Description: The US Federal Circuit Court in Washington D.C. has upheld a decision in May, brought forward by the International Trade Court in New York and classified Trump’s tariff policy as illegal overstepping of the use of emergency power. The tariffs in question was the reciprocal rates announced by the US President on 02 Apr while the other tariffs imposed to trading partners and adversaries regarding steel and aluminum would remain in place. Trump has previously justified the imposition of tariffs according to the International Emergency Economic Powers Act (IEEPA) from 1977, which is used in states of emergency and exclusively when US national interests are endangered. The Federal Court in Washington stated that the contested legality of the tariffs would most likely end up before the US Supreme Court, as the Trump administration would insist on keeping the measures in place in order to avoid the complete downfall of its foreign economic policy agenda. The deadline for the appeal on the decision has been set on 14 Oct when the US Supreme Court would rule whether Trump’s tariffs are legal, which would have ranging ramifications to the US domestic economy and to the global markets as well as uncertainty would fuel countries currently having concluded trade deals with the US.
Impact: The two separate rulings contesting the legality of the tariffs imposed by the US President could cause significant economic instability, and considerably compromise the negotiating position of the US, especially in dealing with China as its major geopolitical adversary. The decision from the Courts would most certainly end up before the US Supreme Court, which has traditionally aligned with Trump’s policies so far. The Trump administration is expected to prevail in the US Supreme Court, as the ramifications from declaring the tariffs illegal would inflict significant blows to both Trump’s foreign policy agenda and the US national economy. The ultimate decision would dictate whether the global markets would experience a reoccurring instability or whether Trump’s aggressive and assertive foreign policy through the tariffs would remain in place.