The US Court of International Trade ruled on Wednesday that former President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose comprehensive tariffs on goods from multiple countries exceeded the president’s authority and violated the trade regulatory powers granted to Congress by the Constitution, and issued a permanent ban. The ruling required the government to issue a new order within 10 days, and the Trump team promptly filed an appeal.
The court pointed out that Trump’s imposition of tariffs on the grounds of a “national emergency” lacks legal basis. The IEEPA aims to address national security threats rather than trade deficit issues. The ruling did not cover specific tariffs on industries such as steel and aluminum, but rejected all comprehensive tariff orders based on the IEEPA that had been in place since January.
Industry and market influence. Insurance industry rating agency AM Best has warned that tariffs could lead to a downgrade of insurance companies’ credit ratings and push up costs such as auto insurance and property insurance. After the financial market ruling was announced, the US dollar strengthened, Asian stock markets rose across the board, and Wall Street futures moved upward. The ruling was made possible by lawsuits filed by 12 states and several small businesses in response to importers’ claims that tariffs have harmed their operations.
The White House criticized the ruling for “ignoring the damage of the trade deficit to the economy”, emphasizing that “the state of national emergency should be decided by the executive branch”. Analysts believe that if the ruling takes effect, the Trump administration will need to seek other legal means to pressure its trading partners. However, Goldman Sachs pointed out that tariffs on specific industries and bilateral negotiations can still continue.
South Korea expects its export tariff rate to be reduced from 13.3% to 9.7%. Hong Kong officials said the ruling “might prompt Trump to return to rationality”. Japan, the European Union and others are assessing the potential impact on trade negotiations.
This case may be appealed to the Federal Circuit Court and even the Supreme Court, and the final outcome will reshape the trade policy authority of the US President.
Related Topic:
