President Trump has claimed the right to impose substantial tariffs on foreign goods, arguing they are essential to boost the U.S. economy. However, a federal appeals court has now challenged this power.
The U.S. Court of Appeals for the Federal Circuit ruled that Trump overstepped his authority by declaring national emergencies to justify tariffs on nearly all trading partners. This ruling stands alongside a previous decision from a New York trade court, creating a significant hurdle for Trump’s trade agenda, which he believes will not only revive manufacturing jobs but also generate billions in new federal revenue.
Nigel Green, CEO of deVere Group, stated that this ruling poses a serious legal challenge to one of Trump’s prominent economic policies.
In response, Trump criticized the decision in a post on Truth Social, labeling the court “Highly Partisan” and pointing out that the tariffs remain in effect. Notably, all but one of the judges who ruled against him were appointed by Democratic presidents.
The legal struggle began when Democratic states and small businesses challenged the tariffs, arguing Trump had overreached his powers. The tariffs imposed in April included reciprocal tariffs of up to 50% on countries with which the U.S. has trade deficits, alongside 10% tariffs on many others.
Trump justified these tariffs under the International Emergency Economic Powers Act (IEEPA), declaring trade deficits a national emergency. Historically, Congress has the power to set tariffs, but presidents have gradually gained more authority in this area. The appeals court’s ruling emphasized that Congress likely did not intend to grant the president unchecked power over tariffs.
While this ruling doesn’t affect all of Trump’s tariffs—such as those on steel and aluminum—future actions may be limited. For instance, other laws could restrict how and how quickly tariffs can be applied.
According to the U.S. Treasury, tariffs collected amounted to $159 billion by July, more than double the previous year. However, if these tariffs are revoked, importers may have to refund some taxes, impacting U.S. revenue. Higher prices for consumers are often a direct result of these added costs.
Experts suggest that if Trump’s tariffs are lifted, it could weaken his negotiating stance in trade discussions. Ashley Akers, a legal expert, mentioned that the administration could lose leverage with foreign governments, impacting the effectiveness of future negotiations.
Despite these challenges, Trump still has legal avenues to impose tariffs. However, they would be less immediate and less impactful than his previous strategies. Green believes the administration will continue to seek ways to impose taxes on imports, highlighting the ongoing complexities of U.S. trade policies.
For more information on the court’s decision, refer to sources like the U.S. Court of Appeals and the U.S. Department of Commerce.
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Tariffs, Donald Trump
