A US appeals court has ruled that most tariffs issued by US President Donald Trump are illegal, potentially removing a foreign policy tool that Trump has used extensively during his second term in office. The ruling affects Trump's 'reciprocal' tariffs, imposed on most countries around the world, as well as other tariffs slapped on China, Mexico, and Canada.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit rejected Trump's argument that the tariffs were permitted under his emergency economic powers act, calling them 'invalid as contrary to law.' The ruling will not take effect until 14 October to give the administration time to ask the Supreme Court to take up the case.
Trump justified the tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president the power to act against 'unusual and extraordinary' threats. However, the court found that imposing tariffs is not within the president's mandate, stating these are 'a core Congressional power.'
The court emphasized that the IEEPA 'neither mentions tariffs nor has procedural safeguards that contain clear limits on the President's power to impose tariffs.' This reinforces the ruling that Congress maintains the authority to impose taxes and tariffs.
The ruling follows two lawsuits filed by small businesses and a coalition of US states challenging Trump's executive orders that imposed a 10% tariff on every country worldwide, which Trump claimed were necessary to rectify unfair trade policies. This ruling does not impact tariffs on steel and aluminum, which were imposed under a different authority.
The legal landscape for tariffs in the US may be shifting, marking a new chapter in international trade relations.
In a 7-4 decision, the US Court of Appeals for the Federal Circuit rejected Trump's argument that the tariffs were permitted under his emergency economic powers act, calling them 'invalid as contrary to law.' The ruling will not take effect until 14 October to give the administration time to ask the Supreme Court to take up the case.
Trump justified the tariffs under the International Emergency Economic Powers Act (IEEPA), which gives the president the power to act against 'unusual and extraordinary' threats. However, the court found that imposing tariffs is not within the president's mandate, stating these are 'a core Congressional power.'
The court emphasized that the IEEPA 'neither mentions tariffs nor has procedural safeguards that contain clear limits on the President's power to impose tariffs.' This reinforces the ruling that Congress maintains the authority to impose taxes and tariffs.
The ruling follows two lawsuits filed by small businesses and a coalition of US states challenging Trump's executive orders that imposed a 10% tariff on every country worldwide, which Trump claimed were necessary to rectify unfair trade policies. This ruling does not impact tariffs on steel and aluminum, which were imposed under a different authority.
The legal landscape for tariffs in the US may be shifting, marking a new chapter in international trade relations.
