Trump’s Tariff Agenda Faces Uncertainty After Conflicting Court Decisions
Recent court decisions have created uncertainty around Donald Trump’s key economic policy, initially suspending his tariffs before allowing them to be reinstated, at least for now.
Here’s a breakdown of the current legal situation and possible future developments.
What have the courts ruled?
Trump secured a victory on Thursday when a federal appeals court sided with his administration, temporarily overturning a Wednesday night ruling by the U.S. Court of International Trade. This allows his tariffs to remain in effect for the time being.
The trade court’s three-judge panel had previously determined that the President’s authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA) is not unlimited. This 1977 law, which Trump used to justify tariffs on nearly all countries due to national emergencies related to fentanyl and trade deficits, permits the President to manage economic transactions during national emergencies, such as “unusual and extraordinary threats” to the economy, foreign policy, or national security.
The initial ruling had stopped a 30% tariff on Chinese goods, a 25% tariff on specific items from Mexico and Canada, and a standard 10% tariff on goods from most other countries. However, it did not affect import taxes on steel, aluminum, or automobiles, which Trump had implemented under a different legal provision.
The Administration quickly appealed, and the subsequent decision on Thursday to grant their emergency request has temporarily restored the suspended tariffs while the appeals court reviews the case.
Adding to the complex situation, a federal judge issued a separate ruling earlier on Thursday, preventing the Trump Administration from collecting tariffs imposed under IEEPA from two educational toy companies based in Illinois. However, this injunction has been temporarily paused for two weeks, and the Administration has appealed this decision as well.
What comes next?
The future of Trump’s tariffs remains uncertain. The appeals court has instructed the plaintiffs, a group of U.S. businesses impacted by the tariffs, to respond to the federal government’s request to halt the trade court’s ruling by June 5. The federal government must then provide its response by June 9.
The appeals process could potentially escalate to the Supreme Court, where the Trump Administration had previously indicated it would seek “emergency relief” if the lower court did not reinstate the President’s tariff powers.
Several other lawsuits have also challenged the tariffs Trump imposed under IEEPA.
Prior to the reinstatement of the blocked tariffs, White House Press Secretary Karoline Leavitt informed reporters at a press briefing on Thursday that the President has “other legal authorities” at his disposal to impose import taxes on foreign nations.
While Leavitt did not elaborate, the U.S. Court of International Trade itself cited another law in its ruling that grants the President limited tariff-imposing authority. Section 122 of the Trade Act of 1974, it noted, permits the President to impose tariffs of up to 15% for a maximum of 150 days in response to “fundamental international payment problems,” including “large and serious balance-of-payments deficits” and unfair trade practices.
Trump has previously utilized other laws to implement import taxes during both of his terms. For example, his steel, aluminum, and auto tariffs are based on his authority under Section 232 of the Trade Expansion Act of 1962, which authorizes the President to impose tariffs in response to national security threats.
“`