Trump's Tariff Plan Dealt Major Blow as US Court Rules Against President's Authority

Strategic Insights -

The US federal appeals court has ruled that President Donald Trump had no legal right to impose sweeping tariffs on almost every country on earth. The 7-4 ruling, which largely upheld a May decision by a specialized federal trade court in New York, found that Trump overstepped his authority under an emergency powers law. Despite this, the court did not strike down the tariffs immediately, allowing the Trump administration time to appeal to the Supreme Court. The decision is a significant blow to Trump's ambitions to upend decades of US trade policy completely on his own.

Key Takeaways:

  • The US federal appeals court ruled that President Trump had no legal right to impose sweeping tariffs on almost every country on earth under the emergency powers law.
  • The ruling was 7-4, with the judges writing that it seems unlikely that Congress intended to grant the president unlimited authority to impose tariffs.
  • The court did not strike down the tariffs immediately, allowing the Trump administration time to appeal to the Supreme Court.
  • The president has vowed to do just that, calling the decision "a disaster" that would "literally destroy the United States of America."
  • The ruling complicates Trump's ambitions to upend decades of US trade policy completely on his own, as he faces alternative laws for imposing import taxes.
  • The tariffs, and the erratic way he's rolled them out, have shaken global markets, alienated US trading partners and allies, and raised fears of higher prices and slower economic growth.
  • Revenue from tariffs now totals $159 billion, more than double what it was at the same point the year before.
  • Trade attorney Ryan Majerus estimates that if the tariffs are struck down, there could be a financial blow to the US Treasury, with importers requesting refunds for previously collected tariffs.
  • Attorney General Pam Bondi has vowed to appeal the ruling, promising to continue to fight for the president's central role in foreign policy.
  • The ruling involves two sets of import taxes, both of which Trump justified by declaring a national emergency under the 1977 International Emergency Economic Powers Act (IEEPA).

Statistics:

  • Revenue from tariffs now totals $159 billion, more than double what it was at the same point the year before.
  • 49 straight years, the US has run trade deficits, with the most recent deficit totaling $457 billion.
  • The plaintiff group argued that the emergency power law does not authorize the use of tariffs, with several countries facing tariffs on goods such as steel, aluminum, copper, and automobiles.

Sources:

  • The Associated Press with files from The Canadian Press
  • IEEPA (1977 International Emergency Economic Powers Act)