US Court Ruling Puts Trump's 'Liberation Day' Tariffs In Disarray

Latest stories

Asia's cyber future: control, code and the new legal frontier

India-Philippines reaching for new strategic horizons

Japan's bond spasm hits a world without safe havens

The lawsuits argued the national emergencies cited in imposing the tariffs – the trade deficit and the fentanyl crisis – were not an emergency and not directly addressed by the tariff remedy. The court agreed, and said by imposing tariffs Trump had overstepped his authority.

The ruling said the executive orders used were“declared to be invalid as contrary to law.”

The act states the president is entitled to take economic action in the face of“an unusual and extraordinary threat”. It's mainly been used to impose sanctions on terrorist groups or freeze assets from Russia. There's nothing in the act that refers to tariffs.

The decision means all the reciprocal tariffs – including the 10% tariffs on most countries, the 50% tariffs Trump was talking about putting on the EU, and some of the Chinese tariffs – are ruled by the court to be illegal. They must be removed within 10 days.

The ruling was based on two separate lawsuits. One was brought by a group of small businesses that argued tariffs materially hurt their business. The other was brought by 12 individual states, arguing the tariffs would materially impact their ability to provide public goods.

Some industry tariffs will remain in place

The ruling does not apply to tariffs applied under Section 201, known as safeguard tariffs. They are intended to protect industries from imports allegedly being sold in the US market at unfair prices or through unfair means. Tariffs on solar panels and washing machines were brought under this regulation.

Also excluded are Section 232 tariffs , which are applied for national security reasons. Those are the steel and aluminium tariffs, the automobile and auto parts tariffs. Trump has declared all those as national security issues, so those tariffs will remain.

Most of the tariffs against China are also excluded under Section 301. Those are put in place for unfair trade practices, such as intellectual property theft or forced technology transfer. They are meant to pressure countries to change their policies.

Other trade investigations are still underway

In addition, there are current investigations related to copper and the pharmaceuticals sector, which will continue. These investigations are part of a more traditional trade process and may lead to future tariffs, including on Australia.

The Trump administration is still weighing possible sector-specific tariffs on pharmaceuticals. Planar/Shutterstock