US Supreme Court Strikes Down Trump's Global Tariffs
In a landmark ruling with major implications for the global economy, the US Supreme Court has ruled that President Donald Trump exceeded his authority when he imposed sweeping global tariffs, under a law intended for use in national emergencies. The verdict against Trump was expected but it opens a phase of potential chaos in trade relationships around the world.
Background
Trump had leveraged tariffs, taxes on imported goods, as a key economic and foreign policy tool. He pursued the tariffs under the International Emergency Economic Powers Act (IEEPA) of 1977, justifying his actions as a response to the U.S. trade deficit. However, the Supreme Court has now declared that this law does not grant the authority to the president to impose tariffs, a decision that weakens Trump's hand in dealing with other nations.
Key Developments
In a 6-3 decision on February 20, the court declared that the U.S. Constitution grants Congress the power to regulate importation and that Trump's use of IEEPA to justify tariffs against almost every country in the world was unconstitutional. Chief Justice John Roberts, writing for the majority, stated, Our task today is to decide only whether the power to 'regulate… importation', as granted to the president in IEEPA, embraces the power to impose tariffs… it does not.
The decision has been met with mixed reactions globally. Some countries have welcomed the ruling, while others are reviewing their trade deals and economic effect. In response to the ruling, Trump announced he would sign an executive order imposing a new 10% global tariff under different legislation, the Trade Act of 1974. A day later, he increased this to 15%.
Implications and Reactions
The decision is a major blow to Trump's second-term agenda and has been described as the worst day of his second term. Despite the Supreme Court's decision, it is clear that the president remains intent on tariffs, arguing that his trade agenda is succeeding, despite little evidence to support it.
Democrats quickly celebrated the decision, calling the tariffs an unfair tax on Americans, despite some in the party having previously supported using tariffs as leverage in trade disputes. On the other hand, Trump criticized the ruling as a disgrace
and praised the three liberal justices who voted against it for their loyalty
to the Democrats.
Conclusion
This ruling does not necessarily signify an end to tariffs or to Trump's commercial wars. Economists predict that the President will find other ways to assert protectionism in American commercial law. As of now, the world waits to see how the U.S. government replaces the rejected tariffs with new instruments and how global trade relationships will be affected in the long run.