New Turn in the Trade War
The International Court of Commerce blocked the imposition of global commercial tariffs by President Donald Trump, stating that an emergency law invoked by the White House did not give the president unilateral authority to impose tariffs on almost all countries of the world.
The Court, based in New York, states that the United States Constitution has given the Congress exclusive powers to regulate trade with other nations.
Minutes after the decision was known, the Trump administration announced that it had filed an appeal.
How did this court decision come about?
The United States International Trade Court is a federal court in Manhattan that deals with litigation of customs and international trade laws.
The decision was taken in response to two lawsuits. The Liberty Justice Center, a non -party organization, filed a lawsuit on behalf of several small companies that imports goods from the rates aimed at the rates, while a US state coalition has also contested import rates.
A panel of three judges has ruled that the Law of International Emergency Economic Powers (IEEPA), a 1977 law that Trump quoted to justify the tariffs, does not give him the power to impose comprehensive import rates.
“Ieepa does not authorize any of the world’s tariff orders, retaliatory or trafficking,” said the judges panel in a order revealed Wednesday. “World and retaliatory tariff orders exceed any authority granted to the President” by this law.
Justice Department lawyers have argued that tariffs are a political issue – which means that it is something the courts cannot decide. But the complainants observed that Ieepa makes no mention of tariffs.
“If the biggest trade war has started since large depression based on a law that does not even mention rates is not an unconstitutional usurpation of the Legislature, I don’t know what it will be,” said Ilya Somin, Professor of Law at Scalia Law School at George Mason University and complainant lawyer.
What tariffs will be suspended?
The White House has 10 days to complete the bureaucratic process of suspension of tariffs, although most are currently suspended.
The order suspends the 30% rates imposed by Trump on China, 25% tariffs on some property imported from Mexico and Canada – in response to what management said is the unacceptable flow of drugs and illegal immigrants for the US and 10% universal rates on most goods entering the United States.
However, the court was not called upon to pronounce on 25% tariffs imposed on some specific goods, such as cars, steel and aluminum, which are covered by a different law and will therefore not be affected.
What happens now?
The case has to go through the appeal process. The immediately higher court is the federal circuit, although the case may potentially go directly to the Supreme Court.
Therefore, for now, and according to an expert, there will be no changes in borders and customs rights have to continue to be paid.
If the White House is not successful in its appeal, the US Border Customs Agency (CBP) will then issue new instructions.
A higher court may be more favorable to Trump. But if all courts confirm the decision, companies that have to pay customs rights will receive the reimbursement of the amounts paid, with interest.
Financial markets, in general, applauded the court’s decision. The US dollar recovered, rising in currencies such as the euro, yen and Swiss Franco, in particular.
