the U.S. continues to face inflationary pressures made worse by the war in Iran. Greer’s comments on Section 122 tariffs suggests that the administration sees raising rates under Section 301 before the midterms as unpalatable, so he will likely keep them at this low 10% range going into the elections, says Henrietta Treyz, head of economic policy research at Veda Partners.
The one caveat though, Treyz says, is the war in Iran, with the U.S. potentially using tariffs against countries like the United Kingdom, France, and Canada if they don’t assist the U.S.
Greer also signaled that the administration’s efforts to rebuild critical supply chains—a market he says was broken by the Chinese subsidizing production—could mean companies would have to pay a “national security premium” for a source that isn’t from China and subject to being jeopardized and inaccessible.
He highlighted about 60 minerals that are critical, with the U.S. further from self-sufficiency in heavier rare-earths. “We are trying with our trading partners to identify minerals where we can more quickly have supply chain independence,” Greer said, allowing that it could take years in some types of rare-earths.
Greer also offered a quick update on the state of relations with major trading partners: While the U.S. was already having bilateral negotiations with Mexico on renegotiating the U.S.-Mexico-Canada trade pact, discussions with Canada have been more challenging in areas around manufactured goods such as autos.
In what is the clearest messaging so far of a different tack with China, Greer said the administration has “mostly” given up in getting China to agree to reform in ways that tackle structural issues like industrial subsidies that he says are embedded into their political system.
“We’ve come to terms with fact that there isn’t going to be giant, comprehensive reform of the way the Chinese political system works, including economic elements,” Greer said. “But we can have some managed trade and some reforms around that in the interest of stability and continued economic peace between our countries.”
As for trade uncertainty, Greer said everyone should know if they want absolute certainty, they should source as much as possible from the U.S. Plus, he said the administration has signaled that the countries with larger trade surpluses with the U.S.—China falls into that category—will have higher tariffs.
That said, Greer said the U.S. doesn’t want to be in a situation where there is uncertainty about what the tariff rates will be because of court challenges and other factors.