US Federal Court Rules Global Tariffs Imposed By Trump Are 'Illegal' - What The Court Said? What Can Trump Do Now?

(MENAFN- Live Mint) Dealing a major blow to the US administration's trade strategy, a federal appeals court in the US on Friday ruled that President Donald Trump's global tariffs , including the 50% duties imposed on India, were illegally applied, reported Hindustan Times.

The report added that US Court of Appeals for the Federal Circuit - equivalent of a high court in India - ruled that Trump exceeded his authority by invoking a 1970s-era emergency law to impose the sweeping tariff regime. The court noted that Trump upheld an earlier decision by the Court of International Trade.

But the ruling will not take immediate effect, as the ruling will not take immediate effect. The US President will have enough time to challenge the decision in the Supreme Court.

The ruling by the federal court affects Trump's“reciprocal tariffs” that took effect August 7 and August 28, which includes the punitive duties on India.

Trump had imposed 50% tariff rate on India, which comprises a 25% reciprocal tariff and an additional 25% penalty for purchasing Russian oil.

The US President's decision casts doubt over his tariff reduction deals with Japan, the European Union, the United Kingdom and South Korea. His decision is likely to affect penalties imposed on Canada and Mexico over alleged failures to counter cross-border drug trade.

What did the ruling said:

The Federal Circuit in its ruling mentioned that the International Emergency Economic Powers Act (IEEPA) grants the president authority to deal with national economic emergencies, however, it does not explicitly provide power to impose tariffs and duties.

By claiming large global trade deficits and an unchecked cross-border drug epidemic constituted a national economic emergency, the administration had invoked the rarely used emergency law.

Trump admit reacts:

According to Bloomberg, the Trump administration had filed urgent statements by Treasury Secretary Scott Bessent, commerce secretary Howard Lutnick and secretary of state Marco Rubio warning of“dire foreign-policy consequences.”

Meanwhile, Bessent warned the ruling would lead to“dangerous diplomatic embarrassment” for the United States. Also, Trump responded defiantly on his Truth Social platform, calling the Federal Circuit a“highly partisan” court.

“If allowed to stand, this decision would literally destroy the United States of America,” Trump posted.

Alternative options for Trump:

After the ruling, Trump can now retains alternative legal authorities for imposing import taxes .

The Trump administration can also invoke levies under Section 232 of the Trade Expansion Act of 1962, which it with tariffs on foreign steel, aluminium and automobiles.

However, the administration requires a Commerce Department investigation and cannot be imposed at the president's discretion. This may take months to implement.

The administration retains the option to appeal directly to the higher court, which has largely backed Donald Trump on other matters. Also, the White House could allow the Court of International Trade to revisit the matter first.

With agency inputs.

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