The aggressive tariff-imposing policy of US President Donald Trump has been closely watched by businesses, consumers, and nations.
In a high-stakes legal battle that will either endow a fundamental component of Trump’s economic policy or shut it off altogether, the courts will soon decide whether Trump has the authority to impose those tariffs.
According to the US Constitution, Congress, not the president, has the authority to impose tariffs. However, Congress has passed a number of laws over the years that have given the president some of that authority.
Trump cited the 1977 International Emergency Economic Powers Act, which allows tariffs on all imports when there is an “unusual and extraordinary threat… to the national security, foreign policy, or economy of the United States.” This is one of Trump’s most important assertions about tariff power.
In the case VOS Selections v. Trump, small businesses raise two important points. They contend that the president is not specifically permitted to impose tariffs. And they contend that neither of the two Trump tariffs, which are levied against a wide range of trading partners to address US trade deficits, nor do they rise to the level of an “unusual and extraordinary” emergency.
The US Court of Appeals for the Federal Circuit will hear the case’s oral arguments on Thursday, one day before Trump’s deadline for a number of new tariffs to go into effect. The Court of International Trade’s first round ended with a victory for the Trump administration in May. (That decision did not have an impact on proposed tariffs on pharmaceuticals and semiconductors, as well as tariffs on steel, aluminum, and cars. Trump used other legal bodies to impose these.
The Supreme Court will only consider the appeals court before the Supreme Court will likely consider the case.
How might this case impact Trump’s tariff policies, in essence:
The International Emergency Economic Powers Act permits tariffs, right?
The administration may have to prove whether the law permits the enactment of tariffs.
According to Meredith Kolsky Lewis, a law professor at the University at Buffalo, the law “authorises the president to take various actions,” without making any mention of “tariffs,” “dutys,” “ ,” “levies,” “taxes,” “imposts,” or any other similar wording. Before Trump, “no president has attempted to impose tariffs in accordance with the law.”
The administration’s strongest argument may be that, unlike the law, it doesn’t specifically authorise tariff measures, according to Rice University fellow in trade and international economics David A. Gantz. Some people have questioned whether the president was intended to veto the most fundamental Commerce Clause, but it seems like the statute has never been seriously challenged by repeal.
Does the situation right now qualify as emergency?
Are trade deficits a security threat, Trump might find more difficult to resolve?
Trump argued that “large and persistent annual US goods trade deficits constitute an unusual and extraordinary threat to the country’s security and economy.”
Kent Jones, an economist at Babson College, had reservations. He claimed that “people who have knowledge of trade economics scoff at the notion that a trade deficit is a national emergency.” Without a single instance of an economic emergency that can be systematically linked to the deficits, the US has consistently experienced trade deficits for the past four decades.
According to Lewis, the tariffs are being imposed on dozens of nations that ship more goods to the US than they import, which “suggests a lack of an ‘unusual’ threat.” This is commonplace, to put it another way.
Ross Burkhart, a political scientist with a focus on trade at Boise State University, said using fentanyl trafficking and trade deficits as examples of emergencies is novel.
The precedent set by previous administrations is not to invoke a national emergency based on day-to-day trade flows, according to Burkhart, despite the law’s “does not delineate what a national emergency is.”
In Brazil, there is an even more agressive argument.
According to legal experts, Trump’s threat of 50% levies on Brazil may have a thinner legal base.
Trump argued in a letter to Brazil’s president, Luiz Inacio Lula da Silva, that the new tariffs would be “due in part” to Brazil’s prosecution of former president Jair Bolsonaro and its treatment of US social media companies. A “very unfair trade relationship” between Brazil and was also mentioned in the letter.
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A 40% tariff was imposed after a week of effectiveness on Wednesday, as a result of Trump’s declaration of an emergency based in part on the Bolsonaro case.
According to experts, Trump’s justifications legally fall under the International Emergency Economic Powers Act. The case being litigated on Thursday doesn’t address the Brazil policy, but at least one lawsuit has already been brought against it.
Experts expressed doubts that a court case involving the Bolsonaro case would survive judicial scrutiny. After Lula won the 2022 election, Bolsonaro unsuccessfully sought to maintain control of the country, which sparked years of investigations and allegations that he might face prison sentences.
According to Gantz, “I and many others would concur that the Bolsonaro trial would not even be close to meeting” the international emergency economic powers act’s standard, even if it were questionable and it isn’t.
Trump’s letter undermines a significant aspect of US-Brazil trade: In 2024, the US had a $ 6.8 billion trade surplus with Brazil, as well as earlier surpluses.
Some US industries, including social media and electronic payment systems, may have a resemblance to Brazil’s trade policy. Even so, according to Gantz, “all of these grievances seem to me insufficient for action under the International Emergency Economic Powers Act.”
What follows?
The appeals court would have ample cause to follow the Court of International Trade’s lead and uphold Trump’s authority, according to the majority of the legal experts we spoke to. According to law professor Julian Arato, a University of Michigan law professor, “I’m quite confident that the law doesn’t grant the president unrestricted authority by using some magic words.”
The US Supreme Court will ultimately have the final say, so that outcome is a certainty. The administration should have a friendlier experience at the conservative-majority court.
The Supreme Court will likely do so, according to Gantz, if the appeals court doesn’t reverse the Court of International Trade’s decision.
And even if Trump were to appeal, other laws allowed him to impose tariffs.
He could rely on Section 301 of the 1974 Trade Act, which allows tariffs when the president believes a foreign country “burdens or restrains American commerce” as a result of a trade agreement violation. Presidents have repeatedly cited this authority.
Or he could rely on Section 232 of the Trade Expansion Act, which enables the president to impose tariffs when national security is threatened. Since then, Trump and former president Joe Biden have based their steel and aluminum tariffs on this.
Source: Aljazeera
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