Tariffs Reinstated By Appeals Court, Trump May Quickly Wrap-Up Trade Deal
The president has the power to impose tariffs of up to 15 per cent for 150 days to address concerns about the balance of trade if it was an emergency.
Chennai: A day after a US trade court blocked levying of Trump’s reciprocal tariffs and basic tariffs, a Federal Appeals court stayed the order and allowed the continuation of the tariffs. However, the uncertainty still looms large over the partners engaged in trade talks, including India.
The judgment issued Wednesday night by the US Court of International Trade is “temporarily stayed until further notice while this court considers the motions papers,” the appeals court said in its order on Thursday.
The US Court of International Trade had ruled that Trump’s “Liberation Day” tariffs — which imposed a 10 per cent baseline duty on most imports and country-specific reciprocal tariffs on goods from 57 countries— were illegal as he “overstepped his authority” by imposing tariffs under International Emergency Economic Powers Act of 1977 (IEEPA).
Based on the outcome of the case in the Appeals court, it could also go to the Supreme Court. However, a ruling against the tariffs by the apex court need not end his tariff plans.
The president has the power to impose tariffs of up to 15 per cent for 150 days to address concerns about the balance of trade if it was an emergency.
According to Goldman Sachs, Trump could also turn to other laws that he used in his first term to justify tariffs focusing on issues such as national security and unfair trade policies. But those require investigations and periods of public comment before tariffs go into effect.
Goldman Sachs finds that a 1930 trade law allows the president to impose tariffs of up to 50 per cent on imports from countries that "discriminate" against the US.
According to experts, the ruling will force the Trump administration to wrap up trade deals during the 90-day pause.
Despite the stay, the uncertainty around the trade deal continues. “Trump tariffs are already WTO non-compatible and are now challenged on grounds of legality. They are temporary at best and how can India cut real tariffs against this,” said Ajay Srivastava, founder, GTRI.