[Source/Observer Network Qi Qian] According to reports by Bloomberg and CNN, on May 29 local time, the US Court of Appeals approved the Trump administration's request to temporarily reinstate the so-called "reciprocal tariff" policy of the Trump administration. Just one day before, the US Court of International Trade ruled that this tariff policy was "ultra vires" and prevented it from taking effect.

Earlier the same day, the US District Court ruled that several taxes imposed by Trump using "emergency powers" were illegal, ordering a 14-day suspension of his tariff orders. However, this ruling only applies to the two companies that filed the lawsuit.

Bloomberg reported that this legal dispute may inject more uncertainty into the global economy. Previously, Trump's tariff policies, which changed frequently, had already caused unease in the global economy. At the same time, this could weaken the negotiation leverage of the Trump administration against its trading partners.

American political news website Politico also pointed out that within 24 hours, the three court rulings brought new uncertainties to Trump's tariff policies and the negotiations between the US and its largest trading partners. Some foreign officials said this might be beneficial for them.

In 24 hours, three tariff rulings

It was reported that the US Court of Appeals also ordered both parties to submit written arguments regarding the blocking of tariff collection, with relevant documents to be submitted early next month, after which the court will decide the next steps. If approved, or if an appeal to the Supreme Court is subsequently approved, the tariffs will continue. However, Bloomberg noted that there remains a possibility that the appeals court will ultimately support the original ruling and block Trump's tariff policy.

The Trump administration welcomed the above ruling. On the same day, White House trade advisor Navarro told reporters: "I can assure the American people that Trump's tariff agenda remains effective, good, healthy, and will be implemented to protect you, save your jobs and factories."

Screenshot of Trump's announcement of the "reciprocal tariff" on April 2nd

Earlier the same day, the US District Court of Columbia continued the previous ruling of the US Court of International Trade, ruling that several taxes imposed by Trump using "emergency powers" were illegal, ordering a 14-day suspension of his tariff orders. However, this lawsuit was initiated by two toy companies, and the "preliminary injunction" issued by the court currently only applies to these two companies.

In response, White House officials stated that they plan to continue defending the legality of their trade efforts at the US Supreme Court, and indicated that if they are obstructed, Trump will continue to impose the same taxes through other agencies.

White House press secretary Leavitt responded on the 29th: "If the sensitive diplomatic or trade negotiations of President Trump, or any other president, are obstructed by radical judges, the United States cannot function normally. Ultimately, the Supreme Court must end this practice for the sake of our Constitution and national interests."

Just the day before, on the 28th local time, the US Court of International Trade in New York ruled that the administrative order imposing additional tariffs on multiple countries issued by the US government under the International Emergency Economic Powers Act was an ultra vires act and illegal, prohibiting the enforcement of the relevant administrative order.

The ruling of the US Court of International Trade held that the US President has no authority to impose comprehensive tariffs on virtually all trading partners; granting the President "unrestricted tariff power" by Congress violates the Constitution. The International Emergency Economic Powers Act sets limits on when and how the President can impose tariffs. The ruling gave the US government 10 days to complete the procedures for stopping the additional tariffs.

"The biggest setback for Trump in this term"

Bloomberg reported that despite the confidence of the Trump team, the ruling on the 28th was one of the biggest judicial setbacks for Trump in his second term.

AP reported that this ruling effectively negated the legal basis for some of the most iconic and controversial actions taken by Trump during his second term. During his campaign, Trump claimed he would use tariffs to counter what he called unfair treatment of the US by other countries, and the International Emergency Economic Powers Act provided him with the fastest way to fulfill his promises.

According to calculations by Bloomberg Economics, if the ruling on the 28th takes effect, it will reduce the effective average US tariff rate from nearly 27% last month to below 6%. This astronomical tariff level of 27% could potentially lead to stagflation in the US.

After Trump took office, the US average tariff rate surged to 27% - Bloomberg chart

However, before the legal foundation of the International Emergency Economic Powers Act was challenged, the Trump administration had already taken separate legal measures to impose other taxes. It is reported that since Trump took office in January this year, the US Department of Commerce has imposed tariffs on steel, aluminum, cars, and car parts under the "Section 232" clause, and launched investigations into trucks, copper, wood, semiconductors, critical minerals, pharmaceuticals, and aircraft.

Bloomberg believed that these tariffs seemed less likely to be affected in terms of law, but implementing them required months of time, with investigations usually concluding within 270 days. Analysts pointed out that strategic shifts might take time, delaying both the uncertainty of Trump's tariff policies and the timeline for seeing domestic political impacts.

Trump administration officials insisted that they could accelerate the process or take other approaches. However, analysts were skeptical.

"The idea that Trump would activate Plan B and impose tariffs through other means is problematic," James Lucier, managing director of American research firm Capital Alpha Partners, told Bloomberg. "Yes, he will do it. But he doesn't have enough time before the midterm elections to implement tariffs and achieve results."

American trade partners: A good thing

Politico reported that for months, the Trump administration had shown confidence on the world stage, casually lowering tariffs and abandoning them, watching as various countries responded to his tariff threats.

However, the three court rulings within 24 hours have put the Trump administration in a difficult position for the first time, as it struggles to address significant setbacks in its comprehensive trade agenda. Some countries see these rulings as a "pressure relief valve" in US tense, sometimes even stalled, trade negotiations.

"This reduces the pressure on countries to yield to US demands," an unnamed Philippine official said when commenting on the halt ruling on the 28th. However, a day later, the US Court of Appeals temporarily reinstated the "reciprocal tariff" policy, expected to remain in effect until mid-June at least.

"What this judge is essentially trying to do is overturn these agreements, many of which are about to be signed," White House National Economic Council Chairman Kevin Hassett then made a tough statement. "However, the appeals court gives us more time, which means we will have time to complete these agreements. So this is really good news for American workers and farmers."

An unnamed EU official said the ruling on the 28th "strengthens Europe's position" and added that Trump now faces additional pressure to engage in "constructive negotiations." Meanwhile, the EU continues to insist on trade negotiations with the US.

Olof Gill, spokesperson for EU trade and economic security, said in an interview on the 29th: "We are pursuing some outcomes, such as reducing or completely eliminating tariffs on certain industrial products. Regardless of the impact of this ruling, this work is worthwhile. In fact, this is something we have been focusing on for years. Therefore, we believe that continuing negotiations in the current form remains very reasonable."

The report mentioned that apart from the comprehensive taxation reviewed in the court rulings, the 25% tariffs imposed by the US government on cars, steel, and aluminum still exist, and more specific industry tariffs are expected to be imposed on semiconductors, pharmaceuticals, and other industries soon.

Regarding this, Canadian Prime Minister Carney said on the 29th that the Canadian government welcomes the court's ruling on the 28th, but "our trade relationship with the US is still subject to the same unreasonable threats and impacts...the tariffs on steel, aluminum, and the automotive industry, as well as the ongoing threat of tariffs on other strategic industries including wood, semiconductors, and pharmaceuticals."

Carney continued: "Building a new economic and security relationship with the US and strengthening cooperation remains the top priority for Canada's new government."

At the regular press conference on the 29th, Foreign Ministry spokesperson Ma Ning reiterated when answering related questions that China has repeatedly clarified its position on the issue of tariffs. Tariff wars and trade wars have no winners; protectionism harms the interests of all parties and ultimately lacks public support.

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Original source: https://www.toutiao.com/article/7510036621882835468/

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