Who'll draw first blood in the tariff wars: Trump or the US courts?

Independent

2 days ago

If there was one difference between Donald Trump 's first term in the White House and his second, it was said to be his lessons learned. Nowhere was this more apparent than in the speed of his appointments and the torrent of executive orders he issued in his first hours.
Trump's brazen demonstration of executive power seemed at odds with everything most people learn about US democracy as being a system of checks and balances designed also to rein in presidential excess. But it met with little challenge – unlike in his first term.
Something similar applied to the appearance of the unelected billionaire tech CEO Elon Musk as head of a new Department of Government Efficiency (DOGE) to scythe through whatever he might define as waste and impediments to getting the presidential job done.
Suddenly, with yesterday's ruling from the US Federal Court of Trade, rejecting Trump's imposition of new trade tariffs, and Musk's announcement that he has l eft the administration, the Trump system, such as it was, seems in disarray more profound than his usual impression of chaos. Whether these developments mean that Trumpism 2.0 has hit its limits is another matter.
The ruling is the move that will have the greatest immediate impact, although one that is largely interim as Trump is set to appeal, precipitating an eventual showdown at the US Supreme Court. In the meantime, the status of the tariff increases unilaterally announced by Trump on 2 April, what he called 'Liberation Day', remains uncertain, along with the various compromise agreements reached by some – including by the UK – and under negotiation by others, including the EU.
Having upended the global trading system once, with dramatic effects on international markets that have largely been weathered, Trump will have few qualms about further disruption, not least because his comprehensive re-ordering of tariffs remains a cornerstone of his economic policy and enjoys wide popularity among his voters.
Those trading with the US have little choice but to sit tight and let the US constitutional system take its course. Some, with the capacity to do so, rushed to export goods to the US under the old rules, but others either lacked the capacity or were not so lucky. For the time being, it is probably reasonable to conclude that a large part of the international trading system is on hold.
As for the likely outcome, it is hard to envisage a victory for Trump, if not impossible. Two groups brought cases in the Trade Court: an independent group called the Liberty Justice Center made representations on behalf of small importers and a group of state governors claimed their states' interests had been damaged, with a three-person tribunal finding that Trump had misused a declaration of emergency to alter tariff arrangements essentially by decree, without consideration, as would otherwise be required, by the US Congress.
The Supreme Court will have to judge whether there were grounds for declaring an emergency, and, even if there were, whether that gave him the power to override Congress. The Supreme Court – perhaps, but not entirely, out of self-interest – is seen as preferring to uphold rather than weaken the system of checks and balances, which would tend to suggest a Trump defeat. However, nothing can be ruled out.
More surprising perhaps is that it has taken four months and resorting to a specialist federal court to cause Trump's first second-term stumble. In his first term, practically every move he made encountered resistance, whether from Congress, the courts, or street protests. Or, in the case of his foreign policy, the 'Russia-gate' claims of collusion with the Kremlin.
This time around the balance of power in Washington is different. There is the weakness of the Democrats following Kamala Harris 's defeat and now embroiled in recriminations over Joe Biden's fitness for office, the fact that Republicans narrowly control both Houses of Congress, Trump's clear electoral mandate, and the early dismissals he authorised in the FBI and other departments that had stymied him the first time around.
The departure of Elon Musk may be seen as having far less of an impact on the administration than the possible enforced reversal of Trump's trade tariffs. After all, it was evident practically from day one that the White House could not be big enough for both of them.
It could also be argued that Musk has already had an outsized influence and not just in the Trump White House. The enthusiasm with which he set about slashing government departments, abolishing diversity measures, and government-funded operations such as USAID, delighted Trump supporters but also gave the voting public in many other countries new ideas about what might be feasible.
If Trump loses his tariff battle in the courts it is Musk's brief and constitutionally questionable tenure at the White House that could have a farther-reaching legacy.