Need to know
President Donald Trump suffered a big blow after America’s highest court ruled his sweeping taxes imposed on US imports are illegal – but vowed to use another way to impose 10% levy “in three days from now”
Everything you need to know
- President Trump sent shockwaves around the world when he announced wide ranging tariffs on “liberation day” last April. Countries around the world – including supposedly close ally the UK – were left facing punishing taxes on goods exported to the States. A deal was later struck between the US and the UK deal removing some trade barriers, but many firms still faced a hike.
- The Supreme Court has now ruled that the President exceeded his powers by using what is called the International Emergency Economic Powers Act (IEEPA) to impose tariffs on dozens of countries around the world. The 1977 law was meant to be only used for national emergencies.
- It marked Trump’s first major defeat by the Supreme Court, after he gained several wins, including on the deportation of migrants.
- It’s safe to say Trump isn’t pleased. During a press conference, he called Supreme Court ruling “deeply disappointing”.
- The most immediate impact has come from smaller US firms who are now demanding refunds on the extra costs they’ve had to shell out for imported goods they sell. However, this is uncertain given the court ruling was not about that.
- The other issue is whether the Trump administration was just find another way to continue the tariffs. Experts say there are alternative laws that the President could fall back on instead. Trump sounded this warning: “Countries that have been ripping us off for years are ecstatic, they are so happy, and they are dancing in the streets. But they won’t be dancing in the streets for long, that I can assure you.”
- Trump went on: “Other alternatives will now be used to replace the ones the court incorrectly rejected,” adding they they could bring in more money. He claimed it would use another law to impose an additional 10% levy.
- All of which means more uncertainty for companies – including those in the UK that export to the States. Trump was vague about existing deals, such as that struck with the UK, adding: “Some of them stand, many of them won’t.”
- William Bain, head of trade policy at the British Chambers of Commerce, said: “While this decision gives clarity on the President’s executive powers to raise tariffs it does little to clear the murky waters for business.” He added: “For the UK, the priority remains bringing tariffs down wherever possible. It’s important the UK government continues to negotiate on issues like steel and aluminium tariffs and reduces the scope of other possible duties.”
- Thomas Pugh, UK chief economist at consultants RSM, said: “Crucially, for the UK, the ruling doesn’t impact the tariffs on steel and automotives. Therefore, it is far from clear whether the situation on the ground for exporters will change much in the near term.”
- Ensure our latest headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as your Preferred Source in your Google search settings.
