sweeping tariff

WASHINGTON — The Supreme Court granted an unusually quick hearing on President Trump’s sweeping tariffs on Tuesday, putting a policy at the center of his economic agenda squarely before the nation’s highest court.

The tariffs will remain in place in the lead-up to arguments set for November, a lightning-fast timetable by the Supreme Court’s typical standards.

The court agreed to take up an appeal from the Trump administration after lower courts found most of his tariffs illegal.

The small businesses and states that challenged them also agreed to the accelerated timetable. They say Trump’s import taxes on goods from nearly every country in the world have nearly driven their businesses to bankruptcy.

Two lower courts have agreed that Trump didn’t have the power to impose tariffs on nearly every country on earth under an emergency powers law, though a 7-4 appeals court has left them in place for now.

The Trump administration asked the justices to intervene quickly, arguing the law gives him the power to regulate imports and striking down the tariffs would put the country on “the brink of economic catastrophe.”

The case will come before a court that has been reluctant to check Trump’s extraordinary flex of executive power. One big question is whether the justices’ own expansive view of presidential authority allows for Trump’s tariffs without the explicit approval of Congress, which the Constitution endows with the power to levy tariffs. Three of the justices on the conservative-majority court were nominated by Trump in his first term.

While the tariffs and their erratic rollout have raised fears of higher prices and slower economic growth, Trump has also used them to pressure other countries into accepting new trade deals. Revenue from tariffs totaled $159 billion by late August, more than double what it was at the same point a year earlier.

Solicitor General D. John Sauer has argued that the lower court rulings are already affecting those trade negotiations. If the tariffs are struck down, the U.S. Treasury might take a hit by having to refund some of the import taxes it’s collected, Trump administration officials have said. A ruling against them could even the nation’s ability to reduce the flow of fentanyl and efforts to end Russia’s war against Ukraine, Sauer argued.

The administration did win over four appeals court judges who found the 1977 International Emergency Economic Powers Act lets the president regulate importation during emergencies without explicit limitations. In recent decades, Congress has ceded some tariff authority to the president and Trump has made the most of the power vacuum.

The case involves two sets of import taxes, both of which Trump justified by declaring a national emergency: the tariffs first announced in April and the ones from February on imports from Canada, China and Mexico.

It doesn’t include his levies on foreign steel, aluminum and autos, or the tariffs Trump imposed on China in his first term that were kept by Democratic President Biden.

Trump can impose tariffs under other laws, but those have more limitations on the speed and severity with which he could act.

Whitehurst writes for the Associated Press.

WASHINGTON — A federal appeals court ruled Friday that President Trump had no legal right to impose sweeping tariffs but left in place for now his effort to build a protectionist wall around the American economy.

The U.S. Court of Appeals for the Federal Circuit ruled Trump wasn’t legally allowed to declare national emergencies and impose import taxes on almost every country on earth, a ruling that largely upheld a May decision by a specialized federal trade court in New York.

But the 7-4 court did not strike down the tariffs immediately, allowing his administration time to appeal to the Supreme Court.

The president vowed to do just that. “If allowed to stand, this Decision would literally destroy the United States of America,” Trump wrote on his social medial platform.

The ruling complicates Trump’s ambitions to upend decades of American trade policy completely on his own. Trump has alternative laws for imposing import taxes, but they would limit the speed and severity with which he could act. His tariffs — and the erratic way he’s rolled them out — have shaken global markets, alienated U.S. trading partners and allies and raised fears of higher prices and slower economic growth.

But he’s also used the levies to pressure the European Union, Japan and other countries into accepting one-sided trade deals and to bring tens of billions of dollars into the federal Treasury to help pay for the massive tax cuts he signed into law July 4.

“While existing trade deals may not automatically unravel, the administration could lose a pillar of its negotiating strategy, which may embolden foreign governments to resist future demands, delay implementation of prior commitments, or even seek to renegotiate terms,” Ashley Akers, senior counsel at the Holland & Knight law firm and a former Justice Department trial lawyer, said before the appeals court decision.

The government has argued that if the tariffs are struck down, it might have to refund some of the import taxes that it’s collected, delivering a financial blow to the U.S. Treasury.

“It would be 1929 all over again, a GREAT DEPRESSION!” Trump said in a previous post on Truth Social.

Revenue from tariffs totaled $142 billion by July, more than double what it was at the same point the year before. Indeed, the Justice Department warned in a legal filing this month that revoking the tariffs could mean “financial ruin” for the United States.

The ruling involves two sets of import taxes, both of which Trump justified by declaring a national emergency under the 1977 International Emergency Economic Powers Act (IEEPA):

— The sweeping tariffs he announced April 2 — “Liberation Day,’’ he called it — when he imposed “reciprocal’’ tariffs of up to 50% on countries with which the United States runs trade deficits and a “baseline’’ 10% tariff on just about everyone else. The national emergency underlying the tariffs, Trump said, was the long-running gap between what the U.S. sells and what it buys from the rest of the world. The president started to levy modified the tariff rates in August, but goods from countries with which the U.S. runs a surplus also face the taxes.

— The “trafficking tariffs’’ he announced Feb. 1 on imports from Canada, China and Mexico. These were designed to get those countries to do more to stop what he declared a national emergency: the illegal flow of drugs and immigrants across their borders into the United States.

The Constitution gives Congress the power to impose taxes, including tariffs. But over decades, lawmakers have ceded authorities to the president, and Trump has made the most of the power vacuum.

But Trump’s assertion that IEEPA essentially gives him unlimited power to tax imports quickly drew legal challenges — at least seven cases. No president had ever used the law to justify tariffs, though IEEPA had been used frequently to impose export restrictions and other sanctions on U.S. adversaries such as Iran and North Korea.

The plaintiffs argued that the emergency power law does not authorize the use of tariffs.

They also noted that the trade deficit hardly meets the definition of an “unusual and extraordinary’’ threat that would justify declaring an emergency under the law. The United States, after all, has run trade deficits — in which it buys more from foreign countries than it sells them — for 49 straight years and in good times and bad.

The Trump administration argued that courts approved President Richard Nixon’s emergency use of tariffs in a 1971 economic crisis that arose from the chaos that followed his decision to end a policy linking the U.S. dollar to the price of gold. The Nixon administration successfully cited its authority under the 1917 Trading With Enemy Act, which preceded and supplied some of the legal language used in IEEPA.

In May, the U.S. Court of International Trade in New York rejected the argument, ruling that Trump’s Liberation Day tariffs “exceed any authority granted to the President’’ under the emergency powers law. In reaching its decision, the trade court combined two challenges — one by five businesses and one by 12 U.S. states — into a single case.

In the case of the drug trafficking and immigration tariffs on Canada, China and Mexico, the trade court ruled that the levies did not meet IEEPA’s requirement that they “deal with’’ the problem they were supposed to address.

The court challenge does not cover other Trump tariffs, including levies on foreign steel, aluminum and autos that the president imposed after Commerce Department investigations concluded that those imports were threats to U.S. national security.

Nor does it include tariffs that Trump imposed on China in his first term — and President Joe Biden kept — after a government investigation concluded that the Chinese used unfair practices to give their own technology firms an edge over rivals from the United States and other Western countries.

Trump could potentially cite alternative authorities to impose import taxes, though they are more limited. Section 122 of the Trade Act of 1974, for instance, allows the president to tax imports from countries with which the U.S. runs big trade deficits at 15% for 150 days.

Likewise, Section 301 of the same 1974 law allows the president to tax imports from countries found to have engaged in unfair trade practices after an investigation by the Office of the U.S. Trade Representative. Trump used Section 301 authority to launch his first-term trade war with China.

Wiseman and Whitehurst write for the Associated Press. AP writers Mark Sherman and Josh Boak contributed to this story.

WASHINGTON — A federal trade court on Wednesday blocked President Trump from imposing sweeping tariffs on imports under an emergency-powers law.

The ruling from a three-judge panel at the New York-based Court of International Trade came after several lawsuits arguing Trump has exceeded his authority, left U.S. trade policy dependent on his whims and unleashed economic chaos.

The White House did not immediately respond to a message seeking comment. The Trump administration is expected to appeal.

At least seven lawsuits are challenging the levies, the centerpiece of Trump’s trade policy.

Tariffs must typically be approved by Congress, but Trump has says he has the power to act because the country’s trade deficits amount to a national emergency. He imposed tariffs on most of the countries in the world at one point, sending markets reeling.

The plaintiffs argue that the 1977 International Emergency Economic Powers Act does not authorize the use of tariffs.

Even if it did, they say, the trade deficit does not meet the law’s requirement that an emergency be triggered only by an “unusual and extraordinary threat.” The U.S. has run a trade deficit with the rest of the world for 49 consecutive years.

Trump’s tendency to levy extremely high import taxes and then retreat has created what’s known as the “TACO” trade, an acronym coined by the Financial Times’ Robert Armstrong that stands for “Trump Always Chickens Out.” Markets generally sell off when Trump makes his tariff threats and then recover after he backs down.

Trump was visibly offended when asked about the phrase Wednesday and rejected the idea that he’s “chickening out,” saying that the reporter’s inquiry was “nasty.”

“You call that chickening out?” Trump said. “It’s called negotiation,” adding that he sets a “ridiculous high number and I go down a little bit, you know, a little bit” until the figure is more reasonable.

Trump defended his approach of jacking up tariff rates to 145% on Chinese goods, only to pull back to 30% for 90 days of negotiations. He similarly last week threatened to impose a 50% tax on goods from the European Union starting in June, only to delay the tariff hike until July 9 so that negotiations can occur while the baseline 10% tariff continues to be charged. Similar dramas have played out over autos, electronics and the universal tariffs that Trump announced on April 2 that were based in part on individual trade deficits with other countries.

Trump imposed tariffs on most of the countries in the world in an effort to reverse America’s massive and longstanding trade deficits. He earlier plastered levies on imports from Canada, China and Mexico to combat the illegal flow of immigrants and the synthetic opioids across the U.S. border.

His administration argues that courts approved then-President Richard Nixon’s emergency use of tariffs in 1971, and that only Congress, and not the courts, can determine the “political” question of whether the president’s rationale for declaring an emergency complies with the law.

Trump’s Liberation Day tariffs shook global financial markets and led many economists to downgrade the outlook for U.S. economic growth. So far, though, the tariffs appear to have had little impact on the world’s largest economy.

A lawsuit was filed by a group of small businesses, including a wine importer, V.O.S. Selections, whose owner has said the tariffs are having a major impact and his company may not survive.

A dozen states also filed suit, led by Oregon. “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Atty. Gen. Dan Rayfield said.

Whitehurst and Boak write for the Associated Press. A.P. writers Zeke Miller and Paul Wiseman contributed to this report.