Trump's Tariff War: A Supreme Court Decision Looms

Strategic Insights -

The US President's latest trade tariff moves, imposed on Canada despite court rulings deeming them unlawful, have sparked concerns about the President's disregard for legal authority. The US Supreme Court is set to rule on the case next week, with most experts believing the President's case to be weak. If the court upholds the tariffs, it could have significant implications for global free trade and Canada's economy.

Key Takeaways:

  • The US Court of International Trade and a district court in Washington, D.C., have already ruled that Donald Trump had no authority to impose 10-per-cent tariffs on global imports, including those on Canada.
  • The US Court of Appeals upheld the CIT's decision, ruling that most of the tariffs were illegal because the International Emergency Economic Powers Act (IEEPA) granted no such tariff power.
  • A JPMorgan survey found that only 13% of experts think the US Supreme Court will uphold the tariffs, suggesting a strong likelihood of the President's case being overturned.
  • The US Supreme Court has a history of deferring to executive power on foreign affairs, which may influence the outcome of the case.
  • If the President loses, his legal team has several backup plans, including heading to Congress to pass legislation granting him expanded tariff power or invoking section 338 of the Smoot Hawley Tariff Act of 1930.
  • Treasury Secretary Scott Bessent has mentioned section 338 as a potential fallback option.
  • The Trump administration has also threatened to impose tariffs on Canada based on the Trade Expansion Act of 1962, citing national security concerns.

Statistics:

  • 10-per-cent tariffs on global imports imposed by Donald Trump.
  • 13% of experts believe the US Supreme Court will uphold the tariffs.
  • 3: the number of times the courts have ruled against the President's tariffs.
  • 2018: the year the President used the Trade Expansion Act to impose steel and aluminum tariffs on Canada and others.
  • 1930: the year the Smoot Hawley Tariff Act was passed, which includes section 338 that the Trump administration believes grants them tariff powers.
  • 2: the number of houses in which the President has a majority, making it possible for him to pass legislation granting him expanded tariff power.

Sources:

  • "The Globe and Mail" article: no date provided.
  • Cited court decisions:

+ US Court of International Trade (CIT) ruling.

+ District court in Washington, D.C. decision.

+ US Court of Appeals ruling.

  • JPMorgan survey cited by The Globe and Mail article.