Sign in Subscribe
Appeals (Law)

Trump's Trade Plan Faces Latest Legal Barrier in US Appeals Court

Strategic Insights

— 2 min read

Canada is bracing for a potential U.S. trade war as the country waits to see if the federal appeals court will uphold a ruling that limits President Trump's authority to impose tariffs. Trump's ultimatum for countries to make trade deals with the U.S. by August 1 has yielded few results, with only a handful of countries having signed frameworks for trade agreements. Canada, in particular, is a target of Trump's ire, with the U.S. president warning of 35% tariffs if a deal is not reached.

Key Takeaways:

  • The US federal appeals court will hear a case challenging Trump's use of the International Economic Emergency Powers Act of 1977 to impose tariffs on nearly every country.
  • Trump's ultimatum for countries to make trade deals with the U.S. by August 1 has yielded few results, with only a handful of countries having signed frameworks for trade agreements.
  • Deals have been announced for Japan, Vietnam, Indonesia, the Philippines, and the United Kingdom, but an agreement with Canada is far from complete.
  • The Trump administration has appealed a lower court ruling that said Trump does not have the authority to wield tariffs on nearly every country through the use of IEEPA.
  • The U.S. Court of International Trade ruled in May that Trump's use of IEEPA to impose tariffs is unconstitutional and beyond his presidential powers.
  • Canadian officials have downplayed expectations of a new economic and security agreement materializing by Friday, despite Trump's threat to impose 35% tariffs if a deal is not reached.
  • The case combines two different challenges to Trump's tariffs, one involving five American small businesses and the other from 12 states.
  • The hearing will be held on Thursday and will determine whether Trump's use of IEEPA is constitutional and whether he has the authority to impose tariffs on nearly every country.

Statistics:

  • Only a handful of countries (5) have announced trade agreements with the U.S. since Trump's ultimatum, while 35 countries were affected by Trump's tariffs.
  • The IEEPA statute gives the U.S. president authority to control economic transactions after declaring an emergency, but has not been used for tariffs before.
  • Trump's use of IEEPA has been challenged in the U.S. Court of International Trade, which ruled that it is unconstitutional and beyond his presidential powers.

Sources:

  • The Canadian Press: "Trump's trade plan faces latest legal barrier in US appeals court"
  • The White House: "Letter to Prime Minister Mark Carney threatening to impose 35% tariffs on Canada if a trade deal is not reached by August 1."
  • US Court of International Trade: "Ruling on Trump's use of IEEPA to impose tariffs"
  • The U.S. Constitution: Article I, Section 8, Clause 1, which gives power over taxes and tariffs to Congress.

Read more