But the president misreads the statute. The provision is not about
trade imbalances. Other
parts of the statute address those. It is about
financial imbalances — in particular ones that threaten financial stability.
The text and context of the law is clear: A Section 122 “payments problem” involves a flight from the U.S. dollar. At the moment, no such problem exists.
The president’s own lawyers essentially admitted as much months ago. In a filing in the earlier case, the Justice Department
acknowledged that trade deficits are “conceptually distinct from balance-of-payments deficits,” citing the congressional history. And it suggested that Section 122 did not give the president the authority to impose tariffs to address trade deficits. (Section 122 does not “have any obvious application” where the concerns “arise from trade deficits,” the Justice Department’s lawyers wrote.)