New York (Reuters)-A United States Court of Appeals has ruled on Friday that most Donald Trump rates are illegal, damaging the use of fees by Republican President as an important international economic policy tool.
Trump turned tariffs into a US foreign policy pillar in his second term, using them to exercise political pressure and renegotiate trade agreements with countries that export products to the US.
Tariffs gave the Trump government an advantage to extract economic concessions from business partners, but also increased volatility in financial markets.
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The decision of the US Appeals Court to the Federal Circuit in Washington addressed the legality of what Trump calls “reciprocal” tariffs imposed as part of his trade war in April, as well as a separate set of tariffs imposed in February against China, Canada and Mexico.
The court’s decision does not affect the rates issued under another legal authority, such as Trump’s tariffs on steel and aluminum imports.
It is widely expected that there is an appeal on this case to the US Supreme Court.
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Trump justified the two sets of tariffs – as well as the latest tariffs – based on the International Emergency Economic Powers Law. IEEPA gives the president the power to deal with “unusual and extraordinary” threats during national emergencies.
The 1977 law has been historically used to sanction enemies or freeze their goods. Trump, the first president to use IEEPA to impose tariffs, says the measures were justified due to commercial imbalances, the decline in US manufacturing power and drug transfronhetic flow.
The law does not mention rates, although it allows the president to take a wide range of measures in response to a crisis. Trump’s Department of Justice argued that the law allows tariffs according to emergency provisions authorizing the president to “regulate” imports or block them completely.
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Trump declared a national emergency in April because the US imports more than exports, as the country has done for decades. Trump said the persistent commercial deficit was damaging the capacity of the US military manufacturing and readiness. Trump said February fees against China, Canada and Mexico were appropriate because these countries were not doing enough to prevent the illegal fentanil from crossing US borders, an allegation that countries denied.
The Court of Appeals has ruled on two cases, one presented by five small US companies and the other by 12 US states led by the Democrats, who argued that IEEPA does not authorize tariffs.
The Constitution grants Congress, not the President, the authority to issue taxes and tariffs, and any delegation of that authority must be explicit and limited, in accordance with lawsuits.
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The New York -based US International Trade Court decided against Trump’s tariff policies on May 28, stating that the president had exceeded his authority when imposed the two sets of contested tariffs. The panel of three judges included a judge who was appointed by Trump in his first term.
Another court in Washington has ruled that IEEPA does not authorize Trump’s fares, and the government also appealed that decision. At least eight lawsuits contested Trump’s tariff policies, including one of California.
