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U.S. Court Rules Trump’s Import Duties as Unlawful: A Bump or an End to Trade Standoffs?

The U.S. Court of International Trade passed a ground-breaking judgment on Wednesday, pronouncing the majority of import duties levied under the administration of Donald Trump as unlawful. The conjecture of putting a full stop to Trump’s international trade standoffs sent the markets into a significant rise on Thursday. But, amidst this optimism, it remains uncertain whether this verdict will considerably limit Trump’s duty enforcement, or merely further muddy global economic waters by intensifying the chaos and perplexity spawned by Trump’s policies.

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Trump has vehemently defended his implementation of duties, attributing his actions to the International Emergency Economic Powers Act (IEEPA), a legislation enacted by Congress half a century ago. Interestingly, he is the revolutionary president to reference the act as a legal platform for the imposition of duties. The basis for his duties stemmed from categorizing issues such as fentanyl trafficking from nations including China, Mexico, and Canada as ’emergency’ situations, and trade disparities with various countries as a critical ’emergency’ mandating his retaliatory global tariffs announcement on April 2.

The tariff application authority claimed by Trump was deemed as exceeding the authority conferred to the President under the IEEPA, by the unanimous decision from the three-member federal court on Wednesday. This interpretation of the Act, the court elaborated, could only address a unique and extraordinary hazard which is pertinent to a declared national emergency and can’t be manipulated for any other objective.

Based on the explicit delegation of the duty power to Congress in the Constitution, the court held that the IEEPA can’t be construed to provide the President with expansive tariff power. According to the Constitution, Congress holds the responsibility to ‘lay and collect taxes, duties, imposts, and excises’ as well as the authority ‘To regulate commerce with foreign nations’.

Despite efforts made by a few Congress members, including Republicans, to reclaim congressional mastery over Trump’s duties, the attempts have not earned the backing of a substantial portion of the Republicans who are in control of Congress. The ruling on Wednesday by the court essentially labeled the congressional idleness as ‘an unlimited delegation of tariff authority’ and ‘an improper renunciation of legislative power to another branch of government’, adding further that any interpretation of the IEEPA that delegates limitless duty authority is in violation of the Constitution.

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The fight against Trump’s duty jurisdiction was championed by the attorneys general of Oregon and Arizona. They asserted that the president exceeded his legal boundaries by imposing these duties, and his unauthorized actions would have led to severe financial damage to the tune of billions to the American economy.

It is however, still uncertain what the ramification of Wednesday’s court decision will be. The Trump administration was quick to indicate its plan to challenge the trade court’s decision. Additionally, economists and analysts suggest that Trump may resort to alternate legal frameworks other than the IEEPA to uphold his authority to enforce tariffs.