Vidostream | News, sport and opinion from the Vidostream's US Edition

https://vidostream.com

Trump tariffs suffer staggering setback in U.S. court

In rare rebuke, large share of tariffs eliminated — for now. Court says Trump abused power

U.S. President Donald Trump takes questions from reporters at the White House on Wednesday, when a U.S. trade court blocked his global tariffs from going into effect. (Leah Millis/Reuters)

U.S. President Donald Trump takes questions from reporters at the White House on Wednesday, when a U.S. trade court blocked his global tariffs from going into effect. (Leah Millis/Reuters)

A U.S. court delivered a sharp rebuke of President Donald Trump's trade policy on Wednesday, declaring he abused his authority and striking down many of his tariffs — at least for now.

The upshot for trading partners, including Canada: Certain specific tariffs on steel and aluminum remain in place, but gone, for now, are sweeping levies on entire countries.

The order by the Manhattan-based U.S. Court of International Trade quashes Trump's 10 per cent across-the-board tariff on most nations and his declaration of a fentanyl emergency to impose 25 per cent tariffs on numerous Canadian and Mexican goods.

The White House vowed to fight back with every available tool. This means an immediate appeal and Trump possibly turning to different legal weapons to fight his trade wars.

Nevertheless, this decision made history.

'By far the biggest decision in ages'

American courts tend to be deferential to presidents on trade policy, but Trump has tested their limits with a barrage of protectionist actions unlike anything in modern history. 

WATCH | Investors mock Trump's tariff:

 

Investors are poking fun at U.S. President Donald Trump's on-again, off-again tariff threats, calling it 'TACO' trade — which stands for 'Trump Always Chickens Out.' When asked about the term, Trump called it a 'nasty question.' CBC's Katie Simpson reports.

One U.S. trade lawyer called this the most significant legal defeat of a president on trade policy in decades, with the possible exception of certain court setbacks for Richard Nixon.

"It's by far the biggest decision in ages," Scott Lincicome told CBC News. "It's a very big deal. The only question is how long it lasts."

He predicted fallout on several fronts. The court said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president's emergency powers to safeguard the economy.

It said Trump abused the 1977 International Emergency Economic Powers Act (IEEPA) to apply his fentanyl tariffs on Canada and Mexico, as well as his worldwide tariffs.

"We do not read IEEPA to delegate an unbounded tariff authority to the president," said the 49-page decision. "The challenged [tariffs] will be vacated and their operation permanently enjoined."

The court gave the administration 10 days to implement its order.

Rush to get goods across border

One of Lincicome's predictions is that some countries will now feel less urgency to negotiate tariff deals with Trump. Another prediction? Expect a gusher of goods to flow into the U.S. soon — especially at the land borders with Canada and Mexico — as importers take advantage of this potentially temporary lull in Trump's trade wars, pending a higher court decision. 

"The June import stats are going to be wild," said Lincicome, vice-president of general economics at the Cato Institute, a Washington-based think-tank.

 

Transport trucks drive under a highway sign reading 'Bridge to U.S.A.'
Transport trucks approach the Canada/U.S. border in Windsor, Ont., on March 21, 2020. Cross-border shipping is expected to surge in the wake of Wednesday's ruling. (Rob Gurdebeke/The Canadian Press)

 

"Particularly for Canadians, this stuff's just sitting on the other side of the border. It's going to be like the Flight of the Valkyries across the border."

That is, until, and if, Trump wins an appeal or he uses another legal tool, such as a 1974 trade law that allows temporary 150-day tariffs for less urgent matters.

The ruling came in a pair of lawsuits, one filed by the non-partisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties and the other by 13 U.S. states.

The companies, which range from a New York wine and spirits importer to a Virginia-based maker of educational kits and musical instruments, have said the tariffs will hurt their ability to do business. At least five other legal challenges to the tariffs are pending.

'Our laws matter'

Oregon Attorney General Dan Rayfield, a Democrat whose office is leading the states' lawsuit, called Trump's tariffs unlawful, reckless and economically devastating.

"This ruling reaffirms that our laws matter, and that trade decisions can't be made on the president's whim," Rayfield said in a statement.

 

Oregon Attorney General Dan Rayfield speaks during a news conference at the Oregon Department of Justice office on Wednesday, April 23, 2025, in Portland, Ore.
Wednesday's ruling reaffirmed that 'trade decisions can't be made on the president's whim,' said Oregon Attorney General Dan Rayfield, whose office led the lawsuit over the tariffs launched by 13 states. Here, he is pictured at a news conference at the Oregon Department of Justice office in Portland in April. (Jenny Kane/The Associated Press)

 

The White House promised to fight. Trump spokesman Kush Desai said unfair foreign trade had created historic and persistent deficits and decimated American communities, workers and defence manufacturing.

"It is not for unelected judges to decide how to properly address a national emergency," he said.

"President Trump pledged to put America First, and the administration is committed to using every lever of executive power to address this crisis."

In imposing the tariffs in early April, Trump called the trade deficit a national emergency that justified his 10 per cent across-the-board tariff on all imports, with higher rates for countries with which the United States has the largest trade deficits, particularly China.

Many of those country-specific tariffs were paused a week later. 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.

Trump's on-and-off-again tariffs, which he has said are intended to restore U.S. manufacturing capability, have shocked U.S. financial markets.

The U.S. dollar rose against both the Swiss franc, a traditional currency safe haven, and the Japanese yen following the court decision.

 

The 'Cosco Shipping France' container ship is moored at the Long Beach Container Terminal, LBCT, at Middle Harbor in the Port of Long Beach, Calif., Tuesday, April 15, 2025.
The Cosco Shipping France container ship moored at the Long Beach Container Terminal in the Port of Long Beach, Calif., in April. The court ruling could embolden the U.S.'s European trading partners and make them hesitant to enter into tariff negotiations. (Damian Dovarganes/The Associated Press)
 

Wednesday's decision can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately the U.S. Supreme Court.

Several Washington-based trade experts said the defeat casts a cloud over Trump's attempts to negotiate with other countries, including Canada. They said other countries may have less incentive to bargain.

"This decision throws the existing negotiations for a loop," said trade lawyer Simon Lester. "Foreign governments will have to reevaluate how they react to the Trump administration's trade demands."

WATCH | Europe gets a reprieve on tariffs: 

U.S. President Donald Trump says he will delay his 50 per cent tariff on imports from the European Union until July 9 after a weekend phone call between Trump and European Commission President Ursula von der Leyen.

Another Washington trade analyst said the coming days will be telling.

"The administration is likely in panic mode at the moment," said Inu Manak, a fellow at the Council on Foreign Relations. 

"The very basis for all the negotiations they are undertaking has been jeopardized, so there is no incentive for any trading partner to continue negotiating with the United States until it is clear whether or not the tariffs will, in fact, be stopped in 10 days."

If the tariffs are, indeed, halted for a longer period, she said, Trump's aides will likely seek more targeted tools, such as the Section 232 tariffs used to penalize specific sectors, as Trump did with steel and aluminum.

The bottom line, Manak said: Trump's trade policy has been revealed to not only be "half-baked" but has also pushed the limits of presidential power too far.

Author: Editors Desk, Alexander Panetta

Source: CBC News:

We are using cookies to give you the best experience on our website. By continuing to browse, you are agreeing to our Cookie Policy.
You did not use the site, Click here to remain logged. Timeout: 60 second