Roadblock
Yesterday, the US Court of International Trade ruled that the International Emergency Economic Powers Act does not authorize any of the Worldwide, Retaliatory, or Trafficking Orders issued by the President, and that those orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. That conclusion entitled thew Plaintiffs to a summary judgement, vacating the orders, a major setback for the Trump administration’s plan to extract massive tariff dollars from our trading partners or force them to negotiate settlements to maintain trading relationships with the US.
The original ‘intention’ of the orders, particular those relating to Mexico, Canada, and China, was to pressure those countries to specifically address the drug problems at the US border, however the Plaintiffs, in this case the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Nevada, New Mexico, New York, and Vermont, argue that the President’s actions (tariffs) do not directly deal with the drug problems as stated in the EO. The government acknowledges that the EO creates leverage to ‘deal with’ those objectives, but the court found that such an approach was different from Regan v, Wald, where the Supreme Court sustained on constitutional grounds that the President’s decision to surtail the flow of hard currency to Cuba currency that could be used in support of Cunan adventurism – by restricting travel.
The court stated that the government’s ‘pressure’ concedes that the direct effect of the country-specific tariffs is simply to burden the countries they target. It is the prospect of mitigating this burden, the Government explains, that will induce the target countries to crack down on trafficking within their jurisdictions. But the court also states that “…however sound this might be as a diplomatic strategy, it does not comfortably meet the statutory definition of “deal[ing] with” the cited emergency. It is hard to conceive of any IEEPA power that could not be justified on the same ground of “pressure.””
The Justice Department immediately filed an appeal, which will go the U.S. Court of Appeals for the Federal Circuit, which puts it on track for a longer-term legal battle, however as of now, the ‘drug related tariffs imposed on Mexico, China, and Canada will be gone within 10 days from the ruling, along with the retaliatory tariffs, which are also currently on hold. By no means do we expect President Trump’s tariff hammer to disappear as he will use the resources of the government to find other obscure laws to base his tariffs on. With ~6 weeks to go before the next deadline there is plenty of time to reinstate if necessary. Followed by more legal challenges.
Note: As of 4 hours ago, the US Appeals court allowed the tariffs to be reinstated until June 9 when the plaintiffs and defendants must respond with updated arguments.
The original ‘intention’ of the orders, particular those relating to Mexico, Canada, and China, was to pressure those countries to specifically address the drug problems at the US border, however the Plaintiffs, in this case the states of Arizona, Colorado, Connecticut, Delaware, Illinois, Maine, Nevada, New Mexico, New York, and Vermont, argue that the President’s actions (tariffs) do not directly deal with the drug problems as stated in the EO. The government acknowledges that the EO creates leverage to ‘deal with’ those objectives, but the court found that such an approach was different from Regan v, Wald, where the Supreme Court sustained on constitutional grounds that the President’s decision to surtail the flow of hard currency to Cuba currency that could be used in support of Cunan adventurism – by restricting travel.
The court stated that the government’s ‘pressure’ concedes that the direct effect of the country-specific tariffs is simply to burden the countries they target. It is the prospect of mitigating this burden, the Government explains, that will induce the target countries to crack down on trafficking within their jurisdictions. But the court also states that “…however sound this might be as a diplomatic strategy, it does not comfortably meet the statutory definition of “deal[ing] with” the cited emergency. It is hard to conceive of any IEEPA power that could not be justified on the same ground of “pressure.””
The Justice Department immediately filed an appeal, which will go the U.S. Court of Appeals for the Federal Circuit, which puts it on track for a longer-term legal battle, however as of now, the ‘drug related tariffs imposed on Mexico, China, and Canada will be gone within 10 days from the ruling, along with the retaliatory tariffs, which are also currently on hold. By no means do we expect President Trump’s tariff hammer to disappear as he will use the resources of the government to find other obscure laws to base his tariffs on. With ~6 weeks to go before the next deadline there is plenty of time to reinstate if necessary. Followed by more legal challenges.
Note: As of 4 hours ago, the US Appeals court allowed the tariffs to be reinstated until June 9 when the plaintiffs and defendants must respond with updated arguments.
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