The US Court of Appeals declared President Donald Trump’s comprehensive tariff policy illegal, but stopped suspending widespread import taxes entirely.
On Friday, the Federal Circuit Court of Appeals in Washington, D.C., had largely upheld the decision in May that Trump had found that he had stepped over his power to impose universal tariffs on all U.S. trading partners.
Trump had called the International Emergency Economic Force Act (IEEPA) to justify the move, claiming that trade deficits with other countries constituted a “national emergency.”
However, the appeals court questioned the logic in its ruling on Friday, ruling between 7 and 4 on blanket tariffs.
“This law gives the President a vital authority to take on many actions in response to a state emergency declared,” the court wrote.
“However, none of these measures expressly includes the authority or taxable power to impose customs, obligations, or similar.”
The Trump administration is expected to appeal to the Supreme Court, and therefore the appeals court said his tariff policies could remain until October 14th.
That was a departure from the May ruling, which included an injunction to halt tariffs immediately from coming into force.
What is this incident?
The first May decision was provided by the New York-based US Court of International Trade.
That case was one of at least eight challenges to Trump’s sweeping tariff policy.
Trump has long argued that his US trading partners are taking advantage of the world’s largest economy. He portrays the trade deficit when the US imports more than its exports as an existential threat to the economy.
However, experts warn that trade deficits are not necessarily bad. They could be a sign of a strong consumer base or a result of differences in currency values.
Still, on April 2, Trump called the IEEPA to impose 10% tariffs on all countries, as well as separate “mutual” tariffs on certain trading partners.
He called the opportunity “Day of Liberation,” but critics pointed out that global markets responded to the announcement of tariffs by stumbling downwards.
A few days later, the Trump administration announced a suspension in almost every country, saving China, as “mutual” tariffs are expected to take effect. In the meantime, Trump and his officials said they would try to negotiate trade deals with global partners.
In July, a new slate of individualized, country-specific tariffs was announced in the form of a letter Trump posted to his social media account. Many of them came into effect on August 1, including a 50% tariff on Brazil for the prosecution of former Trump ally, former President Jae Bolsonaro.
Just this week, on August 27th, India was slapped at 50% tariffs as a result of its purchase of oil from Russia.
Meanwhile, Mexico, Canada and China have faced Trump’s tariff threat since February, and Trump has used import taxes to ensure border security and compliance with his policies on drug fentanyl.
What is the discussion?
The US president has limited authority to issue tariffs to protect certain domestic industries, and Trump uses its power in the case of imported steel, aluminum and automotive products.
However, the US Constitution generally places the authority to issue taxes, including tariffs, under Congress, rather than the presidency.
So lawsuits like Friday allegedly exceed his presidential authority when it comes to collecting tariffs on blankets.
The Court of Appeals’ ruling also pointed out that Ieepa would not give unchecked power to the presidency.
“It seems unlikely that Congress intended to impose tariffs by enacting Ieepa to separate himself from past practices and to impose unlimited authority on the President,” the ruling said.
The decision was made in response to two lawsuits. One was submitted by the Nonpartisan Center for Freedom Justice on behalf of five small businesses in the United States, and the other was submitted by 12 states in the United States.
Still, on his social media platform, true social, Trump appears rebellious, emphasizing that his tariffs remain despite the appeals court decision.
“All tariffs are still in effect! Today, the highly partisan court of appeals mistakenly said that our tariffs should be removed, but they know that the United States will ultimately win,” he wrote.
He added that his view is that tariffs are “the best tool to help our workers.” He also implied that he hopes the Supreme Court will support him in his appeal.
“If these tariffs go away, it’s going to be a complete disaster for the country. It will make us economically weak and we have to be strong,” Trump said.
“We have been allowed to use tariffs against us by our creepy and unwise politicians. Now, with the help of the US Supreme Court, we will use them for the benefit of our country.”
