Court throws Donald Trump’s tariffs into doubt

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A US court may have just torpedoed Donald Trump’s global trade policy.

Last night, the US Court of International Trade found that Trump exceeded his authority in implementing his sweeping “liberation day” tariffs, invalidating the levies and blocking Trump from imposing them.

Global stock markets and S&P 500 futures rose on the news. The dollar also climbed against a basket of other currencies.

The court took issue with the president’s use of the emergency economic powers legislation he cited when he announced the tariffs via executive order last month. 

The executive orders “are declared to be invalid as contrary to law”, a panel of judges ruled.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the president . . . to regulate importation by means of tariffs,” the court said.

Under the US constitution, Congress has the powers to set tariffs. But the Trump administration has argued the International Emergency Economic Powers Act gives the president the ability to do so in a national emergency. 

Trump declared a national emergency on April 2, claiming there was an “unusual and extraordinary threat” to the US economy and national security from the country’s trade relationships owing to factors such as trade imbalances.

Even if the ruling is appealed, it will embolden opponents of the tariffs in corporate America, foreign capitals and the US Congress.

The court heard two similar challenges to Trump’s tariffs this month. In one, a group of US businesses argued the levies harmed them. In the other, 12 states said the tariffs would make it more expensive for publicly funded organisations to buy essential equipment and supplies. 

The “liberation day” tariffs disrupted financial markets for weeks, which eased only as Trump climbed down from the most aggressive levies on trading partners such as China. He’s also delayed other tariffs, depending partly on what other countries are willing to concede in trade deals with the US.

A White House spokesperson criticised the ruling, saying “it is not for unelected judges to decide how to properly address a national emergency”. The administration plans to appeal.

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What we’re hearing

Vice-president JD Vance and Trump’s eldest sons, Eric and Don Jr, helped kick off festivities at this week’s Las Vegas bitcoin conference, promising a wealthy future for digital asset holders as the president moves to lift the reins on the industry. 

Addressing a packed room at the Venetian hotel, Eric Trump said “traditional finance was weaponised” against the crypto community and claimed that crypto transactions were “cheaper,” “faster”, “safer” and “more transparent”. If you can’t tell, he and his brother have gone all-in on crypto.

Eric Trump revved up the industry’s insurgent outsiders fattening their digital wallets by attacking the banking sector: “I hate using the word hate, but honestly, I would love to see some of the big banks go extinct . . . Honestly, they deserve it.”

The FT’s Alex Rogers reported on the maximalist vibe [free to read]:

In a private, whales-only area called The Deep, crypto executives put questions to government officials such as Bo Hines, Trump’s 29 year-old crypto adviser, entered a sweepstake to win Louis Vuitton luggage, played pool, and signed up to fly to outer space on Blue Origin’s New Shepard. 

Trump’s circle also made clear to the crowd that crypto supporters helped put the president back in the White House.

Chris LaCivita, one of Trump’s 2024 campaign managers, said that “so many friends” at the conference had been “instrumental” in the president’s re-election. LaCivita joked that if Trump had lost, he and other supporters of the president would have had to flee the US.

“I can say this: that had we not been successful, including myself, we would’ve been looking at a country with a non-extradition treaty,” said LaCivita.

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