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A federal court has permanently blocked tariffs that President Donald Trump has imposed on nearly all imports into the US, finding his unilateral deployment of tariffs exceeded the authority provided by the US Congress.
The US Court of International Trade, in a sweeping ruling, said it was throwing out tariffs that Trump has imposed on nearly every country under a 1977 law called the International Emergency Economic Powers Act (IEEPA). The court said that law did not offer the president "unbounded authority" to impose tariffs, a power that Trump had used to impose tariffs that reached as high as 145pc on China and 10pc on nearly every country.
"The challenged tariff orders will be vacated and their operation permanently enjoined," the court wrote tonight in a 49-page ruling.
The court's decision means all tariffs imposed under the IEEPA law will be immediately cancelled, at least until the Trump administration formally appeals the ruling. This covers the blanket tariffs imposed on almost all countries in April, as well as the bilateral tariffs imposed on China in February and March. It does not affect tariffs that Trump has imposed citing the US trade legislation, rather than emergency powers, such as the levies on imports of steel, aluminium and auto parts.
The Trump administration filed a notice that it was appealing the decision to the US Court of Appeals for the Federal Circuit. Asked for comment, the White House reiterated its argument that persistent US trade deficits have "decimated" local communities and created a national emergency that the tariffs were meant to address.
"It is not for unelected judges to decide how to properly address a national emergency," the White House said. "President Trump pledged to put America First, and the administration is committed to using every lever of executive power to address this crisis and restore American Greatness."
Trump had imposed his "Liberation Day" tariffs on 2 April on nearly every country in the world — with tariff rates of 10-50pc that he later cut to 10pc — by citing emergency authorities to deal with trade imbalances. He subsequently imposed additional tariffs on China when it responded in kind. But the court said that Congress explicitly required the use of non-emergency tariffs to respond to trade imbalances, meaning Trump's actions exceeded his authority.
The court also threw out separate emergency tariffs that Trump had imposed on Mexico, Canada and China he said were in response to the threat of trafficking of the drug fentanyl into the US. Trump had exceeded his authority with the trafficking tariffs because they did not meet a statutory requirement to "deal with" the trade threat, the court said, but instead were meant to create "leverage" for those countries to crack down on drug trafficking.
"The government's reading would cause the meaning of 'deal with an unusual and extraordinary threat' to permit any infliction of a burden on a counterparty to exact concessions, regardless of the relationship between the burden inflicted and the concessions enacted," the court wrote.
Trump has come to relish his use of tariffs, which he has imposed and retracted repeatedly while trying to extract concessions from countries around the world. Earlier today, Trump said he had used a strategy to set a "ridiculous high number" for tariffs, such as the 145pc tariff on China, and then reduce it as part of a "negotiation." Trump recently delayed plans to impose a 50pc tariff on all European goods.
Oil futures rose after the court ruling was announced. July Ice Brent rose by 85¢/bl or 1.3pc to $65.75/bl in early Asian trading. July Nymex WTI increased by 88¢/bl or 1.4pc to $62.72/bl.
