Trump's Tariffs: Turfed Out But Raring to Return

A court struck down US 'reciprocal' tariffs for exceeding the president's authority. As a legal battle over their validity thickens, could the rule of law come to the global economy's rescue?

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A move that sets back US President Donald Trump's idiosyncratic plan to make America 'great again,' but could possibly slow down or arrest America's descent as a democracy, a court has ruled against the 'reciprocal' tariffs announced by him on 2 April, dubbed 'Liberation Day.' The power to levy such tariffs is held by the US Congress rather than its president, ruled the court, giving the White House 10 days to reverse import duties announced under the International Economic Emergency Powers Act (IEEPA).

While this law grants the president power to 'regulate' imports, it does not mention 'tariffs.' Given the significance of these tariff measures and their 'unbounded' nature, the court held as invalid the assumed delegation of Congress authority to the White House under that law. In other words, the tariff orders had exceeded his authority. US stock market index futures jumped after the ruling, but it is premature to conclude that Trump's tariff tantrums are behind us. This is so for three reasons.