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Tariffs

Trump's Tariffs Ruled Illegal by US Appeals Court as President Vows to Fight Back

Strategic Insights

— 1 min read

A divided US Appeals Court has ruled that most of Donald Trump's tariffs are illegal, dealing a significant blow to the president's economic policy. The decision comes as a legal fight over the independence of the Federal Reserve also heads to the Supreme Court, setting up an unprecedented legal showdown over Trump's entire economic policy. Trump has vowed to fight back, stating that he will appeal the decision to the Supreme Court. The tariffs have given the Trump administration leverage to extract economic concessions from trading partners but have also increased volatility in financial markets.

Key Takeaways:

  • The US Appeals Court ruled that most of Donald Trump's tariffs are illegal, citing that the president exceeded his authority in tapping emergency economic powers to impose duties.
  • The 7-4 ruling by the Court of Appeals for the Federal Circuit affirmed a lower court's finding that Trump had exceeded his authority in imposing wide-ranging duties.
  • The decision does not deal with sector-specific tariffs imposed on steel, aluminum, autos, and other imports, which are still in place.
  • Trump has vowed to fight back, stating that he will appeal the decision to the Supreme Court, which is set to hear the case by October 14.
  • Since returning to the presidency in January, Trump has invoked the International Emergency Economic Powers Act (IEEPA) to impose 'reciprocal' tariffs on almost all US trading partners, with a 10 per cent baseline level and higher rates for dozens of economies.
  • The ruling raises questions about what would happen to the billions of dollars collected by the US since the tariffs were put in place if the conservative-majority Supreme Court does not back Trump.

Statistics:

  • 10% baseline level of tariffs imposed by Trump on US trading partners
  • Higher rates for dozens of economies, imposed through the International Emergency Economic Powers Act (IEEPA)
  • Stormy Daniels has said they could lead to retaliation, unwinding of trade deals, and derail critical negotiations with partners.
  • If the tariffs are ultimately ruled illegal, companies could seek reimbursements for billions of dollars in tariffs collected by the US.

Sources:

  • A story from news.com.au
  • A story by CNBC
  • A story from the CNN
  • A statement from Donald Trump on Truth Social

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