Reckless Donald Trump At It Again

President Donald Trump has reacted with predictable bluster and defiance against the US Court of International Trade’s ruling on Wednesday. The judges struck down the sweeping April 2 reciprocal tariffs slapped on Washington’s major trading partners, as well as the “trafficking tariffs” imposed on China, Canada and Mexico, to curb the flow of fentanyl opioids. The temporary stay on the “liberation day” levies granted subsequently by a US Court of Appeal for the Federal Circuit has apparently emboldened him further. President Trump swiftly announced a doubling of the tariffs that were slapped in March on steel and aluminium imports to 50 per cent with effect from Wednesday.

The trade court called his bluff over the invocation of the 1977 International Emergency Economic Powers Act (IEEPA), a legacy from the Trading with the Enemy Act, designed to address genuine threats to national security, not matters of balance of payments. They declared as invalid and illegal and a misuse of power the executive orders the president issued to impose the blanket levies on America’s largest trading partners, thereby bypassing the authority of Congress to legislate tariffs. Commentators have bristled at the recourse to IEEPA as an extreme act of provocation, setting aside more moderate alternatives. A lawful and legitimate devise to address concerns over serious US trade deficits might have been the temporary and modest tariff limit, stipulated under the 1974 Trade Act. Similarly, the 1930 Tariff Act authorises a 50 per cent tariff rate to counter unfair discrimination against American businesses in the hands of foreign powers.

The ruling, last week, was in response to two separate challenges brought against the president’s controversial policies. In one, a group of American firms, led by the Liberty Justice Centre, an advocacy body, argued that the levies were proving an enormous burden. In the second, 12 states, led by Oregon, said that the tariffs would make the procurement of essential supplies expensive for publicly funded organisations. Amplifying these concerns, goods imports to the US plunged to record levels in April, down 19.8 per cent over March, the largest drop in the Census Bureau’s figures compiled since the 1990s. The sharp slump could, in part, be explained by the rush among firms to ramp up imports ahead of the “liberation day” tariff shock. Consumer spending also slowed in April, according to the Bureau of Economic Analysis data.

President Trump has vowed to move the Supreme Court should the federal court of appeal vacate the stay. The hope is that the latest judicial momentum will spur the US Congress and capitals around the world into action to mount a concerted challenge against the Trump administration’s reckless and dangerous path. This is the need of the hour to protect the American citizens and the global rules-based order.

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