Latest news with #TradingwiththeEnemyAct
Yahoo
2 days ago
- Business
- Yahoo
The ‘major questions' Supreme Court hurdle that could stand in the way of Trump's tariffs
Are President Trump's global tariffs of "vast economic and political significance?" The answer could make or break the administration's chance to keep the president's 'Liberation Day' tariffs in force as legal challengers try to undo them — especially if the dispute eventually reaches the Supreme Court. The nation's highest court has made it clear in recent years that it is willing to apply a test known as the "major questions doctrine" to reign in the executive branch from usurping power vested in Congress. That doctrine, solidified with the help of Trump's hand-picked conservative judges, limits the authority of federal agencies to take action on issues of "vast economic and political significance" except where Congress has explicitly authorized the action. It got a formal nod from the high court in two cases that were decided against President Biden during his time in office. And now it could become a hurdle for the current president if the current lower court fight over Trump's duties reaches the Supreme Court, as expected. Last week the US Court of International Trade in New York City struck down many of Trump's tariffs, but the US Court of Appeals for the Federal Circuit in Washington, D.C., on Thursday allowed Trump's duties to temporarily stay in place while legal arguments continue. Judges considering the "major questions doctrine" will have to decide if any president can unilaterally levy import duties to address conditions that the president characterizes as a US emergency — as Trump has cited as justification for many of his duties. Read more: What Trump's tariffs mean for the economy and your wallet The administration is arguing that the major questions doctrine is irrelevant to matters of national security concern where a president has extreme flexibility to exert power. It has also argued that it limits actions taken by federal agencies and not actions of the president. Trump specifically cited the International Emergency Economic Powers Act of 1977 (IEEPA) as authority for many of his tariffs. That law states that during a national emergency, the president can regulate economic transactions, including imports, in order to respond to an 'unusual and extraordinary threat' from abroad. Congress passed the IEEPA to restrict presidents from overstepping a 1917 World War I-era law known as the Trading with the Enemy Act (TWEA). The act, which regulates US transactions with enemy powers, allowed the president to exercise broad economic power during wartime and during national emergencies. The president cited IEEPA in an executive order issued Feb. 1 when he imposed tariffs on China, Mexico, and Canada by declaring that an influx of illegal immigration and drugs into the country posed a national emergency. Trump also cited the law on April 2, so-called "Liberation Day," when he announced "reciprocal" tariffs on many countries around the world. Read more: The latest news and updates on Trump's tariffs University of California Davis constitutional law professor Aaron Tang called the tariffs a textbook case for application of the major questions doctrine. 'IEEPA has never [been] used before to impose tariffs,' Tang said. 'So if the doctrine means anything, and if it applies neutrally, no matter who the president is, it will apply here.' It's possible, though unlikely, that a court could avoid the major questions doctrine in deciding the challenger's claims, Tang said. But to rule in Trump's favor, he said, judges would have to grapple with it to explain why it doesn't apply, or is satisfied, given that the US economy is at stake. 'The tariffs are way more economically significant than any of the Biden administration policies,' he said. In 2022, the Supreme Court used the major questions doctrine to find that Biden's EPA lacked clear congressional authorization to regulate certain greenhouse gas emissions, in a 6-3 ruling dominated by the court's conservative majority. A year later, the court held that Biden's Secretary of Education lacked clear authority under the HEROES Act to forgive $400 billion in student loan debt. Like the EPA case, the court said Biden's debt relief regulation was so major that it would need explicit authorization from Congress. 'President Biden and his administration took these really bold actions,' Tang said. 'The Trump administration, just like the Biden administration, has said, 'I'm just going to do it all by myself.'' Trump's challengers, he added, have a 'very strong argument' that the duties are not authorized by Congress. Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed. Click here for political news related to business and money policies that will shape tomorrow's stock prices
Yahoo
2 days ago
- Business
- Yahoo
The ‘major questions' Supreme Court hurdle that could stand in the way of Trump's tariffs
Are President Trump's global tariffs of "vast economic and political significance?" The answer could make or break the administration's chance to keep the president's 'Liberation Day' tariffs in force as legal challengers try to undo them — especially if the dispute eventually reaches the Supreme Court. The nation's highest court has made it clear in recent years that it is willing to apply a test known as the "major questions doctrine" to reign in the executive branch from usurping power vested in Congress. That doctrine, solidified with the help of Trump's hand-picked conservative judges, limits the authority of federal agencies to take action on issues of "vast economic and political significance" except where Congress has explicitly authorized the action. It got a formal nod from the high court in two cases that were decided against President Biden during his time in office. And now it could become a hurdle for the current president if the current lower court fight over Trump's duties reaches the Supreme Court, as expected. Last week the US Court of International Trade in New York City struck down many of Trump's tariffs, but the US Court of Appeals for the Federal Circuit in Washington, D.C., on Thursday allowed Trump's duties to temporarily stay in place while legal arguments continue. Judges considering the "major questions doctrine" will have to decide if any president can unilaterally levy import duties to address conditions that the president characterizes as a US emergency — as Trump has cited as justification for many of his duties. Read more: What Trump's tariffs mean for the economy and your wallet The administration is arguing that the major questions doctrine is irrelevant to matters of national security concern where a president has extreme flexibility to exert power. It has also argued that it limits actions taken by federal agencies and not actions of the president. Trump specifically cited the International Emergency Economic Powers Act of 1977 (IEEPA) as authority for many of his tariffs. That law states that during a national emergency, the president can regulate economic transactions, including imports, in order to respond to an 'unusual and extraordinary threat' from abroad. Congress passed the IEEPA to restrict presidents from overstepping a 1917 World War I-era law known as the Trading with the Enemy Act (TWEA). The act, which regulates US transactions with enemy powers, allowed the president to exercise broad economic power during wartime and during national emergencies. The president cited IEEPA in an executive order issued Feb. 1 when he imposed tariffs on China, Mexico, and Canada by declaring that an influx of illegal immigration and drugs into the country posed a national emergency. Trump also cited the law on April 2, so-called "Liberation Day," when he announced "reciprocal" tariffs on many countries around the world. Read more: The latest news and updates on Trump's tariffs University of California Davis constitutional law professor Aaron Tang called the tariffs a textbook case for application of the major questions doctrine. 'IEEPA has never [been] used before to impose tariffs,' Tang said. 'So if the doctrine means anything, and if it applies neutrally, no matter who the president is, it will apply here.' It's possible, though unlikely, that a court could avoid the major questions doctrine in deciding the challenger's claims, Tang said. But to rule in Trump's favor, he said, judges would have to grapple with it to explain why it doesn't apply, or is satisfied, given that the US economy is at stake. 'The tariffs are way more economically significant than any of the Biden administration policies,' he said. In 2022, the Supreme Court used the major questions doctrine to find that Biden's EPA lacked clear congressional authorization to regulate certain greenhouse gas emissions, in a 6-3 ruling dominated by the court's conservative majority. A year later, the court held that Biden's Secretary of Education lacked clear authority under the HEROES Act to forgive $400 billion in student loan debt. Like the EPA case, the court said Biden's debt relief regulation was so major that it would need explicit authorization from Congress. 'President Biden and his administration took these really bold actions,' Tang said. 'The Trump administration, just like the Biden administration, has said, 'I'm just going to do it all by myself.'' Trump's challengers, he added, have a 'very strong argument' that the duties are not authorized by Congress. Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on X @alexiskweed. Click here for political news related to business and money policies that will shape tomorrow's stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
3 days ago
- Business
- Mint
Where the trade court's tariff decision went wrong
President Donald Trump announces tariffs in the Rose Garden at the White House in Washington, April 2. During a national crisis, an advocate of tariffs testified before Congress that 'reciprocal trade agreements" push foreign nations to stop erecting 'excessive economic barriers to trade." Who said this? President Trump? Sen. Reed Smoot or Rep. Willis Hawley? It was President Franklin D. Roosevelt's secretary of state, Cordell Hull, explaining in 1940 how reciprocal tariffs could reverse unfair trade practices targeting the U.S. Mr. Trump's policy of using reciprocal tariffs to advance U.S. interests isn't a new or radical idea, and it's a necessary one. The U.S. Court of International Trade was wrong to rule on Wednesday that the administration had exceeded its authority in imposing these tariffs. The ruling overlooked history, statute, precedent and national interest. It was a misreading of the International Emergency Economic Powers Act, or IEEPA, and a misinterpretation of America's bipartisan tradition of using trade policy to defend national economic resilience. On Thursday, the U.S. Court of Appeals for the Federal Circuit stayed the trade court's ruling while it considers an appeal. In a separate case, a district judge in Washington issued an injunction against the tariffs, although he stayed his own order. The issue requires resolution only the Supreme Court can deliver. Americans should hope the justices side with Mr. Trump. In its May 28 decision, V.O.S. Selections v. U.S., the trade court held that IEEPA doesn't authorize the president to impose 'unbounded" tariffs. The opinion misses the mark on legal and historical fronts. It substitutes policy skepticism for statutory interpretation, undermining legitimate executive authority during declared national emergencies. The trade court's reading of IEEPA contradicts the statute's text and history. IEEPA's independent emergency authority allows the president to regulate, prevent or prohibit the importation of property in which foreign countries or nationals have an interest. The language mirrors that of the earlier Trading with the Enemy Act, which President Richard Nixon used to impose a universal 10% tariff in 1971. The courts upheld Nixon's use of that power in U.S. v. Yoshida International (1975), concluding that tariffs were a sensible approach to regulating imports during a declared emergency. Congress enacted IEEPA in 1977 with language directly drawn from the Trading with the Enemy Act. The trade court's description of the tariffs as 'unbounded" also contradicts Mr. Trump's painstakingly specific April 2 executive order, which imposes precise duties, product exemptions and country-specific rates. I should know: I helped coordinate their implementation. Further, the court errs in implicitly inviting itself to review the sufficiency of the president's emergency declaration. IEEPA requires only that the president declare a national emergency 'to deal with an unusual and extraordinary threat" arising outside the U.S., which is exactly what the executive order does. Trade deficits can qualify as emergencies. In the Trade Act of 1974, Congress recognized that 'large and serious" balance-of-payments deficits could justify swift presidential action, including tariffs and quotas. This act's unique procedures didn't preclude similar IEEPA authorities addressing identical threats. Second-guessing presidential responses to emergencies defies precedent. In Dames & Moore v. Regan (1981), the Supreme Court acknowledged the validity of President Jimmy Carter's hostage crisis response, intact to this day, which froze Iranian property in the U.S. Courts have long held that the political branches—not judges—determine how to deal with foreign economic threats that rise to emergency levels. Further, in Field v. Clark (1892), the justices held that 'it is often desirable, if not essential . . . to invest the President with large discretion in matters arising out of the execution of statutes relating to trade and commerce with other nations." While IEEPA gives the president significant latitude, Congress can terminate a national emergency by joint resolution. That Congress hasn't thwarted Mr. Trump's tariffs counsels restraint in questioning his decision. The trade court evidently yearns to restore misguided economic orthodoxy. But frictionless global trade remains a mirage. Even John Maynard Keynes, hardly an economic nationalist, cautioned against the utopian allure of borderless commerce: 'Let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national." The pursuit of a perfectly undistorted global market ignores American history and legal tradition. Hull's reciprocal-tariff program of the 1930s—the foundation of U.S. multilateral trade—was premised on the imposition of duties on imports from countries that refused to lower theirs. Hull understood that economic resets require leverage. The test of judicial reasoning is whether it honors the text, structure and history of the law it interprets. The Court of International Trade fell short of that test. Mr. Bogden is a fellow at the Steamboat Institute and a former clerk for the U.S. Court of International Trade.
Time of India
29-05-2025
- Business
- Time of India
What happens to Trump's tariffs now that a court has ruled against them?
A federal court in New York dealt a major blow to US President Donald Trump on Wednesday, blocking his sweeping plan to impose hefty tariffs on imports from nearly every country in the world. A three-judge panel of the U.S. Court of International Trade ruled that Trump exceeded his authority when he used the 1977 International Emergency Economic Powers Act (IEEPA) to declare a national emergency and justify the wide-ranging levies. The tariffs — which reached as high as 50% on countries with U.S. trade deficits and 10% on others — had disrupted global commerce, unnerved financial markets, and sparked concerns about inflation and recession both in the U.S. and globally, AP reported. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo What did the court say? The court's ruling invalidates the tariffs Trump imposed last month on nearly all trading partners, as well as earlier levies on China, Mexico, and Canada. However, other Trump-era tariffs, such as those on steel, aluminum, and autos, remain intact since they were enacted under a different statute that requires a Commerce Department investigation. According to AP, the court consolidated two of the at least seven lawsuits filed against the tariffs — one by five small businesses and another by 12 U.S. states. The ruling emphasized that longstanding trade deficits do not constitute a sudden emergency and noted that the tariffs did little to address the issues they were meant to fix. Live Events Trump's reciprocal tariffs Trump had invoked the IEEPA in April to impose "reciprocal" tariffs, claiming that persistent trade imbalances amounted to a national emergency. In February, he had used the same law to justify duties on Canada, Mexico, and China, citing illegal immigration and drug trafficking as threats. The U.S. Constitution grants Congress the power to set tariffs, but lawmakers have long ceded increasing authority to the executive branch. Trump's use of emergency powers to unilaterally impose tariffs tested the limits of that authority, AP noted. Trump admin on tariffs The administration had argued that similar emergency powers had been used by President Richard Nixon in the 1970s under the earlier Trading with the Enemy Act. But the court rejected the comparison, finding Trump's tariffs too sweeping and disconnected from the issues they were purportedly meant to address. Trump's policy into turmoil Wendy Cutler, a former U.S. trade negotiator and vice president at the Asia Society Policy Institute, told AP the decision 'throws the president's trade policy into turmoil.' 'Partners negotiating hard during the 90-day tariff pause may be tempted to hold off making further concessions to the U.S. until there is more legal clarity,' Cutler said. Businesses, too, may adjust their operations and supply chains in anticipation of potential reinstatement should the administration appeal. The court's decision can be challenged in the U.S. Court of Appeals for the Federal Circuit and potentially reach the Supreme Court. Eswar Prasad, a trade policy professor at Cornell University, told AP that the ruling undermines the Trump administration's core justification for using emergency powers to impose tariffs. 'The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power,' Prasad said. While the ruling limits Trump's use of the IEEPA, the court noted he still retains narrower tariff authority under the 1974 Trade Act — but only up to 15% and for no longer than 150 days.
