The whole tariff debacle of President Donald Trump has made the headlines for some time now. But one would be forgiven to wonder why the President is so dead set on this. One valid point that he has is to encourage U.S. consumers to buy more American-made products. This will increase the overall amount of tax raised as well as boost investment. It is also understood that he the aim is to reduce the overall trade deficit.
Tacking the whole issue in court
A U.S. appeals court on Thursday will review President Donald Trump’s power to impose tariffs, after a lower court said he exceeded his authority with sweeping levies on imported goods. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., will consider the legality of “reciprocal” tariffs that Trump imposed on a broad range of U.S. trading partners in April, as well as tariffs imposed in February against China, Canada and Mexico.
Reciprocal tariffs are those taxes that are imposed by a country on the imports from another country, this matches to the tariffs imposed by that country on its exports. A panel of all of the court’s active judges, eight appointed by Democratic presidents and three appointed by former Republican presidents, will hear arguments scheduled to begin at 10 a.m. ET in two cases brought by five small U.S. businesses and 12 Democratic-led U.S. states.
Divided opinions all across the U.S.
The arguments – one day before Trump plans to increase tariff rates on imported goods from nearly all U.S. trading partners – mark the first test before a U.S. appeals court of the scope of his tariff authority. The president has made tariffs a central instrument of his foreign policy, wielding them aggressively in his second term as leverage in trade negotiations and to push back against what he has called unfair practices.
The states and businesses challenging the tariffs argued that they are not permissible under emergency presidential powers that Trump cited to justify them. They say the U.S. Constitution grants Congress, and not the president, authority over tariffs and other taxes. Trump claimed broad authority to set tariffs under the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used for sanctioning enemies or freezing their assets. Trump is the first president to use it to impose tariffs.
What was, what were and what will be with the tariffs
On May 28, a three-judge panel of the U.S. Court of International Trade sided with the Democratic states and small businesses that challenged Trump. It said that the IEEPA, a law intended to address “unusual and extraordinary” threats during national emergencies, did not authorize tariffs related to longstanding trade deficits. The Court of International Trade specifically hears all civil actions regarding international trade that involves any government action, official or agency.
Although the court sits in New York City, it has jurisdiction all across the U.S. The Federal Circuit has allowed the tariffs to remain in place while it considers the administration’s appeal. The timing of the court’s decision is uncertain, and the losing side will likely appeal quickly to the U.S. Supreme Court.
The president recently announced trade deals that set tariff rates on goods from the European Union and Japan, following smaller trade agreements with Britain, Indonesia and Vietnam. Trump’s Department of Justice has argued that limiting the president’s tariff authority could undermine ongoing trade negotiations, while other Trump officials have said that negotiations have continued with little change after the initial setback in court.
With the tariffs that has already been put into place, there will be certain taxes imposed on goods which are imported to the U.S. For example, 50% tariff on copper imports & steel and aluminum imports. It was also stated that the global tariff exemption which covers goods to the value of no more than $800 will end by 29 August. A threat was made for a 200% tariff on imported pharmaceuticals, but this has not been confirmed.