Supreme Court Curbs Presidential Tariff Powers, But Trump's Trade War Far From Over

United States - Ekhbary News Agency

Supreme Court Curbs Presidential Tariff Powers, But Trump's Trade War Far From Over

In a pivotal decision reshaping the landscape of U.S. trade policy, the Supreme Court has declared former President Donald Trump’s unilateral imposition of "emergency" tariffs under the International Emergency Economic Powers Act (IEEPA) to be unlawful and unconstitutional. This landmark ruling, issued recently, challenges the executive branch's authority in trade matters, reaffirming Congress's primary role as the arbiter of American commerce. While the judgment represents a significant setback for Trump's protectionist agenda, the former president has swiftly announced intentions to pursue his trade objectives through alternative legal mechanisms, suggesting that the era of aggressive trade measures is far from over.

The Supreme Court's decision specifically targets tariffs enacted by Trump during his second term, which were justified by invoking IEEPA for various reasons, including stemming the flow of fentanyl from nations like Canada, Mexico, and China, or addressing perceived trade deficits. The Court found that IEEPA, a 1977 statute designed for genuine national emergencies, does not grant the president unilateral power to determine new charges on foreign goods without congressional approval. This nullifies a substantial portion of the tariffs that had been a cornerstone of Trump's economic strategy, effectively dismantling several trade agreements and duties imposed on a range of products.

Among the immediate consequences, funds collected from U.S. sales of Venezuelan oils, trade agreements with Japan and the United Kingdom (at least on their current terms), and a significant number of duties on Chinese goods, are now deemed illegitimate or scrapped. Conversely, tax exemptions for certain inexpensive imports, such as Temu products, are expected to be reinstated. The ruling also creates a complex situation for the estimated $170 billion in tariff revenue paid by American businesses to the Treasury under these IEEPA-specific tariffs, opening the door for corporations and small firms to seek refunds through a laborious legal process.

Despite this legal blow, the impact on everyday consumers might not be as immediate or dramatic as some might hope. Many tariffs remain in effect, particularly those implemented under separate national security authorities. For instance, the Yale Budget Lab points out that duties on imports of steel, aluminum, copper, wood, and cars, imposed under a different authority, will continue unchanged. This means that prices for goods like vehicles and furniture are unlikely to see a significant reduction in the near term. Moreover, Trump has already demonstrated his resolve to continue his trade policies.

Following the SCOTUS announcement, Trump expressed profound disappointment but quickly outlined his next steps. These include a new executive order aiming to reimpose a 10 percent universal tariff he had previously declared, a reaffirmation of existing foreign taxes not levied via IEEPA, and a "maximalist application" of all laws and provisions that delegate trade regulation powers to the administration. This proactive stance underscores his commitment to reshaping global trade dynamics, regardless of judicial challenges.

Beyond the national security authority he has previously utilized, Trump possesses an array of other tariff-imposing tools. Section 301 of the 1974 Trade Act, famously used in his first term against China, is already being reapplied in ongoing investigations concerning potential new penalties on Brazilian and Chinese goods. More controversially, Trump has hinted at invoking lesser-used or unprecedented provisions. One such provision from the 1974 Trade Act allows for temporary tariffs up to 15 percent without formal investigation, which he has reportedly already used to reinstate the 10 percent universal tariff, albeit with a 150-day expiration unless Congress reauthorizes it. Another, dating back to 1930, permits presidential tariffs as high as 50 percent if foreign countries are deemed to be "discriminating" against U.S. goods. These options highlight the extensive powers still available to the executive branch, even after the recent Supreme Court intervention.

The question of refunds for tariffs already paid is a critical point of contention. While the Supreme Court did not directly address reimbursements, the process is expected to be protracted and primarily benefit businesses rather than individual consumers. The U.S. Court of International Trade, which has overseen initial legal challenges to Trump's tariffs, is preparing to hear up to 1,500 cases from businesses seeking refunds. This complex litigation could take years, and experts suggest that any financial relief is unlikely to "trickle down" to the average American consumer, unless they are directly involved in import businesses with legal teams to pursue such claims.

In conclusion, while the Supreme Court's ruling undeniably clips the wings of presidential power in invoking "emergency" trade measures, it does not signal the end of a protectionist approach to U.S. trade. Former President Trump's immediate response indicates a strategic pivot towards other legislative and executive authorities, ensuring that trade policy remains a contentious and evolving arena. The economic implications for businesses and consumers will continue to be shaped by these ongoing legal and political battles, with the prospect of widespread consumer refunds remaining distant.

Ekhbary News Agency