24 Nov Tariffs, Trump and The Supreme Court
This past fortnight has seen the US Supreme Court hear arguments around the legality of President Donald Trump’s “liberation day” tariffs applied to most countries around the world.
Whilst the US president had earlier claimed his trade tariffs will not affect US businesses, workers and consumers, a legal challenge filed earlier this year by several small American businesses, including toy firms and wine importers, has claimed the opposite, stating that these tariffs have severely harmed their businesses and forced them to cut prices and issue redundancies.
This challenge led to lower courts in the country ruling that Trump’s tariffs are illegal. In May, the Court of International Trade, based in New York, said Trump did not have the authority to impose tariffs and “the US Constitution grants Congress exclusive authority to regulate commerce”. That decision was upheld by the Court of Appeals for the Federal Circuit in Washington, DC, in August. In this latest and what is likely to be the final escalation, the Supreme Court, is hearing the issue.
If the Supreme Court decides that Trump’s tariffs are illegal, the decision will unravel the foundation of several recently negotiated trade arrangement as well as ongoing discussions.
Furthermore, the Trump administration will have to initiate refunds to the tune of $100 billion to US importers, which could prove to be a monumental administration and management challenge. However, there may be legal precedent for the Court to limit its decision around refunds to prospective relief which would only affect tariffs collected after the Court’s judgement.
Regardless of whether this precedent is applied, if the tariffs are found to be illegal, the outcome would be one of significant upheaval for both the US and exporters around the world and particularly so for Trump’s tariff agenda and global trade.
The Supreme Court is expected to announce their decision this year. Stay up-to-date with the latest news on our LinkedIn page.
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