A US federal court has struck down most of president Donald Trump’s tariffs, throwing the Republican president’s trade programme into doubt.
A series of cases brought before the court challenged Trump’s abilities to impose tariffs using the International Emergency Economic Powers Act 1977 (IEEPA).
The plaintiffs argued that Trump did not have the power to impose the tariffs, because this power belonged to the US Congress.
Unanimous decision
In a unanimous ruling, a three-judge panel of the US Court of International Trade held that the IEEPA did not delegate this power to Trump.
“An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government.
“The court does not read the words ‘regulate… importation’ in IEEPA as authorising the president to impose whatever tariff rates he deems desirable.”
The court found that these words “cannot grant the president unlimited tariff authority”, instead providing more limited powers. It cited legal precedent from a challenge to president Richard Nixon’s decision to impose duties on imports in 1974.
As such, multiple tariff orders were vacated. The administration, which has been given ten days to comply with the judgment, said it would appeal the decision.
Remaining tariffs
Of the three judges, Timothy Reif had been appointed by Trump himself, while Jane Restani was appointed by fellow Republican president Ronald Reagan. The remaining judge, Gary Katzmann, had been appointed by Democratic president Barack Obama.
Not every tariff will be invalidated as a result of the decision. Those imposed under Section 301 and 232 on Chinese goods and various metals will remain in place.
However, the 25% rate on Mexican and Canadian products, the 30% on Chinese goods and 10% on most other imports into the US are set to be removed within ten days of the judgement.
Stock markets rose following the news.
‘Win for businesses’
The non-partisan advocacy group, the Liberty Justice Center, one of the plaintiffs, called the decision a “major win” for businesses.
Jeffrey Schwab, the senior counsel and director of litigation at the group, said:
“This ruling reaffirms that the President must act within the bounds of the law, and it protects American businesses and consumers from the destabilising effects of volatile, unilaterally imposed tariffs.”
Scott Lincicome, the vice president of general economics at the Cato Institute, a right-wing think tank, said the ruling was “a huge and immediate relief for thousands of American companies facing potentially crippling new costs that materialised almost overnight through no fault of their own.”
“It gives foreign states – after having to renegotiate the trade agreements the Trump administration broke – significant new leverage in ongoing trade talks. Hopefully, the ruling will stand on appeal, so we can put this costly and embarrassing episode behind us."
Foreign and domestic reaction
Many countries currently negotiating with the US to reduce the tariffs gave the court ruling a cautious reaction.
Japanese chief cabinet secretary Hayashi said at a press conference yesterday that Tokyo would “look under the hood of the ruling and the implications of that and take appropriate actions,” and would continue to prioritise the negotiations.
Don Farrell, Australia’s trade minister, said that his government would “study this ruling of the US federal courts on reciprocal tariffs closely and note that they may be subject to further legal processes through the court.”
A British government spokesperson said that the decision was a matter for the US and that it was working to “ensure that businesses can benefit” from a US-UK deal agreed earlier this month.
"It is not for unelected judges to decide how to properly address a national emergency," White House deputy press secretary Kush Desai said in a statement.
Stephen Miller, a White House deputy chief of staff, called the decision “a judicial coup”.
