Latest news with #WorldwideandRetaliatoryTariffs
Yahoo
29-05-2025
- Business
- Yahoo
Appeals court halts trade court's tariff injunction: What it means for freight
By Matthew Leffler The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. In a seismic ruling on Wednesday, the United States Court of International Trade (CIT) delivered a stinging defeat to President Donald Trump's aggressive tariff policies, striking down a series of import duties imposed under the International Emergency Economic Powers Act (IEEPA). The cases, V.O.S. Selections, Inc. v. United States and Oregon v. United States, challenged Trump's Worldwide, Retaliatory and Trafficking Tariffs, which slapped duties as high as 25% on goods from Canada, Mexico and China, and 10% globally. The CIT's decision, calling the tariffs an unconstitutional overreach, has sent shockwaves through the freight forwarding, trucking and logistics sectors. Here's what happened, why it matters and what's next for global trade. Since taking office in January, Trump has leaned heavily on tariffs to address trade deficits and drug trafficking, invoking IEEPA — a 1977 law granting presidents emergency economic powers — to bypass Congress. The Worldwide and Retaliatory Tariffs, rolled out via Executive Order 14257 in April, imposed a 10% duty on all imports, with higher rates (up to 50%) targeting 25 countries, including a tit-for-tat escalation with China peaking at 125% before settling at 20%. The Trafficking Tariffs, launched in February, hit Canada and Mexico with 25% duties and China with 20%, ostensibly to pressure those nations to curb drug tariffs disrupted supply chains, jacked up costs for importers and sparked fears of retaliatory trade barriers. V.O.S. Selections, a group of small businesses, and a coalition of 12 states led by Oregon, argued the tariffs were an illegal power grab, violating IEEPA's limits and Congress' exclusive authority over commerce under Article I of the Constitution. The CIT agreed, handing plaintiffs a clean sweep on summary judgment. The CIT's 49-page opinion, authored by a three-judge panel, dismantled the tariffs on two fronts. First, it ruled that the Worldwide and Retaliatory Tariffs, aimed at fixing trade deficits, fell under the Trade Act of 1974's Section 122, which caps tariffs at 15% for 150 days to address balance-of-payments issues. Trump's open-ended, globe-spanning duties blew past those limits, rendering them 'ultra vires' (beyond legal authority). The court noted that IEEPA, while allowing the president to 'regulate importation' during emergencies, doesn't override specific trade laws like Section 122, especially after Congress tightened IEEPA in 1977 to curb executive overreach. Second, the Trafficking Tariffs flunked IEEPA's requirement that actions 'deal with' an 'unusual and extraordinary threat' (50 U.S.C. § 1701). The court found the tariffs, which blanket entire economies rather than targeting trafficking networks, were more about creating 'leverage' than directly addressing the drug crisis. 'Customs's collection of tariffs on lawful imports does not evidently relate to foreign governments' efforts 'to arrest, seize, detain, or otherwise intercept' bad actors,' the court wrote, rejecting the government's argument that economic pressure alone satisfies IEEPA. Crucially, the CIT rejected the government's claim that the tariffs were immune from review under the political question doctrine. The court held that interpreting IEEPA's statutory limits is a judicial task, not a blank check for the president. Citing Youngstown Sheet & Tube Co. v. Sawyer (1952), the court emphasized that executive actions incompatible with Congress' will are at their 'lowest ebb' of freight forwarders, truckers and logistics providers, the ruling is a short-term win. The tariffs, which spiked costs for imported goods like Canadian potash, Mexican auto parts and Chinese electronics, strained cash flow for businesses like V.O.S. Selections, which reported reduced inventory and canceled orders. Genova Pipe, another plaintiff, faced higher raw material costs, while MicroKits warned it might shutter without relief. The CIT's permanent injunction, effective immediately, halts these duties, easing pressure on supply chains already battered by a protracted freight recession. But don't pop the champagne yet. The ruling invites appeal to the Federal Circuit and eventually the Supreme Court, where the administration could argue for broader IEEPA powers. Trump's trade team, led by U.S. Trade Representative Jamieson Greer, may also pivot to narrower tariff schemes under Section 301 or Section 232, which allow duties for unfair trade practices or national security threats but require rigorous investigations. Retaliatory tariffs from trading partners, like China's response to the Retaliatory Tariffs, could linger, complicating cross-border freight. The CIT's decision is a wake-up call for Trump's trade agenda. By leaning on IEEPA, the administration sidestepped the procedural hurdles of trade statutes, betting on emergency powers to reshape global commerce. The court's rebuke underscores that Congress, not the president, holds the reins on tariffs — a principle rooted in the Constitution's commerce clause. For shippers, the ruling means lower import costs for now, but vigilance is key. Canada and Mexico, vital U.S. trade partners under the United States-Mexico-Canada Agreement, may push for exemptions or trade concessions, impacting trucking routes and border wait times. China's role as a manufacturing hub ensures its goods will remain a flashpoint, with or without tariffs. Freight forwarders should brace for volatility as the administration recalibrates. Longer term, the case could prompt Congress to tighten IEEPA further, echoing post-Watergate reforms that curbed executive power. Until then, the freight industry must navigate a trade landscape where legal battles are as critical as load boards. As one plaintiff, Terry Cycling, put it, these tariffs cost them $25,000 in unplanned duties this year alone. For an industry running on thin margins, that's a hit nobody can afford. On May 29, 2025, the United States Court of Appeals for the Federal Circuit issued a nonprecedential order consolidating two appeals from the United States Court of International Trade, where judgments were entered against the United States. The Federal Circuit granted the United States' motion to consolidate the appeals, requiring a single set of briefs, and issued a temporary administrative stay of the Court of International Trade's judgments and injunctions pending further consideration of the United States' stay motions. Looks like tariffs are back on the menu. The plaintiffs were directed to respond to the stay motions by June 5, 2025, with the United States permitted to file a consolidated reply by June 9, 2025, and the parties were instructed to inform the court of any actions taken by the Court of International Trade regarding the pending stay motions. Make no mistake, the outcome of this case will be decided before the Supreme Court of the United States. This is a (quickly) developing case. Matthew Leffler is a trucking industry expert and an adjunct professor of law at Michigan State University College of Law. He can be reached at matthew@ faces federal lawsuit over broker transparency dispute The courts are unlikely to end the trade war Court blocks Trump's 'Liberation Day' tariffs, calls them unconstitutional The post Appeals court halts trade court's tariff injunction: What it means for freight appeared first on FreightWaves.
Yahoo
29-05-2025
- Business
- Yahoo
A telling judicial rebuke of Trump's tariffs – from another Trump appointee
The biggest story of President Donald Trump's second term thus far is his going to great lengths to expand his own power – and daring Congress, the courts and anyone else to stand in his way. Those who do so are labeled usurpers. But the sheer brazenness of Trump's power grabs has steadily come into focus via a stream of major judicial rebukes. And it's not just the language of the decisions that looms large; it's also the sources. Even several judges appointed by Trump himself have now ruled he and his administration have gone too far, too fast. It's a list that keeps growing. That makes it increasingly difficult for the administration to continue arguing that the adverse rulings are truly about the judiciary's overreach – as opposed to its own. A case in point is Wednesday's ruling by the US Court of International Trade striking down many of Trump's most significant tariffs. The ruling is one of the most significant yet, halting a centerpiece of both Trump's economic and foreign policy agendas. The unanimous three-judge panel ruled that Trump exceeded his authority by effectively treating Congress's granting of certain tariff authorities as carte blanche to do whatever he wanted. (The administration quickly appealed, and the issue could be headed to the Supreme Court.) And some of the language is pretty stark. The case deals with Trump's use of the International Emergency Economic Powers Act (IEEPA) of 1977. The act allows the president to levy tariffs 'to deal with any unusual and extraordinary threat' emanating from outside the country 'to the national security, foreign policy, or economy of the United States.' Trump has declared national emergencies related to drugs and crime, as well as persistent trade deficits with other countries. He has sought to use those declarations to justify tariffs on Canada, China and Mexico, as well as the global tariffs he announced on what the administration deemed 'Liberation Day' last month. But the three-judge panel said the IEEPA 'does not authorize anything as unbounded as the Worldwide and Retaliatory Tariffs.' It said that 'such a reading would create an unconstitutional delegation of power.' The panel said tariffs were not a valid method to 'deal with' the threats Trump cited, because creating leverage over other countries doesn't directly address drug trafficking. (In a rather dryly worded footnote, the judges noted that the tariffs 'do not change the effective rate of duty' – i.e. 0 percent – 'for smuggled drugs themselves.') And it rejected the administration's argument that the courts couldn't question Trump's emergency declarations, saying a provision in the law that limits a president's tariff authority 'is not a symbolic festoon.' The White House responded to the major setback with familiar talking points. They took aim at the actions of 'unelected judges,' asserting they shouldn't be able to question Trump's foreign policy actions. Top White House adviser Stephen Miller added on X: 'The judicial coup is out of control.' But yet again, the ruling included none other than a judge appointed by Trump. Trump first nominated Timothy Reif to the federal trade court back in 2018. Reif joined in the unanimous opinion – along with judges appointed by former Presidents Barack Obama and Ronald Reagan. There is some nuance here. Trump allies note that Reif was a Democrat who served in the Obama administration. (Trump had to nominate a Democrat, given the court is capped at five appointees from one party or another.) But Reif was also a political appointee in the Trump administration, serving as a senior advisor under then-U.S. Trade Representative Robert Lighthizer before his nomination to the federal trade court. Indeed, his decision to serve in the Trump administration reportedly caught allies off guard, as the Daily Beast reported in 2017. The Wall Street Journal described Reif as 'a Democrat with a reputation as a protectionist,' which would suggest he could be sympathetic to Trump's trade policies and tariffs. (One of Trump's top trade advisers, Peter Navarro, is also a protectionist former Democrat.) In sum, this is a vote that the administration would certainly prefer not to lose – especially given his vote wasn't even necessary for the court's majority. But this is becoming a familiar tale. Repeatedly and increasingly, Trump-appointed judges have said the administration is grabbing too much power. Earlier this week, a Trump-appointed US district judge in New York, Lewis J. Liman, blocked the administration's attempts to thwart New York City's congestion pricing program. He said the administration's policy 'undermines the authority of a sovereign state to authorize policy decided on by its elected representatives.' Last month, another Trump-appointed US district judge, Stephanie A. Gallagher, ruled the administration had wrongly deported a man and had to 'facilitate' his return. Another, Trevor McFadden, ruled the administration had unconstitutionally retaliated against the Associated Press by barring it from White House events, calling US officials' actions 'brazen.' Yet another, Fernando Rodriguez Jr., in recent weeks became the first district judge to fully reject the administration's use of the Alien Enemies Act for rapid deportations. Another, Stephanie Haines, said the administration could use the Alien Enemies Act. But she sharply undercut its utility by saying the administration hadn't provided migrants enough time to challenge their deportations. The judge required they give 21 days. And then there is, of course, the Supreme Court. Each of Trump's three appointees to that court – Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett – has declined to dissent when the court sought to check Trump's deportation powers. It's actually been the other conservative justices, the ones appointed by Republican presidents before Trump, who have been more amenable to the administration's actions. (The Supreme Court sometimes issues rapid orders that don't denote who voted which way, but justices can note when they dissent.) It's somewhat fraught to focus too intensely on which president nominated a judge who issues a major decision. Federal judges, with the insulation of a lifetime appointment, are supposed to interpret the law without regard to politics. But it says a lot that the people Trump has seen fit to appoint to such important roles have increasingly thwarted some of his boldest moves. That speaks to just how far he's pushed the envelope in challenging the limits of his power.
