Tariffs, tribunals and the trouble with American power

New Straits Times

2 days ago

YOU can tell a lot about a country not just by the wars it wages, but by the emergencies it declares, especially when those emergencies are economic, and the weapons of choice are tariffs.
That's what makes the recent US Court of International Trade (CIT) ruling so important and revealing. Because it didn't just m strike down President Trump's so-called "Liberation Day" tariffs; it struck at the very
foundation of how America has come to usem - and abuse - its economic power in a world that's watching closely.
Let's rewind. On April 2, 2025, the Trump administration announced a sweeping set of tariffs under the banner of a national emergency.
Ten per cent across the board. Twenty-five per cent on countries accused of failing to stop fentanyl. Thirty per cent on China, later hiked to 145 per cent.
It was aggressive. It was improvisational. And it was built on a fragile legal foundation: the International Emergency Economic Powers Act (IEEPA), a Cold War-era statute meant for rogue regimes and wartime exigencies, not for fighting trade deficits or playing tariff roulette with allies.
This past week, the courts called that bluff. In a unanimous decision - handed down by judges appointed by Reagan, Obama, and Trump - the CIT ruled that the president had overstepped the bounds of IEEPA.
The tariffs, they said, were not just broad - they were legally untethered, imposed with pretextual justifications and zero regard for the statute's intent.
And just like that, the gears of Trump's most audacious trade weapon ground to a halt.
But don't be fooled - this isn't just a procedural hiccup. It's a watershed moment in the tug-of-war between presidential power and institutional restraint.
The ruling didn't just say "no" to tariffs; it said "no" to using emergency powers as a shortcut around democracy. It reasserted something many in Washington have forgotten: that trade policy, like war, is meant to be anchored in congressional authority, not unilateral whim.
And yet, the game isn't over.
Trump's team, and the broader apparatus of economic nationalism, still has tools in its belt: Section 232 (national security tariffs) and Section 301 (retaliatory duties for unfair trade practices). These remain untouched by the court's ruling.
The problem? They're slower. They require public comment, investigation, deliberation - things this administration often sees as bugs, not features.
That's why IEEPA was so seductive. It let the White House move fast and break things. It let policy emerge from impulse, not process. But that same speed is what now exposes the fragility of the whole edifice.
Because when courts intervene, when lawsuits multiply - from states, importers, and even Native American tribes - what you're left with isn't just blocked tariffs.
You're left with uncertainty as policy. And uncertainty, as any economist will tell you, is its own kind of tax.
It's a tax on investment. A tax on supply chains. A tax on consumer confidence. You can see it in the numbers. US GDP shrank 0.3 per cent in the first quarter of 2025. Prices for fresh produce jumped 5.4 per cent. Apparel? Up 17 per cent.
Meanwhile, the Economic Policy Uncertainty Index has reached its highest levels since the early days of Covid.
When Macy's and Ford are pricing in policy chaos, and investors are bracing for legal whiplash, you don't have a trade strategy - you have a crisis of credibility.
And that credibility matters. Because while the administration scrambles to appeal the ruling, other governments - Japan, Germany, Brazil, even Canada - are drawing their own conclusions.
They see a country that can't guarantee the durability of its own trade rules from one quarter to the next. They see lawsuits in Florida, D.C., and New York battling over tariff legality, and wonder whether the US is still the anchor of the rules-based order - or just another actor improvising at scale.
Even within the US, the institutional reckoning has begun. Lawmakers like Republican Don Beyer and Republican. Suzan DelBene are introducing bills to claw back congressional authority over tariffs.
Legal scholars like George Mason's Ilya Somin are warning that no other statute offers the same unchecked reach as IEEPA - which is exactly why it was used in the first place. And trade policy veterans like Cato's Scott Lincicome are sighing with relief - if not certainty - now that at least
one court has stood up and said, "enough."
So where does this leave us?
It leaves us at a crossroads. One path leads toward a restoration of discipline and institutional integrity - where Congress reclaims its rightful role, and emergency laws are used for actual emergencies.
The other path leads deeper into the fog where executive power expands unchecked, and economic strategy becomes a rolling headline war fought through tweet, tariff, and tribunal.
Because in the end, this isn't just about trade. It's about how power is used in a democracy. It's about whether economic statecraft can be wielded responsibly in a multipolar world.
And it's about whether the United States still believes that credibility and coherence are strengths worth preserving.
Trump's tariffs may have been paused. But the bigger question - about how America governs its economy in an age of fragmentation - remains wide open.