A federal court, the US Court of International Trade, on Wednesday, the 28th of May, blocked President Donald Trump from imposing import tariffs on US trading partners, saying that his efforts to justify them with claims of a national emergency exceeded his legal authority, reports Reuters.
The court said that only Congress has the power to manage trade with other countries, and the President’s emergency powers do not override that power.
“The Court does not decide the wisdom or effectiveness of the President’s use of tariffs as a leverage,” the three-judge panel said in its decision to issue a permanent injunction against Trump’s tariffs. “Such use is impermissible not because it is unreasonable or ineffective, but because [federal law] does not permit it.”
The judges also ordered the Trump administration to issue new orders within 10 days to reflect the permanent ban.
The Trump administration filed an appeal a few minutes later and questioned the court’s authority.
The court struck down with immediate effect all of Trump’s tariff orders issued since January and based on the International Emergency Economic Powers Act (IEEPA), a law designed to address “unusual and extraordinary” threats in a national emergency, to impose sanctions on US enemies or freeze their assets.
TRUMP HAS ARGUED THAT HE HAS BROAD AUTHORITY TO IMPOSE TARIFFS UNDER THE IEEPA. HE IS THE FIRST PRESIDENT TO USE IT TO IMPOSE TARIFFS.
The court did not rule on the tariffs that Trump imposed on cars, steel and aluminium, which are based on a different law.
The Manhattan-based International Trade Court, which hears disputes over international trade and customs laws, can appeal to the US Court of Appeals for the Federal Circuit in Washington and finally to the US Supreme Court.
A White House spokesman said on Wednesday that the US trade deficit with other countries is “a national emergency that has devastated American communities, left our workers unemployed and weakened our defence industrial base – facts that were not disputed by the court”.
“Unelected judges should not be deciding the proper way to handle a national emergency,” spokesman Kush Desai said in a statement.
Financial markets reacted positively to the court ruling. The US dollar rose sharply, especially against the euro, the yen and the Swiss franc. Stock futures and Asian markets also rose.
If the ruling stands, it will undermine Trump’s strategy of using high tariffs to extract concessions from trading partners in trade negotiations. It also creates uncertainty in the ongoing negotiations with the EU, China and other countries.
BNN already reported that, after talks with EU Ursula von der Leyen, Trump once again postponed the tariffs imposed on the EU until the 9th of July in order to negotiate.
Trump claims that the tariffs will help restore jobs in factories and reduce the 1.2 trillion dollar trade deficit in goods. However, without leverage, his administration may have to look for new tactics or count on slower negotiations.
The ruling was based on two lawsuits: one brought by the non-partisan Liberty Justice Center, which represents five small US import companies, and the other by 12 US states. Both challenged tariffs on goods from specific countries.
At least five other lawsuits against tariffs are pending.
The Department of Justice has stated that the lawsuits should be dismissed because the plaintiffs have not been harmed by the tariffs, which they have not yet paid, and only Congress, not private companies, can challenge the President’s declaration of a national emergency under IEEPA.