On Friday, a federal appeals court invalidated President Trump’s use of emergency powers given by Congress to impose tariffs, potentially leading to the repayment of billions of dollars worth of penalties by the government.
The 7-4 decision casts doubt on the agreements that Trump has made with key trade partners to lower the “reciprocal” tariff rates on their imports from the levels that the administration initially established in April. These agreements include the European Union, Japan, South Korea, and others.
With their broad executive orders, Trump imposed tariffs something Congress did not provide him the authority to do, the majority said.
Furthermore, the decision nullifies the tariffs that Trump had slapped on Canada, Mexico, and China in an effort to deter the import of fentanyl and precursor chemicals into the US.
But the Trump administration has until October 14 to file an appeal with the Supreme Court, so the ruling won’t be final until then.
Trump posted on social media on Friday night, labeling the verdict as “highly partisan,” and threatening that the country would face “a total disaster for the Country” and “make us financially weak” if the tariffs were found to be unlawful. Although the White House did not immediately react to a request for comment, Trump did repost the tweet.
“Now that the United States Supreme Court is on our side, we can put their power to work for our country and restore America’s prosperity, strength, and strength!” In his letter, Trump, as predicted, indicated that the Trump administration will file an appeal.
Trump overstepped his authority under the 1977 law he used to impose the fentanyl trafficking tariffs and his worldwide tariffs, the International Emergency Economic Powers Act, according to a May ruling by the U.S. Court of International Trade, which was upheld by the U.S. Court of Appeals for the Federal Circuit.
In its decision, the majority stated, “We are not addressing whether the President’s actions should have been taken as a matter of policy.” This decision came in response to a combined set of cases filed by several small importers and many states ruled by Democrats. We are also not making a determination on whether or not IEEPA permits tariffs. However, the sole question that we address in this appeal is whether the Reciprocal Tariffs and Trafficking Tariffs that were imposed by the Challenged Executive Orders are permitted under IEEPA. Finally, we’ve decided they aren’t.
Reimbursements, according to trade and customs experts who spoke with HEADLINESFOREVER, would be extremely difficult to implement and would probably lead to a flood of lawsuits from other companies and trade associations demanding payment.
The majority of the appeals court argued that a string of Supreme Court rulings outlining the “major questions doctrine”—a legal principle that rejects assertions that Congress implicitly granted the president vast powers—bolstered its finding that Trump’s tariffs were illegitimate.
“The tariffs at issue in this case implicate the concerns animating the major questions doctrine as they are both ‘unheralded’ and ‘transformative,'” stated the majority, which included one Republican appointee and six Democratic appointees.
Richard Taranto, Raymond Chen, Kimberly Moore, and Sharon Prost—all appointments of Obama and Bush, respectively—dissented from Friday’s decision. No judges for the Federal Circuit Court of Appeals have been nominated by Trump.
“IEEPA embodies an eyes-open congressional grant of broad emergency authority in this foreign-affairs realm, which unsurprisingly extends beyond authorities available under non-emergency laws. Congress confirmed the understood breadth by tying IEEPA’s authority to particularly demanding procedural requirements for keeping Congress informed,” Taranto wrote for the dissenters.
When asked for response, the White House took some time to answer.
Not long after becoming office, Trump wasted no time imposing tariffs on China, Canada, and Mexico in response to fentanyl trafficking, using the international emergency legislation as an excuse. Following this, he used his power to levy a 10% duty on nearly all countries and a 50% extra charge on dozens of specific trading partners, including all 27 EU member states.
In spite of its frequent usage to inflict economic sanctions on other nations over the last half-century, no president has ever utilized the 1977 legislation to impose tariffs.
The large number of fentanyl-related deaths, according to Trump, constitutes a national emergency that justifies the imposition of taxes on goods imported into the United States from China, Canada, and Mexico.
To further drive some trading partners into discussing trade accords, he claimed that the “large and persistent” U.S. trade imbalance constituted a national emergency, which allowed him to impose a wider range of “reciprocal” tariffs on the majority of nations.
Approximately $107 billion in customs duties were received by the Trump administration from February to July of this year, according to figures from the Treasury Department. Quite a bit of it consists of tariffs that Trump has levied under IEEPA, but it also incorporates other U.S. levies that are unaffected by the decision of the appeals court, including some that Trump has imposed through other means.
The courts have also begun hearing arguments in another lawsuit against the levies.
Trump lacked the jurisdiction to apply tariffs under the International Economic Emergency Powers Act, according to a May 29 ruling by a federal district court in Washington, D.C., in a lawsuit brought by two toy firms from Illinois.
This went above and beyond what the Court of International Trade had previously determined, which had stated that while the statute of 1977 did grant Trump some tariff authority, it was not “unlimited.”
Oral arguments are set to take place in late September before the D.C. Circuit Court of Appeals, after the Justice Department challenged the decision in the toy firms’ case.