Tariffs, slap in Trump's face: judges stop new 10% tariffs

Also illegal are the new10% global tariffs imposed by Donald Trump to replace at least temporarily the aggressive reciprocal tariffs already rejected as an abuse of power. The Court of International Trade, the specialised federal court that has jurisdiction in the matter, denied that the president has the authority to trigger the new generalised import levies based on the law he invoked, Section 122 of the Trade Act of 1974.

The Court, by a majority of two judges to one, found that Trump's tariffs decree 'is invalid' and that therefore the 'tariffs imposed are not authorised by law'. The law in question allows the imposition of levies of up to 15% for up to 150 days in response to serious and persistent balance of payments imbalances. According to the Court, Trump's decision does not meet the requirements. A coalition of 24 states and two importers had filed an appeal.

The political slap in the face is significant, to the legitimacy of the more protectionist policies espoused by Trump. Previous reciprocal tariffs against dozens of countries had already been found illegal by both the Court of Commerce and, ultimately, the US Supreme Court. As a result, the White House will now have to pay back up to 166 billion to importing companies.

Trump immediately responded by imposing the new 10% barrier and saying he would raise it to 15%, which he never did.

While the new political defeat is undoubted, from a practical point of view, the consequences of the ruling may not be very significant: the tariffs were due to expire in July and the administration intends to replace them with actions based on a different piece of legislation, Secion 301 of the Trade Act, which is considered more robust: it provides for tariffs in response to unfair and discriminatory trade practices of partner countries.