Major setback for Trump as U.S. court blocks tariffs

The Hindu

a day ago

A U.S. federal court has blocked most of President Donald Trump's sweeping tariffs, boosting markets on Thursday with a ruling that could derail his trade strategy. The three-judge Court of International Trade, in two separate cases, ruled on Wednesday that Mr. Trump had overstepped his authority, and barred most of the import duties announced since he took office in January, including the 'Liberation Day' tariffs announced on April 2. The judges said the cases rested on whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegate such powers to the President 'in the form of authority to impose unlimited tariffs on goods from nearly every country in the world'. 'The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,' the ruling said. Attorneys for the Trump administration promptly filed an appeal against the ruling, which gave the White House 10 days to complete the bureaucratic process of halting the tariffs. The White House called the ruling 'blatantly wrong,' expressing confidence that the decision would be overturned. White House spokesperson Karoline Leavitt told presspersons that the judges 'brazenly abused their judicial power to usurp the authority of President Trump.' The White House also said that top U.S. officials have been in touch with their counterparts in other countries to discuss Wednesday's ruling. The ruling marks a significant setback to Mr. Trump as he bids to redraw the U.S. trading relationship with the world by forcing governments to the negotiating table through tough new tariffs. Mr. Trump had argued that the U.S.'s trade deficits and the threat posed by the influx of drugs constituted a 'national emergency' that justified widespread tariffs. The federal trade court was ruling in two separate cases — brought by businesses and a coalition of State governments — arguing that the President had violated Congress's power of the purse. The judges stated that any interpretation of the IEEPA that 'delegates unlimited tariff authority is unconstitutional'. 'It is not for unelected judges to decide how to properly address a national emergency,' White House spokesman Kush Desai said in a statement. 'President Trump pledged to put America first, and the administration is committed to using every lever of executive power to address this crisis and restore American greatness,' Mr. Desai said.
The ruling comes as Mr. Trump was using the tariffs as leverage in trade negotiations with friends and foes, including the European Union and China. Beijing, which was hit by 145% tariffs before they were sharply reduced to give space for negotiations, reacted to the court ruling by saying the U.S. should scrap the levies. Mr. Trump unveiled sweeping import duties on nearly all trading partners on April 2, at a baseline 10%, plus steeper levies on dozens of economies, including China and the EU. The U.S. court's ruling also quashes duties that Mr. Trump imposed on Canada, Mexico and China separately using emergency powers. Asian markets rallied on Thursday and U.S. futures pointed to early gains, but Europe was mixed, with London in the red while Paris and Frankfurt rose. The Indian government is assessing the potential impact of the U.S. court's ruling that blocked the sweeping tariffs imposed by President Trump, according to government sources. They added that talks for India-U.S. free trade agreement were 'progressing well'. The sources confirmed the U.S. team of negotiators for the ongoing India-U.S. Free Trade Agreement discussions would be in India on June 5-6. Indian delegation, under Commerce and Industry Ministry Piyush Goyal, returned from week-long trip to U.S. last week. Trade experts said India must use the opportunity provided by the U.S. court decision to pause and reassess strategy in FTA talks.
The Hindu's Editorials
The Hindu's Daily Quiz
At which university has the Trump administration sought to ban the enrolment of international students
Stanford
Harvard
Columbia
Princeton
To know the answer and to play the full quiz, click here.