WASHINGTON (AP) — A federal court of appeals ruled Friday that President Donald Trump has no legal right to impose drastic tariffs, but for now he has left his efforts to build a protectionist wall around the American economy.
The U.S. Court of Appeals for the Federal Circuit ruled that Trump is not legally permitted to declare a national emergency and impose import taxes on almost every country on the planet.
However, the 7-4 court did not immediately overthrow the tariffs and allowed his administrative time to appeal to the Supreme Court.
The president vowed to do just that. “If it can bear it, this decision will literally destroy the United States,” Trump wrote on his social middle platform.
The ruling complicates Trump’s ambition to completely overturn decades of American trade policy himself. Trump has an alternative law to impose import taxes, but they will limit the speed and severity he can act. His tariffs, and the unstable way he deployed them, shook global markets, alienated US trading partners and allies, and increased fears about rising prices and slowing economic growth.
However, he used taxation to pressure the European Union, Japan and other countries to accept unilateral trade transactions, bringing tens of thousands of dollars to the Federal Treasury to help pay the massive tax cuts that he signed into law on July 4th.
“Although existing trade transactions may not be automatically elucidated, the administration may lose the pillars of its negotiation strategy. This strategy could burn foreign governments to resist future demands, delay implementation of previous commitments, or try to renegotiate terms.”
The government argued that if tariffs were abolished, it might have to refund some of the import taxes it collected and cause a financial blow to the US Treasury.
“It’ll be another great pression in 1929!” Trump said in a previous post on the True Society.
Revenue from tariffs totaled $142 billion by July, more than doubled as of the previous year. In fact, the Department of Justice warned in a legal application this month that revoking tariffs could mean “financial ruin” for the United States.
The judgment includes two sets of import taxes. Both were justified by declaring a national emergency under the International Emergency Economic Force Act (IEEPA) of 1977.
– The cleaning fee he announced on April 2nd was “Liberation Day.” He called it – when he imposed “mutual” tariffs, he imposed a “baseline” and a 10% tariff on countries where the US operates the trade deficit. We changed tariff charges in August, but products from countries where the US operates surplus also face taxes.
– “Human Trafficking Tariff” announced February 1st regarding imports from Canada, China and Mexico. These were designed to stop those countries to stop him from declaring a state of emergency.
The Constitution gives parliament the power to impose taxes, including tariffs. But for decades, lawmakers handed over the authorities to the president, and Trump made the most of the vacuum of power.
But Trump’s claim that Ieepa essentially gives him unlimited power over import taxes quickly elicited at least seven cases: legal challenges. The IEEPA was used frequently, but frequently used to impose export restrictions and other sanctions on US enemies such as Iran and North Korea, but the president never used the law.
The plaintiffs argued that the Emergency Power Act does not allow the use of customs duties.
They also noted that the trade deficit rarely meets the definition of “abnormal and extraordinary” threat that justifies declaring a state of emergency under the law. After all, the US runs a trade deficit – it buys more from abroad than they sell.
The Trump administration alleged that the court approved President Richard Nixon’s emergency use of tariffs during the 1971 economic crisis. The Nixon administration successfully cited its authority under a deal with the enemy in 1917.
In May, the US International Trade Court in New York refused to debate, stating that the tariffs on Trump’s release date “exceeded the authorities granted to the president” and “based on the Emergency Act.” In reaching that decision, the Trade Court combined two challenges (1 x 5 business and one US state) into a single case.
In the case of drug trafficking and immigration tariffs in Canada, China and Mexico, the Trade Court ruled that the taxation did not meet Yepa’s requirement that it “measures the issues that were to be addressed.”
Court challenges do not cover other Trump tariffs, including taxation Foreign steel, aluminum The cars imposed by the President after a Commerce Department investigation concluded that these imports pose a threat to US national security.
It also doesn’t include the tariffs Trump imposed on China in his first term — and President Joe Biden concluded after the government’s investigation was over, that Chinese people used unfair practices to give their own tech companies an edge over their rivals from the US and other Western countries.
Trump may cite alternative authorities to impose import taxes, but they are more limited. For example, Section 122 of the Trade Act of 1974 allows the president to tax imports from countries where the United States operates a large trade deficit at 15% over 150 days.
Similarly, Section 301 of the same Act of 1974 allows the President to tax imports from countries found to be engaged in unfair trade practices after an investigation by the US Trade Representative. Trump used Section 301 authority to launch a first-term trade war with China.
__
Associated Press authors Mark Sherman and Josh Bork contributed to the story.
