Trump's Tariffs Declared Illegal: What's Next for U.S. Trade Policy?
A federal appeals court has ruled that most of Donald Trump's tariffs are an overreach of his use of emergency powers as president.
The so-called reciprocal tariffs - imposed on nearly every country the US trades with - are being illegally imposed, the US Court of Appeals said on Friday.
This decision upholds a ruling in May from the Court of International Trade, which also rejected Trump's argument that his global tariffs were permitted under an emergency economic powers act.
Affected tariffs derive from Trump’s April announcement of a flat 10% rate on imports aimed at correcting 'unfair' trade conditions.
The court did not halt the tariffs but allowed them to remain in place until mid-October, leading to a potential challenge in the US Supreme Court.
What did the appeals court say?
In its 7-4 decision, the appellate court backed a lower court's finding that Trump did not have the authority to impose global tariffs.
This was largely because of the law Trump used to justify the policies, the International Emergency Economic Powers Act (IEEPA), which the judges said did not grant 'the power to impose tariffs, duties, or the like, or the power to tax.'
Trump immediately criticized the judgment, branding the appeals court ‘highly partisan’ on Truth Social.
Why is this important?
The ruling signifies a crucial setback to Trump's agenda and stands to influence the U.S. economy significantly, potentially affecting global markets.
Tariffs, which are taxes imposed on imports, may deter companies from buying foreign goods, impacting international trade.
What happens next?
The case is likely to advance to the U.S. Supreme Court next, with Trump signaling this on Truth Social.
What if the tariffs are ruled illegal?
A successful appeal could introduce financial market uncertainty and raise questions regarding the refunding of billions collected under the tariffs.
