A major setback for the US President: A federal court has blocked Donald Trump's tariff policy and repealed almost all of the tariff surcharges he imposed. Trump exceeded his authority by invoking a 1977 emergency law, according to the ruling by the US Trade Court, published on Wednesday (local time) and seen by the news agency AFP. Any interpretation of the law "providing for an unlimited transfer of tariff powers" is "unconstitutional." The US government has appealed the ruling.
Trump cannot invoke a 1977 emergency tariff law to "impose an unlimited surcharge on goods from virtually any country," ruled the three judges at the Court of International Trade (ITC), which adjudicates civil cases related to trade disputes. According to them, Congress did not grant the president "unlimited" powers with the emergency tariff law. "An unlimited transfer of tariff authority would constitute an improper delegation of legislative power to another branch of government."
While the judges did not question the general ability of the United States to increase surcharges on imports with their decision, they believe that the prerogative to do so lies exclusively with Congress. The International Emergency Economic Powers Act of 1977 only authorizes the president to impose appropriate economic sanctions in an emergency "to combat an unusual and extraordinary threat," the court documents continued.
The US government intends to legally challenge the court's lifting of its planned reciprocal tariffs. The defendants will "appeal to the US Court of Appeals," government lawyers stated in a court document seen by AFP. The court had given the White House ten days to complete the bureaucratic process for lifting the tariffs.
In an initial reaction, the White House attacked the judges for their decision. It criticized the ruling, arguing that it is "not for unelected judges" to decide "how to appropriately handle a national emergency." President Trump has promised to "put America first," said administration spokesman Kush Desai. The administration is "determined to use every lever of executive power to address this crisis and restore America's greatness."
One of Trump's closest White House aides, his advisor Stephen Miller, was even more explicit. He spoke online of a "judicial coup" that, in his opinion, had spiraled "out of control." According to Congressman Gregory Meeks, senior Democrat on the Committee on International Relations, the ruling confirms that the tariffs are "an illegal abuse of executive power."
Trump imposed high additional tariffs on numerous countries at the beginning of April, but shortly thereafter reduced them to a base tariff of 10 percent for 90 days. In addition, US tariffs of 25 percent apply to cars, as well as steel and aluminum products.
When announcing the tariffs on April 2, the day he proclaimed "Liberation Day," Trump invoked the International Emergency Economic Powers Act of 1977. On Friday, Trump also threatened tariffs of 50 percent on imports from the European Union as early as June. After a phone call with EU Commission President Ursula von der Leyen, he granted a delay until July 9.
Trump's tariff policy had roiled financial markets worldwide. Following the court ruling, Asian stock markets were already beginning to ease tensions on Thursday. European stock markets also indicated price gains. Japan's Minister for Economic Revitalization, Ryosei Akazawa, announced that he would review the court's decision. He traveled to Washington for a fourth round of talks on a possible trade agreement.
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