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The Trump administration is racing to halt a major blow to the president’s sweeping tariffs after a US court ruled they “exceed any authority granted to the president.” A US trade court ruled the US president’s tariffs regime was illegal on Wednesday in a dramatic twist that could block Trump’s controversial global trade policy.
On Thursday, an appeals court agreed to a temporary pause in the decision pending an appeal hearing. The Trump administration is expected to take the case to the supreme court if it loses. The ruling by a three-judge panel at the New York-based court of international trade came after several lawsuits argued Trump had exceeded his authority, leaving US trade policy dependent on his whims and unleashing economic chaos around the world.
On Thursday, the Trump administration filed for “emergency relief” from the ruling “to avoid the irreparable national-security and economic harms at stake”. The White House press secretary, Karoline Leavitt, said the judges had “brazenly abused their judicial power to usurp the authority of President Trump” in what she characterised as a pattern of judicial overreach. “Ultimately the supreme court must put an end to this,” she said.
Leavitt’s comments came as a second judge, Washington DC district court judge Rudolph Contreras, called the tariffs “unlawful” and ordered a preliminary injunction on the collection of tariffs from a pair of Illinois toy importers, which brought the case. Tariffs typically need to be approved by Congress but Trump has so far bypassed that requirement by claiming that the country’s trade deficits amount to a national emergency. This had left the US president able to apply sweeping tariffs to most countries last month, in a shock move that sent markets reeling.
The court’s ruling stated that Trump’s tariff orders “exceed any authority granted to the president … to regulate importation by means of tariffs”. The judges were keen to state that they were not passing judgment on the “wisdom or likely effectiveness of the president’s use of tariffs as leverage”. Instead, their ruling centered on whether the trade levies had been legally applied in the first place. Their use was “impermissible not because it is unwise or ineffective, but because [federal law] does not allow it”, the decision explained.
Financial markets cheered the court’s ruling, with the US dollar rallying in its wake, soaring against the euro, yen and Swiss franc. In Europe, the German Dax rallied 0.9%, while France’s Cac 40 rose 1%. The UK’s FTSE 100 blue-chip index ticked up 0.1% at the start of trading. Stocks in Asia also climbed on Thursday, while in the US stock markets all rose marginally.
The court ruling immediately invalidated all of the tariff orders that were issued through the International Emergency Economic Powers Act (IEEPA), a law meant to address “unusual and extraordinary” threats during a national emergency. The judges said Trump must issue new orders reflecting the permanent injunction within 10 days.
The ruling, if it stands, blows a giant hole through Trump’s strategy to use steep tariffs to wring concessions from trading partners, draw manufacturing jobs back to US shores and shrink a $1.2tn (£892bn) US goods trade deficit, which were among his key campaign promises. Without the help of the IEEPA, the Trump administration would have to take a slower approach, launching lengthier trade investigations and abiding by other trade laws to back the tariff threats.
The decision is also likely to embolden other challenges to Trump’s policy. Last month, California’s governor, Gavin Newsom, filed a lawsuit against the tariffs, arguing they were “illegal, full stop”. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium, using a different statute, so these are likely to remain in place for now.
Stephen Miller, the White House deputy chief of staff for policy, hit out at the ruling in a social media post claiming “the judicial coup is out of control”.
At least seven lawsuits have challenged Trump’s border taxes, the centerpiece of Trump’s trade policy. The court made its ruling in response to two cases. One was filed by a group of small businesses, including a wine importer, VOS Selections, whose owner said the tariffs were having a major impact and his company may not survive.
The plaintiffs in the tariff lawsuit argued that the emergency powers law did not give the president the power to apply tariffs, and even if it had done, the trade deficit did not qualify as an emergency, which is defined as an “unusual and extraordinary threat”. The US has run a trade deficit with the rest of the world for 49 consecutive years.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
Comments
Even after the eventual appeals court hearing the entire matter will likely be appealed yet again to the Trump-dominated Supreme court.
Despite the seemingly authoritative language of the original Constitution Alito and Thomas are quite capable of abandoning their preferred "original intent" interpretations and torturing their opinions to meet any far-right need of the moment. "Whatever it takes" is their motto.
Make the Big Lie big enough, and repeat it enough, and eventually, it will all be taken for granted, a truism. Too many judges are operating as wholly owned subsidiaries of the Orange Criminal Behemoth.
Thanks @Old_Joe for keeping us posted on the process as it plays out.
I’ll refrain from further comment on this thread as I can see it turning partisan / ugly. Same reason I no longer read the OT section.