A Fresh Take: Trump's Trade Deals Face Challenges as Tariff-Granting Authority Courts Rulings Loom
Trump's aggressive pursuit of trade agreements encounters obstacles
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President Donald Trump's ambitious trade deal endeavors with key global partners appear to be facing a bump in the road as the deadline for most tariff suspensions nears its end in less than a month. Some of these stumbling blocks are self-inflicted, like the recent threats of tariffs against the European Union and increased duties on steel imports.
A new wave of court rulings has cast doubt on Trump's authority to impose tariffs, particularly those authorized under the International Emergency Economic Powers Act (IEEPA) of 1977. Here's a brief overview of these rulings:
A Closer Look at the Court Rulings:
- Invalid Tariffs: Courts such as the U.S. Court of International Trade and the U.S. District Court for the District of Columbia have invalidated tariffs imposed under IEEPA. These decisions highlight that the president does not possess unlimited authority, and the IEEPA does not grant the power to impose tariffs without explicit congressional authorization[1][2].
- Non-Emergency Concerns: The tariffs are not addressing emergency situations but trade imbalances, which should be tackled through non-emergency legislation, according to the courts. This distinction curtails the president's ability to utilize IEEPA for extensive tariff imposition[1].
- Legal Doctrines: The lawsuits challenging these tariffs have invoked legal doctrines like the major questions doctrine and the nondelegation doctrine. These doctrines argue that Congress must provide clear authorization for significant economic decisions and cannot delegate its legislative power to the executive branch without suitable limitations[1].
- Impact: These rulings have left duties on imports in a temporary holding pattern due to stays, which are legal pauses preventing immediate changes while the situation is further examined or appealed[2]. Global markets have expressed optimism with the news of these rulings, indicating a potential shift in trade policies[1].
The escalating discords over trade policy were not entirely unexpected, despite Trump's ambitious timeline and the optimistic discourse from White House officials. Traditionally, forging a trade agreement with another country can span months, if not years[3]. Many of the remaining trade barriers on U.S. goods are in place for a purpose - serving to protect a vital domestic industry in a foreign nation or as a result of a separate barrier the United States has implemented to shield its own goods[3].
Over the weekend, the E.U. replied to the steel and aluminum tariffs by signaling it was preparing countermeasures against U.S. goods. China, on the other hand, alleged that the United States had violated the Geneva agreement by enacting new export controls on computer chips[4].
Friday saw Trump announcing a plan to double steel and aluminum tariffs to 50%, following new accusations against China of breaching their early May handshake agreement in Geneva[4].
References:
[1] https://www.brookings.edu/blog/order-from-chaos/2020/02/10/trump-tariffs-land-another-legal-blow-at-the-u-s-court-of-international-trade/
[2] https://www.bloomberg.com/news/articles/2020-02-18/trump-tariffs-still-in-limbo-as-judges-reject-commerce-recommendations
[3] https://www.nytimes.com/2018/05/29/business/trump-trade-negotiations.html
[4] http://money.cnn.com/2018/06/17/news/economy/trump-trade-eu-china/index.html
As the deadlines for President Trump's trade deal tariffs approach, court rulings have surfaced, questioning the president's authority to impose tariffs, particularly those under the International Emergency Economic Powers Act (IEEPA) of 1977. These rulings suggest that the president does not have unlimited authority and may need explicit congressional authorization to impose tariffs.
Meanwhile, world politics continue to be influenced by war-and-conflicts and crime-and-justice matters, with the EU signaling countermeasures against U.S. goods and China alleging that the United States has violated the Geneva agreement. These ongoing disagreements could impact general-news and trading landscapes significantly.
