Emergency powers used by Trump in tariff implementation deemed unlawful by the court, yet remain enforceable for the time being

In a series of events that shook the international trade landscape, the administration of former U.S. President Donald Trump implemented two sets of tariffs, each with its unique purpose and implications.

The first set, dubbed the "Liberation Day tariffs," were announced on April 2. These tariffs consisted of a "reciprocal" 50% levy on countries with significant trade deficits and a "baseline" 10% tariff for all other nations. However, the U.S. Court of International Trade in New York ruled that these tariffs exceeded the President's authority under the emergency powers law, a decision that has since been appealed by the U.S. government.

The second set of tariffs, known as the "trafficking tariffs," were announced in February. These tariffs were designed to pressure Canada, China, and Mexico into taking more action to curb illegal drug and immigrant flow into the United States. It's worth noting that the "trafficking tariffs" have been revised since their initial announcement.

The implementation of the April 2 tariffs took effect on August 7. The trade court challenge, however, does not cover other Trump tariffs, such as levies on foreign steel, aluminium, and autos.

The Trade Act of 1974 provides the President with the authority to impose tariffs on imports from countries with big trade deficits. This authority was utilised in the case of the "Liberation Day tariffs" and the "trafficking tariffs," which were implemented for a period of 150 days at a rate of 15%.

Section 301 of the same 1974 law allows the President to tax imports from countries found to have engaged in unfair trade practices after an investigation by the Office of the U.S. Trade Representative. Trump used this Section 301 authority to initiate a trade war with China during his first term. The national emergency underlying these tariffs, as declared by Trump, was the long-running gap between what the U.S. sells and what it buys from the rest of the world.

It's important to note that the United States has run trade deficits for 49 straight years, a fact that has contributed to the ongoing debate and policy decisions surrounding international trade. The outcome of the appeals against the judgment on Donald Trump's tariff measures before the United States Supreme Court remains to be seen, with U.S. Treasury Secretary Scott Bessent warning about potential large-scale repayment obligations if the Supreme Court invalidates Trump's tariffs.

Emergency powers used by Trump in tariff implementation deemed unlawful by the court, yet remain enforceable for the time being