US Supreme Court Overturns Trump's Tariffs, President Responds with New 15% Levy
In a significant blow to President Donald Trump's economic policy, the US Supreme Court has ruled that his use of the International Emergency Economic Powers Act to impose sweeping global tariffs is unconstitutional. The president, however, quickly responded by introducing new tariffs under different legislation, raising global import tariffs from 10% to 15%.
Background
Previously, President Trump had imposed tariffs on many trading partners, justifying them as a means to address the large and serious United States balance-of-payments deficits. These tariffs, however, were declared illegal by the Supreme Court, prompting the president to reintroduce them under a 1974 trade law.
Developments
Following the Supreme Court ruling that the power to impose tariffs and taxes lies with Congress alone, President Trump resorted to the Trade Act of 1974 to impose a 10% tariff which was later increased to 15%. This move was reportedly aimed at dealing with the US balance-of-payments deficits, according to a White House release.
The Supreme Court just struck down President Donald Trump’s worldwide tariffs... If he chooses, Trump could restore many of his tariffs over the next year under different laws,
Fox News reported.
Reactions and Implications
The tariff changes have been met with various reactions. Australia, for instance, is set to examine all options
to avoid the new 15% tariffs, The Guardian reports. China, on the other hand, has urged the US to cancel the unilateral tariffs imposed by President Donald Trump, following the Supreme Court ruling.
The Supreme Court decision has also prompted FedEx to sue the US government, seeking to receive reimbursement of their share of an estimated $175bn in levies, according to The Guardian.
The Current Status
Despite the Supreme Court ruling, the US policy on tariffs hasn’t changed
, according to the top US trade negotiator Jamieson Greer, who assured that the US won’t pull out of deals with the UK, EU, and others. However, the sudden changes and uncertainty in the tariff landscape have created murky waters
for global businesses, as reported by the New York Times.
As the situation continues to unfold, the world will be closely watching the economic implications of these tariffs and the potential countermeasures taken by other countries.