Trump Tariffs Challenged

President Trump’s tariff strategy took a legal hit Wednesday only to gain new life Thursday.

The United States Court of International Trade blocked reciprocal tariffs unilaterally imposed by President Trump in April. Twin complaints were filed by a group of small business owners who cited they were being harmed financially by the tariffs, and states controlled by Democrats.  

But an appeals court held up the Trump tariff plan late this week and likely ensures the case will eventually be heard by the Supreme Court for another legal battle.

The three judge panel stated that the International Emergency Economic Powers Act, which became law in 1977, does not authorize a president to levy universal duties on imports. 

Traditionally, one judge hears cases like these, but given the case’s constitutionality basis, three judges heard the arguments. The judges were nominated by Presidents Reagan, Obama and Trump. The panel ordered a halt to the tariffs at issue, and also blocked future changes to them. 

The tariffs, which were announced on April 2, covered virtually every nation on earth and ranged from 11% to 84%.

The judges did not see a connection between tariffs and the emergency of drug trafficking that President Trump was using as justification. Congress traditionally approves changes in tariffs. The White House does have other means of potentially maintaining its tariff plans.

The trade deal reached with the UK earlier in May would be null and void if the court’s ruling stands. Earlier this week, Trump moved back the date to reach a larger agreement with the EU to July 9.

The White House believes it would win an appeal of the ruling before the United States Supreme Court.

For Market to Market, I’m Peter Tubbs.