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New York, NY
A US federal court on Wednesday (local time) ruled against US President Donald Trump’s large-scale imposition of sweeping tariffs, deeming that this move exceeds his legal authority and that it would affect a wide range of imported goods, as reported by CNN.
The decision, handed down by the US Court of International Trade in Manhattan, determined that the tariffs — including those introduced under emergency economic powers — were unlawful; however, the Trump administration has already filed an appeal, leaving the future of the tariffs uncertain, CNN reported.
The legal setback may alter the direction of an “asymmetric” trade truce with China and reignite the India-Pakistan dispute, according to the Trump administration, which sought a court’s permission to uphold the tariff power.
Earlier in May, when both nuclear-armed neighbors were embroiled in a confrontation after a terror strike by Pakistan-based terrorists in Pahalgam, Jammu and Kashmir, on April 22, US officials said President Donald Trump used his tariff power to mediate a ceasefire between India and Pakistan.
Howard Lutnick, the United States Secretary of Commerce, in a May 23 filing to the court said that the tariffs were a crucial foreign policy instrument and that restricting them may endanger the ceasefire between India and Pakistan.
Lutnick’s court statement, mentioned “An adverse ruling that constrains presidential power in this case could lead India and Pakistan to question the validity of President Trump’s offer, threatening the security of an entire region and the lives of millions.”
Earlier, US President Donald Trump while participating in the US-Saudi Investment Forum in Riyadh on May 13 took credit for the cessation of tensions between India and Pakistan. Trump said that he used trade to a large extent to reach the agreement.
“Just days ago, my administration brokered an historic cease-fire to stop the escalating violence between India and Pakistan and I used trade to a large extent to do it. I said, fellas, come on, let’s make a deal, let’s do some trading, let’s not trade nuclear missiles, let’s trade the things that you make so beautifully, and they both have very powerful leaders, very strong leaders, smart leaders, and it all stopped,” he said.
The Manhattan-based three-judge Court of International Trade rejected all arguments placed by the Government of US.
As per CNN, the panel of judges unanimously found that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose the tariffs was not legally justified.
The IEEPA, they noted, does not explicitly allow the president to implement tariffs, and using it for that purpose could represent an unconstitutional transfer of congressional authority.
“IEEPA does not authorise any of the worldwide, retaliatory, or trafficking tariff orders… The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The trafficking tariffs fail because they do not deal with the threats set forth in those orders,” the panel of judges said, as quoted by CNN.
The court issued a permanent injunction against the tariffs, giving the government 10 days to respond. If the ruling stands after appeal, it could effectively end the bulk of Trump’s tariff policies before final trade agreements with affected countries are completed.
As per CNN, the court’s decision halts the enforcement of most of Trump’s tariffs, including the 30 per cent duties on Chinese imports, 25 per cent on certain goods from Mexico and Canada, and a general 10 per cent tariff on many other imports. However, the ruling does not apply to tariffs on autos, steel, and aluminium, which were enacted under a different law of the US Trade Expansion Act.
The case was brought by Liberty Justice Centre on behalf of several small businesses, including wine importer VOS Selections, which claimed the tariffs caused serious financial harm. A separate lawsuit filed by twelve Democratic-led states was also decided in the same ruling.
