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US federal court blocks Trump from imposing sweeping tariffs US federal court blocks Trump from imposing sweeping tariffs
(about 5 hours later)
Ruling from court of international trade in New York comes after slew of lawsuits arguing president exceeded authorityRuling from court of international trade in New York comes after slew of lawsuits arguing president exceeded authority
A federal trade court on Wednesday blocked Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law. A US trade court has ruled Donald Trump’s sweeping tariffs regime illegal, in dramatic twist that could block the US president’s controversial global trade policy.
The ruling from a three-judge panel at the New York-based court of international trade came after several lawsuits arguing Trump has exceeded his authority, left US trade policy dependent on his whims and unleashed economic chaos. The ruling by a three-judge panel at the New York-based court of international trade came after several lawsuits argued that Trump had exceeded his authority, leaving US trade policy dependent on the president’s whims and unleashing economic chaos around the world.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court wrote, referring to the 1977 International Emergency Economic Powers Act. Tariffs typically need to be approved by Congress but Trump has so far bypassed that requirement by claiming that the country’s trade deficits amounted to a national emergency. It left the US president able to apply sweeping tariffs to most countries in the world last month, in a shock move that sent markets reeling.
“The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it,” a three-judge panel said in the decision. The court’s ruling stated that Trump’s tariff orders “exceed any authority granted to the president … to regulate importation by means of tariffs”.
The Trump administration has reportedly filed a notice of appeal, and White House officials responded to the ruling with public statements challenging the court’s authority in the case.. Judges were keen to state that they were not passing judgment on the “wisdom or likely effectiveness of the president’s use of tariffs as leverage.” Instead, their ruling centred on whether the trade levies had been legally applied in the first place. Their use is “impermissible not because it is unwise or ineffective, but because [federal law] does not allow it,” the decision explained.
“It is not for unelected judges to decide how to properly address a national emergency,” Kush Desai, a White House spokesperson, said in a statement to Reuters. Financial markets cheered the court’s ruling, with the US dollar rallying in its wake, surging against the euro, yen and Swiss franc. Stocks in Asia also climbed on Thursday, while US futures pointed to a jump in Wall Street-listed shares.
Financial markets, in contrast, cheered the ruling. The US dollar rallied following the court’s order, surging against currencies such as the euro, yen and the Swiss franc in particular. Wall Street futures rose and equities across Asia also rose. The Trump administration reportedly plans to appeal against the ruling, while White House officials have hit out at the court’s authority..“It is not for unelected judges to decide how to properly address a national emergency,” Kush Desai, a White House spokesperson, said in a statement to Reuters.
The ruling, if it stands, blows a giant hole through Trump’s strategy to use steep tariffs to wring concessions from trading partners, draw manufacturing jobs back to US shores and shrink a $1.2tn US goods trade deficit, which were among his key campaign promises. But the ruling, if it stands, blows a giant hole through Trump’s strategy to use steep tariffs to wring concessions from trading partners, draw manufacturing jobs back to US shores and shrink a $1.2tn (£892tn) US goods trade deficit, which were among his key campaign promises.
Without the instant leverage provided by the tariffs of 10% to 54% that Trump declared under the IEEPA, which is meant to address “unusual and extraordinary” threats during a national emergency, the Trump administration would have to take a slower approach of lengthier trade investigations under other trade laws to back its tariff threats. Without the help of the international emergency powers act (IEPPA), the Trump administration would have to take a slower approach, launching lengthier trade investigations and abiding by other trade laws to back the tariff threats.
The decisions of the Manhattan-based court of international trade, which hears disputes involving international trade and customs laws, can be appealed to the US court of appeals for the federal circuit in Washington DC, and ultimately the US supreme court. Any legal challenge to the ruling will have to be heard atthe US court of appeals for the federal circuit in Washington DC, and ultimately the US supreme court.
At least seven lawsuits are challenging the levies, the centerpiece of Trump’s trade policy. Tariffs must typically be approved by Congress, but Trump says he has the power to act because the country’s trade deficits amount to a national emergency. He imposed tariffs on most of the countries in the world at one point, sending markets reeling. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium, using a different statute, so these are likely to remain in place for now.
The plaintiffs argued that the emergency powers law does not authorize the use of tariffs, and even if it did, the trade deficit does not meet the law’s requirement that an emergency be triggered only by an “unusual and extraordinary threat.” The US has run a trade deficit with the rest of the world for 49 consecutive years. Stephen Miller, the White House deputy chief of staff for policy, hit out at the ruling with on media post claiming “the judicial coup is out of control”.
Trump imposed tariffs on most of the countries in the world in an effort to reverse America’s massive and longstanding trade deficits. He earlier plastered levies on imports from Canada, China and Mexico to combat the illegal flow of immigrants and the synthetic opioids across the US border. Trump did not immediately post a response on Truth Social. Instead, he posted about what he characterised as a favourable ruling in another lawsuit, in which he is suing the Pulitzer board, which awards the US’s most prestigious journalism prizes.
His administration argues that courts approved then president Richard Nixon’s emergency use of tariffs in 1971, and that only Congress, and not the courts, can determine the “political” question of whether the president’s rationale for declaring an emergency complies with the law. At least seven lawsuits have challenged Trump’s border taxes, the centrepiece of Trump’s trade policy.
Trump’s “liberation day” tariffs shook global financial markets and led many economists to downgrade the outlook for US economic growth. So far, though, the tariffs appear to have had little impact on the world’s largest economy. Sign up to Business Today
While Stephen Miller, the White House deputy chief of staff for policy, greeted the news of the ruling with a public social media post claiming “the judicial coup is out of control”, Trump did not immediately post a response on Truth Social. He responded on his platform instead to what he characterized as a favorable ruling in another lawsuit, in which he is suing the Pulitzer board, which awards America’s most prestigious journalism prizes. Get set for the working day – we'll point you to all the business news and analysis you need every morning
The tariffs lawsuit was filed by a group of small businesses, including a wine importer, VOS Selections, whose owner has said the tariffs are having a major impact and his company may not survive. after newsletter promotion
A dozen states also filed suit, led by Oregon. The court made its ruling in response to two cases. One was filed by a group of small businesses, including a wine importer, VOS Selections, whose owner has said the tariffs are having a major impact and his company may not survive.
“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Oregon attorney general Dan Rayfield said. The other was filed by a dozen US states, led by Oregon. “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” the Oregon attorney general, Dan Rayfield, said.
The plaintiffs in the tariff lawsuit argued that the emergency powers law does not give the president the power to apply tariffs, and even if it did, the trade deficit does qualify as an emergency, which is defined as an “unusual and extraordinary threat”. The US has run a trade deficit with the rest of the world for 49 consecutive years.
Trump imposed tariffs on most countries around the world in an effort to reverse the US’s massive and longstanding trade deficits. He also targeted imports from Canada, China and Mexico, claiming it was meant to combat the illegal flow of immigrants and the synthetic opioids across the US border.
His administration pointed to the court’s approval of the former president Richard Nixon’s emergency use of tariffs in 1971, and claimed that only Congress, and not the courts, could determine the “political” question of whether the president’s rationale for declaring an emergency complied with the law.
Trump’s “liberation day” tariffs shook global financial markets and led many economists to downgrade the outlook for US economic growth. So far, though, the impact of tariffs on the US economy has yet to be felt by consumers.
Reuters and the Associated Press contributed reportingReuters and the Associated Press contributed reporting