(Fierce Electronics)—A US trade court permanently blocked most of President Trump’s tariffs in a ruling Wednesday that his administration immediately appealed, meaning the matter could ultimately be decided by the Supreme Court. On Thursday, an appeals court paused the trade court decision, reinstating the tariffs for now.
The Court of International Trade, in a three-judge decision, said the president overstepped his authority in imposing broad tariffs on trading partners. The panel said the US Constitution gives Congress exclusive authority to regulate trade with other countries, not to be overridden by a president’s emergency powers to safeguard the US.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,”the three-judge panel said in the decision. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”
But Thursday, the US Court of Appeals restored Trump’s ability to levy tariffs. The appeals court told both sides to provide written arguments early next month on the matter of blocking Trump’s tariffs .
Trump’s executive orders on tariffs started back in January and were based on the International Emergency Economic Powers Act for action on “unusual and extraordinary” threats during a national emergency. Trump claimed he has broad authority under the Act.
In April, he said the national emergency from the trade deficit justified a 10% across-the-board tariff on all imports with higher ones on countries like China, where a large portion of electronics shipped to the US are made or assembled. A large tariff on China was reduced to 30% on May 12, however, as a 90-day tariff truce with the US was declared
Minutes after the first ruling, the Trump administration filed a notice of appeal, while questioning the authority of the court. The decision of the Manhattan-based Court of International Trade can be appealed to the US Court of Appeals for the federal circuit in Washington and then the US Supreme Court.
After the pause on Thursday, Trump’s top trade advisor Peter Navarro told reporters, “I can assure the American people that the Trump tariff agenda is alive, well, healthy and will be implemented to protect you, to save your jobs and your factories and to stop shipping foreign wealth, our wealth, into foreign hands.”
A Trump spokesman said, “It is not for unelected judges to decide how to properly address a national emergency. The spokesperson described US trade deficits with other countries as a “national emergency that has decimated American communities, left our workers behind and weakened our defense industrial base—facts that the court did not dispute.”
The original ruling might have seemed to end Trump’s attempts to use tariffs to balance trade and to urge companies to build manufacturing in the US while it creates doubt over negotiations with the EU, China and other countries. However, analysts argued otherwise noting that the 49-page trade court order does not block tariffs on specific sectors like steel, aluminum and automobiles and advised that Trump has other legal means to impose country-specific or even broader tariffs.
“This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major U.S. trading partners,” Goldman Sachs analyst Alec Phillips wrote in a note.
The trade court ruling was the result of two lawsuits, one by the Liberty Justice Center speaking on behalf of five small US businesses that import goods and 12 US states.
The five business plaintiffs in the case are: VOS Selections, Plastic Services and Products doing business as Genova Pipe, Microkits, FishUSA and Terry Precision Cycling. The 12 states that are plaintiffs are: Oregon, Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York and Vermont.
Author: Matt Hamblen