Just hours after the Supreme Court struck down President Donald Trump’s global tariffs on Friday, he signed an order to impose another package of levies under a different law that wasn’t affected by the court’s decision......

But the actual language of the Trade Act lists requirements that don’t exist today, including a “large and serious” balance-of-payments deficit.

While the U.S. has run a trade deficit for decades, it’s been offset by capital inflows as foreign investors pour billions into financial markets, resulting in a net balance of zero.

“Section 122 of the 1974 Trade Act, on which Trump’s 10% tariff is based, does not apply in the current macro environment,” said Peter Berezin, chief global strategist at BCA Research, in post on X on Friday. “A balance of payments deficit is not the same thing as a trade deficit. You cannot have a balance of payments [deficit] if you have a flexible exchange rate, as the US currently does.”

Similarly, economist Alan Reynolds, a senior fellow at the Cato Institute, pointed out that the trade deficit is fully funded by the capital account surplus, adding that there is no overall balance-of-payments deficit to justify Trump’s newest tax on imports.....

“Section 122 only authorizes tariffs in the presence of a fundamental international payments problem,” he added. “Because the United States does not face such a problem, Section 122 cannot legally be used by President Trump to impose new tariffs.”