[CTC] Trump Tariffs Ruled Illegal by Federal Judicial Panel

[Arthur Stamoulis]

*Covers the "reciprocal tariffs" that were paused until July, the
Mexico-Canada-China "fentanyl" tariffs and the 10% tariffs.  The White
House is appealing.  Supreme Court may or may not intervene.  --Arthur*

https://www.nytimes.com/2025/05/28/business/trump-tariffs-blocked-federal-court.html

Trump Tariffs Ruled Illegal by Federal Judicial Panel

The U.S. Court of International Trade said the president had overstepped
his authority in imposing his “reciprocal” tariffs globally, as well as
levies on Canada and Mexico.

A panel of federal judges on Wednesday blocked President Trump from
imposing some of his steepest tariffs on China and other U.S. trading
partners, finding that federal law did not grant him “unbounded authority”
to tax imports from nearly every country around the world.

The ruling, by the U.S. Court of International Trade, delivered an early
yet significant setback to Mr. Trump, undercutting his primary leverage as
he looks to pressure other nations into striking trade deals more
beneficial to the United States.

Before Mr. Trump took office, no president had sought to invoke the
International Emergency Economic Powers Act, a 1977 law, to impose tariffs
on other nations. The law, which primarily concerns trade embargoes and
sanctions, does not even mention tariffs.

But Mr. Trump adopted a novel interpretation of its powers as he announced,
and then suspended, high levies on scores of countries in April. He also
used the law to impose tariffs on products from Canada and Mexico in return
for what he said was their role in sending fentanyl to the United States.

On Wednesday, the Court of International Trade, the primary federal legal
body overseeing such matters, found that Mr. Trump’s tariffs “exceed any
authority granted” to the president by the emergency powers law. Ruling in
separate cases brought by states and businesses, a bipartisan panel of
three judges essentially declared many, but not all, of Mr. Trump’s tariffs
to have been issued illegally.

It was not clear precisely when and how the tariff collections would grind
to a halt. The ruling gave the executive branch up to 10 days to complete
the bureaucratic process of ending them. The Trump administration
immediately filed its plans to appeal in the U.S. Court of Appeals for the
Federal Circuit.

For now, the decision threatens to undercut the administration’s efforts to
reach trade agreements globally since the president is using the prospect
of boundless tariffs — enacted on his own, without congressional approval —
as a bargaining chip in negotiations with roughly 18 countries. Those deals
are still under negotiation, and some of Mr. Trump’s top aides had told the
court in recent days that an adverse ruling could imperil the talks.

The ruling does not affect tariffs issued by the Trump administration under
separate legal authorities, including levies on steel, aluminum and cars,
and others that Mr. Trump has threatened on pharmaceuticals, semiconductors
and other critical products.

A White House spokesman, Kush Desai, sharply rebuked the court, saying in a
statement that unfair trade relationships had “decimated American
communities, left our workers behind and weakened our defense industrial
base — facts that the court did not dispute.”

“It is not for unelected judges to decide how to properly address a
national emergency,” he said, adding that Mr. Trump would use “every lever
of executive power to address this  crisis.”

Everett Eissenstat, a partner at the law firm Squire Patton Boggs who
served as deputy director of the National Economic Council during Mr.
Trump’s first term, said the decision “dramatically impacts near-term
dynamics surrounding the president’s tariff and trade agenda.”

“The story is far from over, but today marks a significant chapter in its
evolution,” Mr. Eissenstat added.

Lawyers for the Justice Department had staunchly defended the legality of
Mr. Trump’s strategy, telling the Court of International Trade repeatedly
that it had no right to review the president’s actions.

That stance discomfited the judges multiple times over weeks of arguments.
The tension arose repeatedly last Wednesday, when a coalition of 12 states,
led by Oregon, asked the court to issue a permanent injunction that would
halt Mr. Trump’s tariffs.

“The president identified the emergency, and he decided the means to
address that emergency,” Brett Shumate, a Justice Department lawyer, told
the court. He added that the goal had been to “bring our trading partners
to the table” and create political leverage for possible deal-making.

“It may be a very dandy plan, but it has to meet the statute,” replied
Senior Judge Jane A. Restani, who was nominated to the trade court by
President Ronald Reagan.

By invoking emergency authority, Mr. Trump had sought to impose the tariffs
immediately, without waiting for Congress to act or the government to
compile reports or request public comments that other trade laws require.
Frequently, the Trump administration pointed to the country’s large trade
deficit to justify its actions to impose tariffs using emergency
authorities.

The U.S. trade representative, Jamieson Greer, also warned that a court
ruling against the administration could stymie its efforts to negotiate
trade deals with other countries.

Those agreements remain elusive. Mr. Trump has steadily lowered tariff
rates in cooperation with China, while striking a tentative bargain with
Britain. Yet the administration is far from its goal of ratifying “90 deals
in 90 days,” as a Trump adviser proclaimed in April.

The court decision nonetheless was a victory for the group of businesses
and the coalition of states that had each sued on the grounds that Mr.
Trump had overstepped the authority of his office, resulting in a trade war
that had saddled them with steep financial losses.

Appearing at the trade court this month, businesses including VOS
Selections, a wine and spirits importer, described Mr. Trump’s steep levies
on China and other countries as a “power grab,” arguing that the economic
emergency law does not explicitly say the president can impose tariffs.
They also disputed Mr. Trump’s rationale for invoking that law, saying the
nation’s persistent trade deficit — decades in the making — does not
qualify as an emergency.

Jeffrey Schwab, a senior counsel at the Liberty Justice Center, which
represented the business plaintiffs, told the court that Mr. Trump’s
position essentially would allow him to “impose tariffs on any country at
any rate at any time, simply by declaring a national emergency.” The
nonprofit has past ties to Richard Uihlein, who is an Illinois
industrialist and a Republican megadonor.

State officials also argued that nothing about the U.S. trade deficit
merited Mr. Trump’s invocation of the emergency powers law. Brian Marshall,
a lawyer at the Oregon Justice Department, told the court that the
president had improperly sought to use the statute as a form of leverage
anyway.

Ted Murphy, a trade lawyer at Sidley Austin, said the ruling was a blow to
the president’s trade agenda but “not the final word.”

In addition to an appeal, he said, the government is likely to seek an
emergency stay of the court’s ruling and could begin initiating alternative
tariffs under more standard legal authorities. “In short, this story is not
finished,” Mr. Murphy said.

Tony Romm <https://www.nytimes.com/by/tony-romm> is a reporter covering
economic policy and the Trump administration for The Times, based in
Washington.

Ana Swanson <https://www.nytimes.com/by/ana-swanson> covers trade and
international economics for The Times and is based in Washington. She has
been a journalist for more than a decade.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20250529/5ef24346/attachment.htm>