Trump tariffs to remain in place while White House appeals ruling.
Donald Trump’s sweeping trade tariffs will remain in place while the White House appeals against a legal ruling to block them, a US court has decided.
On Wednesday, the New York-based Court of International Trade ruled that the President had exceeded his authority by imposing tariffs on nearly all countries in the world.
The White House then submitted an emergency motion to the Court of Appeals for the Federal Circuit, requesting for the tariffs to be reinstated while its lawyers appealed against the ban.
The court ruled in the administration’s favour, reinstating the tariffs temporarily.
Its ruling said: “The request for an immediate administrative stay is granted to the extent that the judgments and the permanent injunctions entered by the Court of International Trade in these cases are temporarily stayed until further notice while this court considers the motions papers.”
The Court of International Trade blocked the tariffs in response to lawsuits filed by small businesses and a group of states. They argued that Trump had exceeded his authority, left US trade policy dependent on his whims and unleashed economic chaos.
Trump first ordered tariffs on goods from China, Mexico and Canada in February, claiming the move was intended to address the US’s fentanyl crisis.
Then in April, he imposed so-called reciprocal tariffs of up to 50 per cent on countries with which the US runs a trade deficit – where the value of goods it buys from a country is greater that the value of those it sells to them.
Ten per cent baseline tariffs were imposed on almost every other country.
The move overturned decades of US trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the US and around the world.
Trump later suspended the reciprocal tariffs for 90 days to give countries time to agree to reduce barriers to US exports, but he kept the baseline tariffs in place.
Tariffs must typically be approved by Congress, but Trump justified the action by invoking the 1977 International Emergency Economic Powers Act (IEPPA) to declare a national emergency.
In the legal case, the White House argued that courts approved then-president Richard Nixon’s emergency use of tariffs in a 1971 economic and financial crisis that arose when the US suddenly devalued the dollar by ending a policy that linked the US currency to the price of gold.
The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language later used in IEPPA.
However, the Court of International Trade ruled that Trump’s sweeping tariffs exceeded his authority to regulate imports under IEEPA.
The ruling affects only some of Trump’s tariffs, not those on foreign steel, aluminium and cars, which were invoked under a different law.
Markets and financial analysts reacted positively to the ruling.
Wall Street closed higher on Thursday despite the decision to reinstate the tariffs. The S&P 500 ended up 0.4 per cent higher.
The dollar, on the other hand, stayed lower peers such as the yen and Swiss franc as investors braced for more trade uncertainty and volatility.
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