A panel of federal judges has ruled against President Trump’s attempt to impose significant tariffs on China and other trading partners, stating that he does not have “unbounded authority” under federal law to levy such taxes on imports from nearly every country. The decision from the U.S. Court of International Trade marks a notable setback for the President, as it diminishes his key leverage in negotiations aimed at creating more advantageous trade agreements for the United States.
Historically, before Trump, no U.S. president had used the International Emergency Economic Powers Act of 1977 to impose tariffs, a law originally designed for economic sanctions and trade embargoes that does not reference tariffs directly. In April, Mr. Trump sought to implement high levies against numerous countries, later suspending these tariffs, and he used the law to also target imports from Canada and Mexico, citing their alleged involvement in the flow of fentanyl into the U.S.
This ruling emphasizes the need for clearer legislative boundaries regarding trade policy, especially in times of economic uncertainty. It also opens up a discussion about the appropriateness of applying such laws in trade contexts. Encouragingly, this development could lead to more balanced trade negotiations in the future, where agreements are reached through dialogue rather than unilateral actions.