Prices canceled in the court decision

President Donald Trump’s aggressive sales program struck an important problem this week when a federal court of appeal judged that most of his “reciprocal rates” were illegal.

The American Court of Appeal for the Federal Circuit judged Trump on Friday that Trump exceeded his presidential authority when he imposed samples in almost all countries of the world as part of his announcement of “Liberation Day” of April 2.

Before the action of the court, Trump’s prices had to affect around 69% of imports of American goods, according to the Tax Foundation. If he is licensed, the tasks would have had an impact only about 16%.

The decision injects a high dose of uncertainty into a central principle of Trump’s economic agenda, which has shaken the world economy since April.

For the moment, the decision of the Court of Appeal indicates that homework on the goods of most countries – up to 50% for a few countries – will remain in force until October 14 to allow Trump’s time of administration to appeal the decision to the United States Supreme Court.

The decision of the Court of Appeal affects the “reciprocal prices” that Trump announced on April 2, as well as samples which he had previously imposed in Mexico, Canada and China.

Trump cited the 1977 international economic powers law to justify his radical rates. He declared the trade deficit of the United States with other nations a national emergency and invoked the ieepa to impose steep samples.

The Court of Appeal, however, judged that the ieepa does not give it the power to implement the prices, declaring that power lies only with the Congress.

“The basic power of the congress to impose taxes such as prices is acquired exclusively in the legislative power by the Constitution,” said the court in its decision 7-4.

The decision puts Trump’s samples, which came into force earlier this month after several delays, on fragile land. Trump has imposed prices on more than 60 countries, including a 50% rate on India and Brazil. He also imposed a 10% reference rate on most other countries that have not been affected by a specified reciprocal rate rate.

The court also judged that Trump’s prices on China, Canada and Mexico – which, according to the administration, were necessary because the countries were not enough to limit the alleged fentanyl trafficking in the United States – were illegal.

Trump said he would appeal the decision to the Supreme Court. “If he is allowed to stand up, this decision would literally destroy the United States of America,” he wrote on social networks.

If the high court finally determines that the prices are illegal, there are still other ways to implement Trump, but the scope would probably be much more limited.

For example, Trump could invoke the trade law of 1974, but this law caps the prices at 15% and only for 150 days, unless the congress extends them.

Certain parts of Trump’s agenda remain safe from the court’s decision.

More particularly, its sectoral samples on steel and aluminum are not affected by the decision of the Court of Appeal.

Earlier this month, the Trump administration has expanded its 50% steel and aluminum rates to include more than 400 additional product categories, according to the Ministry of Commerce.

Trump relied on these sectoral prices – often called prices of article 232 – to bypass legal proceedings.

“The prices of article 232 are at the heart of President Trump’s pricing strategy,” said Mike Lowell, partner of the law firm Reed Smith.

“They are not the target of the current dispute, and they are more likely to survive a legal challenge and continue in the next presidential administration, which we have seen with the aluminum and steel prices originally imposed under the first Trump administration,” said Lowell.

The Trump administration would have planned to expand its sectoral prices, including those in steel and aluminum, as a means of bypassing imminent legal battles, according to the Wall Street Journal.

The prices that Trump imposed on China during his first mandate, which former president Joe Biden maintained, should also remain in place despite the decision of the court of appeal.

Finally, the “minimis” exemption was officially eliminated on Friday, so imports assessed at $ 800 or less are now subject to prices and homework, another blow to small and medium -sized American companies, and part of the Trump’s commercial agenda which seems to be safe from legal action.