A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president. The decision, which affects tariffs imposed on nearly every country the US trades with, upholds a previous ruling from the Court of International Trade.
Many of the tariffs stem from an announcement made in April regarding a flat 10% import tax, which Trump claimed was necessary to level unfair trade relations. The court noted that while the tariffs remain in place until mid-October, they will lead to a potential legal challenge in the Supreme Court.
What did the appeals court say?
In a 7-4 decision, the appellate court supported the notion that Trump's tariffs are not justified under the International Emergency Economic Powers Act (IEEPA), which does not provide the president with the authority to impose tariffs or taxes. Trump criticized the ruling as politically biased and detrimental to the country.
Understanding the IEEPA
This act, invoked multiple times by Trump, is designed to allow the president to respond to national emergencies or threats from abroad, yet the court concluded that it does not give the president power to impose tariffs. The concept of a trade imbalance being a threat to national security was rejected.
The Importance of This Ruling
This decision represents a significant blow to Trump's policy agenda and could have far-reaching implications for the US economy, possibly causing uncertainty in financial markets. Economists warn that this ambiguity might affect international trade and economic activity.
Next Steps
The case is expected to proceed to the Supreme Court, with Trump expressing his intent to leverage the situation to benefit the nation. The conservative majority may sides with Trump, but the court has shown readiness to challenge executive overreach in the past.
Potential Consequences of a Supreme Court Ruling
If the Supreme Court supports the appeals court decision, it could disrupt U.S. trade relationships, force the return of billions in import tax revenues, and destabilize trade agreements with key allies. Conversely, if the Court reverses the ruling, it could affirm Trump's authority significantly.
Current Status of Tariffs
The ruling primarily impacts Trump's reciprocal tariffs but does not affect tariffs on steel, aluminum, and copper imposed under different authority. Unless overturned, these tariffs will become unenforceable after mid-October.
