Federal Circuit Court of Appeals rules Trump's tariff measures illegal

Federal Circuit Court of Appeals rules Trump's tariff measures illegal

A federal appeals court has ruled that President Donald Trump's tariff measures were implemented illegally, finding that only Congress has the authority to impose such sweeping measures. The U.S. Court of Appeals for the Federal Circuit, in a 7-4 decision, struck down the bulk of Trump's tariffs under the International Emergency Economic Powers Act (IEEPA).

The ruling, signed by seven judges, states that "the core Congressional power to impose taxes such as tariffs is vested exclusively in the legislative branch by the Constitution." The decision affects two sets of tariffs: the country-by-country or "reciprocal" tariffs, which range from 34% for China to a 10% baseline for the rest of the world, and the 25% tariff on some goods from Canada, China, and Mexico for what the Trump administration claimed was a failure to curb fentanyl flows.

However, the court allowed the tariffs to remain in place while the case proceeds, stating that the administration may appeal to the U.S. Supreme Court or the Court of International Trade. The Supreme Court currently has a conservative majority, which could potentially uphold the tariffs.

The ruling has significant implications for the U.S. trade policy and the economy. Many businesses have expressed concern over the uncertainty caused by the tariff policy, making it difficult to plan and manage supply chains. The National Retail Federation, for instance, has stated that the tariffs have made it nearly impossible to forecast costs and manage inventories.

Trump's administration has vowed to continue defending the tariffs, with White House spokesman Kush Desai stating that the tariffs remain in effect and the administration looks forward to ultimate victory on the matter. However, the dissenting judges argued that the IEEPA had been appropriately used by Trump in relation to the tariffs.

The ruling also highlights the legal challenges faced by the Trump administration's use of the IEEPA law. The administration may have other ways to impose import taxes, such as Section 301 of the 1974 U.S. Trade Act or Section 232 of the 1962 trade law. However, these methods may also face legal scrutiny.

The decision is a significant setback for the Trump administration's trade policy and underscores the legal limitations on presidential authority in this area. The ruling is likely to cause further uncertainty in the markets and could potentially lead to changes in the administration's trade strategy.

References:

[1] https://www.nbcnews.com/business/business-news/trump-tariffs-lawsuit-appeals-court-ruling-what-to-know-rcna223915
[2] https://www.golocalprov.com/business/federal-appeals-court-strikes-down-most-of-trumps-tariff-policy