US Court Blocks Trump Tariffs, Rejects "India-Pak Ceasefire" Argument

A US trade court on Wednesday blocked Donald Trump's 'Liberation Day' import tariffs from going into effect, ruling that the President overstepped his authorities with the across-the-board duties on countries that sell more to the United States than they buy. The American Commander in Chief has claimed broad authority to set global tariffs under the International Emergency Economic Powers Act (IEEPA), which is meant to address "unusual and extraordinary" threats during a national emergency. 

The Trump administration urged a court to uphold the tariff power, saying the legal setback could change the course of an “asymmetric” trade truce with China and revive the India-Pakistan conflict. Officials claimed that Trump used his tariff power to broker a ceasefire between India and Pakistan earlier in May, after both nuclear-powered neighbours were involved in a conflict following a terror attack by Pakistan-based terrorists in Jammu and Kashmir's Pahalgam on April 22.

They told the court that trade negotiations regarding tariffs were underway with several countries, and the issue remains in a “delicate state” with July 7 as the deadline to finalise the trade deals.

What The Court Said

Rejecting all arguments, the Manhattan-based three-judge Court of International Trade ruled that Congress did not delegate "unbounded" powers to the President under IEEPA. It only authorises the president to impose necessary economic sanctions during an emergency "to combat an unusual and extraordinary threat," the bench said.

The court in its ruling said the US Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the President's emergency powers, to safeguard the American economy.

"The court does not pass upon the wisdom or likely effectiveness of the President's use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it," the court said in the decision.

"An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government," it ruled in an unsigned opinion.

The court said that any interpretation of the IEEPA that "delegates unlimited tariff authority is unconstitutional," according to court documents.

Trump cited the law when Trump said trade deficits and the threat posed by Mexican drug cartels justified widespread tariffs.

The Trump administration filed a notice of appeal soon after the ruling came out.

Trump Tariffs

The American commander-in-chief unveiled sweeping tariffs on the United States' most trading partners on April 2 with a 10 per cent baseline, and higher rates for countries with which the United States has the largest trade deficits, particularly China and the European Union. 

Many of those country-specific tariffs were paused a week later after the levies intended to restore US manufacturing capability shocked US financial markets.

The Trump administration on May 12 said it was also temporarily reducing the steepest tariffs on China while working on a longer-term trade deal. Both countries agreed to cut tariffs on each other for at least 90 days.

Cases Against the Trump Administration

The ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Centre on behalf of five small US businesses that import goods from countries targeted by the duties and the other by 13 US states. The companies have said the tariffs will hurt their ability to do business.

Moreover, at least five other legal challenges to the tariffs are pending in courts.

Trump Administration's Response

The White House and lawyers for groups that sued did not immediately respond to requests for comment. Stephen Miller, a White House deputy chief of staff and one of Trump's lead policy advisers, rebuked the court in a brief social media post, writing: "The judicial coup is out of control."