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Tariffs

Trump's Tariffs Ruled Illegal by US Appeals Court in Blow to Economic Policy

Strategic Insights

— 2 min read

A US appeals court has struck down most of President Donald Trump's tariffs, dealing a significant blow to his economic policy and setting up an unprecedented showdown with the Supreme Court. The court allowed the tariffs to remain in place until October 14 to give the Trump administration a chance to appeal. Trump has made tariffs a key part of his foreign policy, using them to exert pressure and renegotiate trade deals, but the decision has increased uncertainty in financial markets and leaves the future of his trade war with China, Canada, and Mexico uncertain.

Key Takeaways:

  • The US Court of Appeals for the Federal Circuit ruled 7-4 that most of Trump's tariffs are illegal, citing the International Emergency Economic Powers Act (IEEPA) as the basis for the decision.
  • The court allowed the tariffs to remain in place until October 14 to give the Trump administration a chance to appeal to the Supreme Court.
  • Trump has argued that the tariffs are necessary to address trade imbalances and declining US manufacturing power, but the court said the law does not explicitly give the president the power to impose tariffs.
  • The decision does not impact tariffs imposed under other legal authority, such as Trump's tariffs on steel and aluminum imports.
  • The Trump administration has argued that IEEPA gives the president the power to regulate imports or block them completely, but the court disagreed.
  • The ruling is part of an ongoing legal fight over the independence of the Federal Reserve and Trump's entire economic policy, which is set to go to the Supreme Court.
  • The decision increases uncertainty in financial markets and leaves the future of Trump's trade war with China, Canada, and Mexico uncertain.

Statistics:

  • 7-4: The margin of the appeals court decision striking down most of Trump's tariffs.
  • October 14: The deadline for the Trump administration to file an appeal with the Supreme Court to keep the tariffs in place.
  • 9-0: The number of judges on the US Court of Appeals for the Federal Circuit who voted against the Trump administration's argument that IEEPA gives the president the power to impose tariffs.
  • 5 small US businesses: The number of plaintiffs that brought one of the lawsuits challenging Trump's tariff policies.
  • 12 Democratic-led US states: The number of plaintiffs that brought another lawsuit challenging Trump's tariff policies.

Sources:

  • Wall Street Journal, "Appeals Court Invalidates Trump's Tariffs"
  • Reuters, "US appeals court upholds invalidation of Trump's tariffs"
  • Bloomberg, "Trump's Tariffs Struck Down by Appeals Court, Probably"

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