In a significant setback for former President Donald Trump, a US federal court has ruled that he overstepped his authority by imposing global tariffs, a key aspect of his economic policies. The Court of International Trade determined that an emergency law invoked by the White House does not grant the president unilateral power to impose tariffs on nearly all countries.
The Manhattan-based court emphasized that the US Constitution designates exclusive powers to Congress for regulating commerce with foreign nations, asserting that this authority is not overridden by the president’s responsibility to protect the economy.
The lawsuit was filed by the nonpartisan Liberty Justice Center on behalf of five small businesses that import goods from the countries targeted by the tariffs. This case represents the first major legal challenge to Trump’s so-called “Liberation Day” tariffs.
While the Trump administration has the option to appeal the ruling in federal court, the decision could have significant implications for trade policies moving forward. Since Trump announced the sweeping tariffs on April 2, global financial markets have experienced volatility, with measures being reversed or reduced as the White House engaged in negotiations with foreign governments.
Donald Trump’s second-term global tariffs have been deemed “illegal” and blocked by the US Trade Court, dealing a significant blow to his economic agenda. Here’s what you need to know.
– *Tariff Plan*: Trump’s tariff plan involves imposing a universal 10% tariff on all countries, with higher tariffs on countries with large trade deficits.
– *US Trade Court Ruling*: The US Court of International Trade ruled that Trump’s global tariffs were imposed without proper authority, siding with Democratic-led states and small businesses.
– *Impact*: The tariffs have caused trillions of dollars in market value to be shed and regained amid weeks of delays, reversals, and announcements about potential trade deals.
– *Economic Effects*: According to the Tax Foundation, Trump’s tariffs will:
– *Raise Revenue*: $2.0 trillion in revenue over the next decade (conventional basis), but reduce US GDP by 0.8%.
– *Increase Tax Burden*: Imposed and scheduled tariffs will amount to an average tax increase of $1,155 in 2025 and $1,397 in 2026 per US household.
– *Reduce Imports*: Cause imports to fall by about $542 billion in 2025, or 16%.
Differences from First-Term Tariffs
– *Broader Scope*: Trump’s second-term tariffs are broader in scope, targeting almost every country in the world, including Canada and Mexico.
– *Higher Tariffs*: The tariffs are incremental, with some countries facing tariffs over 100%.
– *Fewer Exceptions*: Unlike first-term tariffs, these new tariffs have very few exceptions and exemptions
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