(The Daily Beast)—A federal trade court dealt a major blow to President Donald Trump’s market-roiling trade war after it ruled that he lacked the authority to impose global tariffs.
The U.S. Court of International Trade blocked the bulk of Trump’s sweeping “Liberation Day” levies on Wednesday, bringing the administration’s trade war to a screeching halt and setting the stage for an appeal.
The three-judge panel said the International Emergency Economic Powers Act of 1977, which Trump invoked when he announced his tariffs in April, does not grant the president “unbounded authority.”
“The worldwide and retaliatory tariff orders exceed any authority granted to the president by IEEPA to regulate importation by means of tariffs,” the court ruled. “The challenged tariff orders will be vacated and their operation permanently enjoined.”
The brutal slapdown came from one of Trump’s own appointees: Judge Timothy Reif, who was nominated by the president to the federal trade court in 2018. He heard the cases alongside Judge Jane Restani, a Reagan appointee, and Judge Gary Katzmann, an Obama nominee.
White House spokesman Kush Desai insisted that foreign nations’ “nonreciprocal treatment” of the U.S. triggered the need for tariffs.
“These deficits have created 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,” he told the Daily Beast in a statement. “It is not for unelected judges to decide how to properly address a national emergency.”
The court pointed out, however, that the separation of powers between the legislative and executive branches make it unconstitutional for Congress to delegate “unbounded tariff power” to the president.
“An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government,” the judges wrote. “Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”
The New York-based court issued a unanimous ruling in two separate cases filed against Trump’s tariffs by the nonprofit Liberty Justice Center and 12 Democratic attorneys general.
Jeff Schwab from the Liberty Justice Center told CNN’s The Source with Kaitlan Collins that they were “delighted” by the decision and said they were “very confident” that they would prevail even if the Trump administration brings the matter up to the Supreme Court.
“Obviously this is a very, very important case, not only because of the tremendous economic impact that it has on everybody… but also because of the tremendous power grab that the administration is claiming here,” he said. “When Congress delegates that authority to the president, he can’t just assert unlimited authority to tariff whenever he wants.”
The ruling also covered the 25 percent “fentanyl tariffs” that Trump imposed on imports from Canada and Mexico in February in a bid to combat the flow of drugs across the border.
“There is no such association between the act of imposing a tariff and the ‘unusual and extraordinary threat[s]’ that the Trafficking Orders purport to combat,” the judges said, adding that the collection of levies on lawful imports “does not evidently relate” to foreign governments’ efforts to apprehend bad actors.
Stock futures rallied on the court ruling. Dow futures rose by 465 points or 1.1 percent, S&P 500 futures shot up 1.5 percent, and the tech-heavy Nasdaq futures surged by almost 400 points or 1.9 percent in after-hours trading.
The decision came hours after Trump went on a lengthy rant after learning that Wall Street had generated an acronym mocking his on-again, off-again tariff rollout: TACO, or Trump Always Chickens Out.
“Don’t ever say what you said. That’s a nasty question,” Trump told a reporter who asked him about the acronym. “I usually have the opposite problem. They say I am too tough.”
Author: Julia Ornedo