Tag: U.S.–China trade tensions

The Dollar Decline: The U.S. dollar has weakened to multi-year lows, declining nearly nine percent over the past year as of June 5, 2025 (Reuters). This depreciation coincides with unexpectedly soft U.S. economic indicators—most notably, a contraction in the services sector in May 2025 for the first time in nearly a year—and growing uncertainty over trade policy (Reuters). Simultaneously, debates over Federal Reserve rate cuts have intensified, with markets pricing in almost a ninety-five percent chance of cuts by September 2025, up sharply from under fifty percent in April (Reuters). Against this backdrop, President Trump publicly urged the Fed to lower rates, reigniting concerns about central-bank independence under the Federal Reserve Act of 1913 (12 U.S.C. § 225a) and Congress’s constitutional authority to regulate currency (U.S. Const. art. I, § 8, cl. 5). The dollar’s fall also reflects lingering trade uncertainties surrounding negotiations with China and updated tariff schedules, raising legal questions under the Trade Act of 1974 (19 U.S.C. § 2151 et seq.) and World Trade Organization (WTO) commitments.

OECD Warns Trump: In May 2025, the Organisation for Economic Co-operation and Development (OECD) released a report cautioning that the United States’ escalating tariff measures under the Trump administration are likely to hinder domestic growth and destabilize global trade (OECD, 2025). At issue is the administration’s invocation of Section 301 of the Trade Act of 1974 (19 U.S.C. § 2411), which permits unilateral tariffs on imports deemed unfair. Since 2018, successive rounds of duties have targeted steel, aluminum, and a broad array of Chinese goods, prompting retaliatory levies from key trading partners (Smith & Lee, 2024). This tension raises fundamental questions about the scope of executive trade authority vis-à-vis multilateral obligations under the World Trade Organization (WTO) and the Trade Act itself.

In early June 2025, the Wall Street Journal reported the United States’ decision to impose an additional 25 percent tariff on Chinese semiconductors and electronics, citing persistent concerns over intellectual property theft, forced technology transfer, and threats to national security (Wall Street Journal, June 2 2025). This latest escalation in U.S.–China trade tensions revives debates over the scope of executive authority in trade policy and the proper balance between domestic injury and foreign relations. At its core, the dispute raises questions under Section 301 of the Trade Act of 1974 (19 U.S.C. § 2411), which grants the president broad powers to counter “unfair” foreign trade practices. Moreover, as technology has become integral to both economic competitiveness and military readiness, policymakers argue that semiconductors constitute “dual‐use” goods subject to enhanced scrutiny under the International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.).