Trump Tariffs May Remain In Effect While Appeals Proceed: US Court
The Federal Circuit said the litigation raised issues of 'exceptional importance" warranting the court to take the rare step of having the 11-member court hear the appeal, rather than have it go before a three-judge panel first. It scheduled arguments for July 31.
The tariffs, used by Trump as negotiating leverage with U.S. trading partners, and their on-again, off-again nature, have shocked markets and whipsawed companies of all sizes as they seek to manage supply chains, production, staffing and prices.
The ruling has no impact on other tariffs levied under more traditional legal authority, such as duties on steel and aluminum imports.
A three-judge panel of the U.S. Court of International Trade ruled on May 28 that the U.S. Constitution gave Congress, not the president, the power to levy taxes and tariffs, and that the president had exceeded his authority by invoking the International Emergency Economic Powers Act, a law intended to address 'unusual and extraordinary" threats during national emergencies.
The Trump administration quickly appealed the ruling, and the Federal Circuit in Washington put the lower court decision on hold the next day while it considered whether to impose a longer-term pause.
The May 28 ruling came in a pair of lawsuits, one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses that import goods from countries targeted by the duties, and the other by 12 U.S. states led by Oregon.
Jeffrey Schwab, an attorney for the small businesses that sued, said Tuesday's federal appeals court decision was disappointing, but it did not mean that the Trump administration would win in the end.
'It's important to note that every court to rule on the merits so far has found these tariffs unlawful, and we have faith that this court will likewise see what is plain as day: that IEEPA does not allow the president to impose whatever tax he wants whenever he wants," Schwab said Tuesday.
The White House and state of Oregon did not immediately respond to requests for comment after normal business hours on Tuesday.
Trump has claimed broad authority to set tariffs under IEEPA. The 1977 law has historically been used to impose sanctions on enemies of the U.S. or freeze their assets. Trump is the first U.S. president to use it to impose tariffs.
Trump has said that the tariffs imposed in February on Canada, China and Mexico were to fight illegal fentanyl trafficking at U.S. borders, denied by the three countries, and that the across-the-board tariffs on all U.S. trading partners imposed in April were a response to the U.S. trade deficit.
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