U.S. federal court rules against Trump’s ‘Liberation Day’ and fentanyl tariffs

A New York federal court blocked U.S. President Donald Trump’s sweeping tariffs on imports on Wednesday from almost every country, including Canada.

A panel of judges with the U.S. Court of International Trade ruled that Trump did not have the authority to declare a national emergency that justified these tariffs.

This is being called a big setback for the president.

“The Constitution gives the power to a tariff to Congress, not to the president”, said Jeffrey Schwab, the senior counsel and director of litigation with the Liberty Justice Center. “So that means there’s got to be some limit when Congress delegates that authority to the president. He can’t just assert unlimited authority to tariff whenever he wants.”

Trump invoked the 1977 International Emergency Economy Powers Act, declaring a national emergency and implementing sweeping tariffs.

This is the first time a president has invoked the Act to impose tariffs.

The court said the trade deficit Trump was citing was not a sudden emergency and has been ongoing for nearly 50 years.

The ruling combined two different cases against Trump’s tariffs, including one with five small businesses and another from 12 states.

The tariffs have disrupted global commerce, and raised the risk of higher prices and recession in the U.S. and around the world.

The court’s decision blocks the “Liberation Day” tariffs Trump slapped on almost all U.S. trading partners last month as well as the 25 per cent levies he imposed before that on China, Mexico, and Canada.

At this point, the ruling doesn’t affect Trump’s other tariffs, including those on Canadian steel and aluminum, auto imports, because they were put in place under a different law.

Prime Minister Mark Carney said Thursday morning he welcomes the decision by the U.S. Court of International Trade to strike down Trump’s broad-based tariffs on most countries.

Carney said Canada must continue to diversify its trade relations because steel, aluminum and automotive tariffs remain in place.

Trump’s response to the court’s decision

The administration immediately appealed the court’s decision, but it is unclear if Trump will abide by the ruling in the meantime.

The White House released a statement saying, “it is not for un-elected judges to decide how to properly address a national emergency.”

Meanwhile, global markets have welcomed the court ruling that blocks most of these tariffs, with stocks in Asia having gained and U.S. futures are up as well.

Trump’s trade policies are being called “TACO” trade lately, standing for “Trump Always Chickens Out.”

A Financial Times journalist coined the term over the president’s tendency to threaten high taxes, and then change them.

Trump said, “he’s not chickening out, and it’s part of negotiating.”

With files from The Canadian Press.

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