US trade court blocks Trump's tariffs, cites he exceeded powers

Qatar Tribune

2 days ago

Agencies
A U.S. trade court blocked most of President Donald Trump's tariffs in a ruling Wednesday that found the president overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners.
The news boosted markets on Thursday, even as the White House appealed against the decision by 'unelected judges.' The Court of International Trade said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the U.S. economy.
It said that the court does not read the International Emergency Economic Powers Act (IEEPA) to confer such 'unbounded authority.' 'The court does not pass upon the wisdom or likely effectiveness of the president's use of tariffs as leverage,' a three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January. 'That use is impermissible not because it is unwise or ineffective, but because federal law does not allow it.' This opinion marks a significant setback for Trump as he bids to redraw the U.S. trade relationship with the world by forcing governments to negotiate at the table through tough new tariffs.
Trump's global trade war has roiled financial markets with a stop-start rollout of import levies to punish economies that sell more to the U.S. than they buy.
Trump argued that the resulting trade deficits and the threat posed by the influx of drugs constituted a 'national emergency' that justified widespread tariffs.
But the three-judge Court of International Trade ruled that Trump had overstepped his authority, barring most of the restrictions announced since he took office in January.
The White House slammed the ruling, arguing that 'unelected judges' have no right to weigh in on Trump's handling of the issue.
'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,' Trump's spokesperson, Kush Desai, said.
Attorneys for the Trump administration promptly filed to appeal against the ruling on Wednesday.
One of Trump's closest White House aides, Stephen Miller, took to social media to decry a 'judicial coup' that he said was 'out of control.' Trump unveiled sweeping import duties on most trading partners on April 2, at a baseline 10% plus steeper levies on dozens of economies, including China and the European Union.
The ruling also quashes duties that Trump imposed on Canada, Mexico and China separately using emergency powers.
Some of the turmoil was calmed after he paused the larger tariffs for 90 days and suspended other duties, pending negotiations with individual countries and blocs.
Asian markets rallied on Thursday after the ruling, while European and U.S. futures also pointed to early gains. Japan's tariffs envoy Ryosei Akazawa said as he left for a fourth round of talks in Washington that Tokyo – reeling from tariffs on cars – would study the ruling.
The judges also ordered the Trump administration to issue new orders reflecting the permanent injunction within 10 days. The Trump administration, minutes later, filed a notice of appeal and questioned the authority of the court.
The court invalidated with immediate effect all of Trump's orders on tariffs since January that were rooted in the IEEPA, a law meant to address 'unusual and extraordinary' threats during a national emergency.
The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminum, using a different statute.
The decisions of the Manhattan-based Court of International Trade, which hears disputes involving international trade and customs laws, can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately the U.S. Supreme Court.
The federal trade court ruled 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 question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 (IEEPA) delegates these powers to the president in the form of authority to impose unlimited tariffs on goods from nearly every country in the world,' the three-judge panel wrote in an unsigned opinion.
'The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.' The court, which adjudicates civil cases arising from trade disputes, said that any interpretation of the IEEPA that 'delegates unlimited tariff authority is unconstitutional,' according to court documents.
The IEEPA authorizes the president to impose necessary economic sanctions during an emergency 'to combat an unusual and extraordinary threat,' the bench said.The ruling gave the White House 10 days to complete the bureaucratic process of halting the tariffs.
Gregory W. Meeks, the top Democrat on the House Foreign Affairs Committee, said the ruling confirmed that 'these tariffs are an illegal abuse of executive power.' 'Trump's declaration of a bogus national emergency to justify his global trade war was an absurd and unlawful use of IEEPA,' he said.
The Justice Department has defended Trump's trade strategy in court, insisting that the judiciary has very limited authority over his actions and sparking criticism that the White House was attempting to usurp the power of the other branches of government.
Trump has claimed that Americans will reap the benefits of his trade posture, pointing to early successes in deals struck with the U.K. and with China, the world's second-largest economy.
However, analysts warned that the cost of the tariffs will likely be passed on to U.S. consumers, raising inflation and potentially leading the U.S. central bank to hold interest rates higher for longer, further affecting financial markets.
Companies of all sizes have been whipsawed by Trump's swift imposition of tariffs and sudden reversals as they seek to manage supply chains, production, staffing and prices.
If it stands, the ruling blows a giant hole through Trump's strategy to use steep tariffs to wring concessions from trading partners. It creates deep uncertainty around multiple simultaneous negotiations with the EU, China and many other countries.
However, analysts at Goldman Sachs noted the order does not block sector-specific levies and there were other legal avenues for Trump to impose across-the-board and country-specific tariffs.