The US Court of Appeals for the Federal Circuit on Tuesday granted a temporary pause on Court Of International Trade’s (CIT) ruling that President Donald Trump did not have the power to impose tariffs by invoking emergency powers under the International Emergency Economic Powers Act (IEEPA).
This means that President Trump’s tariffs will remain in place for now as the Court of Appeals continues to hear Trump administration’s appeal against CIT’s decision.
After President Donald Trump issued an executive order on April 2, invoking powers vested under the IEEPA imposing a 10% ad valorem duty on “all imports from all trading partners”, markets around the world reacted sharply. Notably, President Trump became the first President in US history to invoke emergency powers under the IEEPA in order to impose tariffs.
Court Of International Trade’s Judgment
The CIT’s panel of Judges Gary S. Katzmann, Timothy M. Reif and Jane A. Rastani observed that the US Constitution assigns Congress the exclusive powers to “lay and collect Taxes, Duties, Imposts and Excises,” and to “regulate Commerce with foreign Nations.”
Furthermore, Court delved into the nation’s past with regard to tariffs and concluded that early in the nation’s history, tariffs were a key means by which the federal government raised money to pay wages and to fund the national debt. However, the revenue-raising purpose of tariffs declined significantly since the ratification of the Sixteenth Amendment in 1913 permitted the imposition of income taxes.
Court concluded that Congress delegated Narrower Authority to the President through IEEPA than it did through TWEA (Trading With The Enemy Act).
The bench noted-
“The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 (“IEEPA”) delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world. The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
Moreover, the Court said that the Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The Trump administration filed an appeal and was able to get a favourable ruling the very next day.
Court Of Appeals
The appeals court has scheduled the matter for arguments on July 31. Importantly, the Court will decide on whether the IEEPA confers the emergency powers upon the President to impose tariffs.
Author: Nitish Kashyap