Donald Trump has suffered a major blow to his economic vision after a US federal court blocked his widespread tariffs.
Last month, Trump announced sweeping tariffs on imports into the US, in what he dubbed ‘liberation day’ for America. This included a universal 10% charge on all imports, and higher rates for regions such as the EU and China.
The announcement sent global stock markets into free fall and caused huge uncertainty for business and trade across the world.
But now, they have pretty much been deemed illegal by a US federal court. The Court of International Trade ruled that an emergency law invoked by the White House to implement the tariffs does not give the president unilateral authority to impose tariffs on nearly every country.
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The court explained that the US Constitution gives Congress exclusive powers to regulate commerce with other nations and this is not superseded by the president’s remit to safeguard the economy.
The Manhattan-based court also blocked a separate set of tariffs imposed by Trump’s administration on China, Mexico and Canada. These were in response to what the White House said was an unacceptable flow of drugs and illegal immigrants into the US.
The only tariffs not affected by the court’s ruling are the steel and aluminium ones, because they fall under a different law.
Unsurprisingly, Trump has taken the decision pretty badly, with the White House saying it is “not for unelected judges to decide how to properly address a national emergency.”
On the flip side, global markets have reacted positively. The dollar has strengthened following the news, whilst UK and Asian markets have risen on Thursday morning, the BBC reports.
The White House has appealed the ruling, which could see the case go all the way to the Supreme Court. It is possible that a higher court could rule differently.
In the immediate future, Trump’s administration has 10 days to halt the tariffs, however most are already suspended.
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