On Wednesday, the U.S. Court of International Trade (CIT) ruled that President Donald Trump exceeded his authority. The Trump administration used the International Emergency Economic Powers Act (IEEPA) to impose tariffs on several countries, including China, Mexico, Canada, and Europe. Although Canada and Europe are generally considered strong U.S. allies, the administration has imposed significant tariffs on these nations as well. The CIT suspended all tariffs immediately, stating that the president cannot take such measures unilaterally.
However, the Trump administration quickly appealed that decision in federal court. In response, the U.S. Court of Appeals for the Federal Circuit intervened and issued a temporary administrative stay, effectively pausing the lower court’s ruling and allowing the tariffs to remain in effect while the case proceeds.
Trump commented on his Truth Social platform: “Hopefully, the Supreme Court will reverse this horrible, country-threatening decision, QUICKLY and DECISIVELY. Backroom ‘hustlers’ must not be allowed to destroy our nation!”
So, you must be wondering: what now? For now, both sides are preparing their arguments for the Supreme Court, ensuring that their case can withstand cross examination. Here lies the underlying question regarding presidential power under IEEPA.
In practice, if the administration wishes to impose what have been called “trafficking tariffs” to curb, for example, the illegal importation of precursors or finished illicit drugs, the action must satisfy two main criteria under IEEPA. First, there must be a clearly defined, extraordinary threat directly linked to the trafficking issue. Second, the economic measure (in this case, a tariff) must be narrowly tailored to address only that threat. In recent litigation, courts have scrutinised such tariffs and determined that measures labelled as “trafficking tariffs” failed because they did not deal directly and effectively with the threats they were purported to counteract. Essentially, if the measure is not essential to neutralise a narrowly defined emergency, it exceeds the authority conferred by IEEPA.
However, Trump is using tariffs for a different purpose, which he refers to as “fair trade” as part of his fair trade ambition. He has nearly crashed the economy twice in one month. Thus, the question arises: Is there any threat that can justify measures capable of undermining the entire global economy?
