Latest news with #court ruling
Al Arabiya
3 days ago
- Business
- Al Arabiya
What comes next in Trump's legal battle over tariffs?
A US federal appeals court has temporarily halted a ruling that found many of President Donald Trump's tariffs illegal, but the chance it could ultimately back the original decision looms over the White House. What is in the US Court of International Trade's original ruling—which the Trump administration is appealing—and what options does the administration have? Which tariffs were affected? The three-judge trade court ruled Wednesday that Trump overstepped his authority in imposing blanket tariffs by invoking emergency economic powers. The judgment—although temporarily halted—affected levies unveiled on April 2, which involve a 10 percent tariff on most trading partners and higher rates on dozens of economies including China and the European Union. These higher levels are currently suspended while negotiations take place. The ruling also applies to tariffs imposed on Canada, Mexico, and China over their alleged roles in allowing an influx of drugs into the United States. But it left intact sector-specific levies like those on steel, aluminum, and auto imports. Why a pause? The ruling by the little-known court, which has nationwide jurisdiction over tariff and trade disputes, initially gave the White House 10 days to complete the process of unwinding the levies. But the US Court of Appeals for the Federal Circuit on Thursday granted a temporary stay 'until further notice' while the Trump administration's appeals process plays out. This means the tariffs can remain in effect for now, while a longer-term outcome is yet to be determined. National Economic Council Director Kevin Hassett told Fox News the administration is 'very pleased with the ruling,' dubbing it a victory. What are Trump's alternatives? The appeals court could eventually uphold the trade court's original decision to block Trump's sweeping tariffs. The president, however, has other means to reinstate his tariff agenda, said Thibault Denamiel, a fellow at the Center for Strategic and International Studies. These include Section 122 of the Trade Act of 1974, 'which is intended to deal with a balance of payments emergency but does not require a formal investigation,' Denamiel told AFP. The authority restricts tariffs to 15 percent and they can only last 150 days. But it is among the policy levers that Trump could pull as he seeks a 'bridge' toward more lasting actions, said KPMG Chief Economist Diane Swonk. Another option is Section 338 of the Trade Act of 1930, allowing the administration to impose tariffs of up to 50 percent on countries that discriminate against the United States, Denamiel said. Does this affect trade talks? The US trade court's ruling did not remove the threat of US tariffs for Europe or end the need for negotiations, said Andrew Kenningham, Chief Europe Economist at Capital Economics. This is because the threat of reciprocal tariffs remains if the White House wins its appeal, he said. Trump could also turn to sector-specific means as he did in his first term or seek congressional approval for tariffs, though this is less likely, Kenningham said. It is not clear if negotiations will lose steam, Swonk added, given that the administration wants to leverage the threat of tariffs 'very aggressively.' Even if the original ruling is eventually upheld, US officials could still buy time to exert pressure on other economies including the European Union and China. What about the broader economy? The court process 'introduces greater ambiguity around the future direction of US trade policy,' especially because the appeal is ongoing, said EY Chief Economist Gregory Daco. 'This legal development amplifies longer-lasting uncertainty for businesses navigating cross-border supply chains,' he added in a note. US stocks closed higher Thursday, but economic fallout has already occurred in recent months with Trump's see-sawing approach to unveiling tariffs and pausing them selectively. Financial markets have been roiled by policy shifts, and shipping halts due to high tariffs bring disruptions that cannot be cleared overnight, analysts said. 'The fate of the economy remains precarious even if we avert a recession,' Swonk said on social media.
CNA
3 days ago
- Business
- CNA
What comes next in Trump's legal battle over tariffs
WASHINGTON: A United States federal appeals court has temporarily halted a ruling that found many of President Donald Trump's tariffs illegal, but the chance it could ultimately back the original decision looms over the White House. What is in the US Court of International Trade's original ruling, which the Trump administration is appealing, and what options does the administration have? Which tariffs were affected? The three-judge trade court ruled on Wednesday (May 28) that Trump overstepped his authority in imposing blanket tariffs by invoking emergency economic powers. The judgment, although temporarily halted, affected levies unveiled on Apr 2, which involve a 10 per cent tariff on most trading partners and higher rates on dozens of economies, including China and the European Union. These higher levels are currently suspended while negotiations take place. The ruling also applies to tariffs imposed on Canada, Mexico and China over their alleged roles in allowing an influx of drugs into the US. But it left intact sector-specific levies like those on steel, aluminium and auto imports. Why a pause? The ruling by the little-known court, which has nationwide jurisdiction over tariff and trade disputes, initially gave the White House 10 days to complete the process of unwinding the levies. But the US Court of Appeals for the Federal Circuit on Thursday granted a temporary stay "until further notice" while the Trump administration's appeals process plays out. This means the tariffs can remain in effect for now, while a longer-term outcome is yet to be determined. National Economic Council director Kevin Hassett told Fox News the administration is "very pleased with the ruling", dubbing it a victory. What are Trump's alternatives? The appeals court could eventually uphold the trade court's original decision to block Trump's sweeping tariffs. The president, however, has other means to reinstate his tariff agenda, said Thibault Denamiel, a fellow at the Center for Strategic and International Studies. These include Section 122 of the Trade Act of 1974, "which is intended to deal with a balance of payments emergency but does not require a formal investigation", Denamiel told AFP. The authority restricts tariffs to 15 per cent, and they can only last 150 days. But it is among the policy levers that Trump could pull as he seeks a "bridge" towards more lasting actions, said KPMG chief economist Diane Swonk. Another option is Section 338 of the Trade Act of 1930, allowing the administration to impose tariffs of up to 50 per cent on countries that discriminate against the US, Denamiel said. Does this affect trade talks? The US trade court's ruling did not remove the threat of US tariffs for Europe or end the need for negotiations, said Andrew Kenningham, chief Europe economist at Capital Economics. This is because the threat of reciprocal tariffs remains if the White House wins its appeal, he said. Trump could also turn to sector-specific means as he did in his first term or seek congressional approval for tariffs, though this is less likely, Kenningham said. It is not clear if negotiations will lose steam, Swonk added, given that the administration wants to leverage the threat of tariffs "very aggressively". Even if the original ruling is eventually upheld, US officials could still buy time to exert pressure on other economies, including the EU and China. What about the broader economy? The court process "introduces greater ambiguity around the future direction of US trade policy", especially because the appeal is ongoing, said EY chief economist Gregory Daco. "This legal development amplifies longer-lasting uncertainty for businesses navigating cross-border supply chains," he added in a note. US stocks closed higher on Thursday, but economic fallout has already occurred in recent months with Trump's see-sawing approach to unveiling tariffs and pausing them selectively. Financial markets have been roiled by policy shifts, and shipping halts due to high tariffs bring disruptions that cannot be cleared overnight, analysts said.
Entrepreneur
3 days ago
- Business
- Entrepreneur
Federal Court Overturns Trump's Tariffs Impacting Global Markets
A recent federal court ruling has reshaped market dynamics and sparked a wave of international reactions. The decision challenges tariffs implemented during a national emergency and sets in motion significant... This story originally appeared on Due A recent federal court ruling has reshaped market dynamics and sparked a wave of international reactions. The decision challenges tariffs implemented during a national emergency and sets in motion significant economic shifts. The ruling also questions the legal authority used to impose these measures, stirring debate both domestically and abroad. Legal Foundations and the Court's Decision The court ruling centered on the use of a law from 1977. The statute allowed the president to impose tariffs without congressional approval during a national emergency. However, the court found that there was no valid emergency at the time these tariffs were levied. This disagreement with the use of the statute has resulted in a clear mandate for change. The court ordered that within ten days, the United States must remove a range of tariffs. These include a 10% tariff on many goods and a 25% tariff imposed on merchandise coming from nations such as China, Mexico, and Canada. The only exception remains a 25% tariff on steel and aluminum products. President Trump, responsible for these tariffs, has immediately appealed the ruling. The appeal process may extend the legal discussion and could influence the final outcome. However, as it stands, the decision requires a swift response to remove most of the controversial tariffs. View this post on Instagram Market Reactions and Global Impact The decision sent shock waves throughout global stock markets. Investors reacted strongly to the news, leading stocks to surge unexpectedly. The ruling was met with celebration in many international capitals. Many governments outside the United States expressed relief and optimism about the change. The tariffs had impacted global economies since they were originally imposed. These tariffs had altered trade dynamics and were widely criticized by international economists. Economists from the Federal Reserve to independent market analysts believed these measures would lead to higher inflation and slower economic growth. The removal of many tariffs now eases these anticipated pressures. Price Stability: Inflation prospects may lower due to eased trade barriers. Inflation prospects may lower due to eased trade barriers. Economic Growth: Some experts expect that slower growth and increased market fluidity may encourage investment. Some experts expect that slower growth and increased market fluidity may encourage investment. International Trade: Foreign countries have long seen these tariffs as unsustainable and welcomed the change. The impact on market sentiment was immediate. Stock prices morphed rapidly as traders adjusted their positions in response to the new legal landscape. This abrupt shift demonstrates how policy changes can affect global financial stability. Economic Implications Within the United States Domestically, the decision presents a complex mix of benefits and challenges. Economists note that while many sectors might benefit from the removal of tariffs, it also removes a bargaining tool that was used in trade negotiations. Previously, many in the administration expected that the revenue generated from these tariffs would help offset proposed tax cuts. With the tariffs being largely removed, policymakers face the challenge of replacing that revenue source. This could lead to a re-evaluation of fiscal policies and adjustments in budget planning. The tariffs were also intended to provide leverage in negotiations with other nations. For many years, foreign tariffs on American products had been higher. The recent removal of the tariffs might shift these strategic dynamics, leaving American negotiators with less leverage in international trade disputes. Some analysts believe that the removal of tariffs may have a dual economic effect. On the one hand, consumers could benefit from lower costs on imported goods due to reduced tariffs. On the other hand, the country might experience a shortfall in government revenue that was previously earmarked to balance tax cuts. This situation requires careful fiscal planning to mitigate potential negative outcomes. International Response and Future Negotiations Outside the United States, the reaction has been one of cautious optimism. Many nations have seen the tariffs as a unilateral move that disrupted global trade practices. The removal of these tariffs could pave the way for smoother trade relations in the near term. Trade experts and economic diplomats are now keenly watching the unfolding situation in the United States with interest. They note that trade agreements may be renegotiated in light of the removal of the tariffs. As long negotiations continue, market participants may see shifts in tariffs and recalibrated trade deals. International trading partners had long criticized the previous policies. In several countries, responses ranged from public statements of relief to calls for enhanced cooperation. The ruling might force American negotiators to work harder to secure favorable terms in future trade agreements. While the immediate effect appears beneficial for many foreign economies, there may be long-term strategic implications. Countries that once benefited indirectly from the leverage provided by the tariffs must now consider new methods to protect and advance their trade interests. Broader Economic Considerations The federal court's decision brings numerous economic considerations to the forefront. The tariffs had been widely regarded as a double-edged sword. They were designed to protect American industries but also carried unintended costs in the form of higher consumer prices and strained international relations. Multiple economic models had predicted that the tariffs would lead to higher inflation and slower growth. With their removal, there is now the possibility of improved consumer sentiment and increased investment confidence. At the same time, the reversal poses questions about the government's overall strategy in handling trade matters. Experts emphasize that government revenue and trade leverage are two sides of the same coin in policy formulation. The loss of tariff-generated income may have to be offset by other means. Government agencies are now likely to consider alternative fiscal measures to fill the gap left by the tariff revenue stream. Political Repercussions and National Debate The decision has sparked political debates within the United States. Politicians from various parties have weighed in on the implications of the ruling. Supporters of the tariffs argue that they provided a necessary tool to enforce fair trading practices. Critics maintain that the tariffs were imposed without sufficient congressional oversight. This dispute has added another chapter to the ongoing debate over executive powers. The fact that tariffs were imposed unilaterally raises concerns about accountability and proper legislative procedure. The court's ruling reinforces the view that congressional input is vital in significant economic decisions. Political analysts note that the legal challenge may lead to further investigations into past presidential decisions. It has already raised questions about the appropriate limits of executive authority. Such discussions are likely to influence future policy debates and the balance of power between branches of government. Industry and Investment Community Insights The investment community has reacted quickly to the news. Traders and financial analysts are revising their strategies based on the new legal framework. Many view the ruling as an opportunity to recalibrate portfolios and mitigate exposure to tariff-related risks. Industry leaders also acknowledge that the reversed tariffs may lower production costs for companies that rely on imported raw materials. This change could support competitive pricing and boost overall efficiency. However, businesses that once benefited from a controlled tariff environment may need to adjust to new market conditions. Market analysts caution that while short-term gains are evident, the longer-term impact will depend on the implementation of follow-up policies. Businesses are advised to monitor government decisions closely to plan accordingly. Companies are preparing for potential adjustments to their supply chains as trade dynamics evolve. Looking Ahead: Challenges and Opportunities The court's decision is likely to have enduring effects. It highlights key issues regarding legal authority, economic policy, and trade strategy. Both domestic and international entities now face the challenge of adapting to a new economic environment. The repeal of the tariffs may help mitigate inflationary pressures. Yet, it simultaneously restricts a negotiating tool that was valuable in trade discussions. U.S. policymakers are now faced with the challenge of finding alternative ways to manage trade imbalances and secure revenue. As the appeal process unfolds, both financial markets and policymakers will remain vigilant. The immediate benefits seen in easing trade-induced inflation must be weighed against the loss of trade leverage and potential revenue shortfalls. In the coming months, these factors will influence both economic performance and political discussions. The long-term effects remain uncertain. Key questions include how the loss of tariff revenue will affect government spending and how trade negotiations will be reshaped. Policymakers in Washington are expected to take swift action to address these challenges. Meanwhile, investors and industry representatives are rethinking their strategies in light of new economic realities. This moment highlights the delicate balance between protecting domestic interests and engaging in global trade. The federal court's decision serves as a reminder that emergency powers carry risks. Ensuring sound legal foundations is essential for stable economic policy. Both the legal rulings and subsequent policy changes will likely have a lasting impact on the national and international monetary order. The post Federal Court Overturns Trump's Tariffs Impacting Global Markets appeared first on Due.
Bloomberg
3 days ago
- Business
- Bloomberg
Where Does Trump's Trade War Go With Tariffs in Legal Limbo?
By , Josh Wingrove, Shawn Donnan, and Laura Curtis Updated on Save The US Court of International Trade ruled May 28 that the vast majority of President Donald Trump's tariffs were issued illegally and ordered them blocked, which would deliver a blow to a key pillar of his economic agenda. A day later, an appeals court gave Trump's administration a temporarily reprieve from the ruling while weighing a longer-lasting hold. In a unanimous ruling by a panel of three judges, the New York-based trade court concluded that Trump wrongfully invoked an emergency law to justify the levies. It was a rare rebuke as the courts tend to defer to the president on trade matters.
Al Arabiya
3 days ago
- Business
- Al Arabiya
Federal court blocks Trump's tariffs; Harvard in his crosshairs
In this episode of Global News Today, presented by Tom Burges Watson, we focus on a significant legal blow to US President Donald Trump, as a federal court strikes down most of his sweeping tariffs. The Court of International Trade ruled that Trump had overstepped his authority, delivering a setback to his trade agenda and lifting global financial markets. We explore what this ruling could mean for US policy and international trade. We also examine the escalating clash between Harvard University and Trump, who has made the institution a centerpiece of his campaign against elite universities. Trump has threatened funding cuts and action against foreign students, accusing Harvard of liberal bias and antisemitism. Greg Swenson – Chair of Republicans Overseas
