trade war

court-blocks-trump’s-retaliatory-tariffs,-amplifying-trade-war-chaos

Court blocks Trump’s retaliatory tariffs, amplifying trade war chaos

Trump quickly appeals

Trump has immediately appealed the ruling and is expected to take the case to the Supreme Court. He’s arguing that the court cannot define what constitutes a “national emergency,” which is a political question he believes only Congress can address.

White House spokesperson Kush Desai has made it clear that Trump remains “committed to using every lever of executive power to address” the “crisis” of trade deficits, CNN reported, which he claimed have “decimated American communities, left our workers behind, and weakened our defense industrial base.”

But the three-judge panel has already indicated that Trump may be focusing on the wrong question in seeking to further his case, noting that the “question here is not whether something should be done; it is who has the authority to do it.” According to the court, Trump does not.

Americans celebrate Trump loss

Ultimately, the judges agreed with US plaintiffs who alleged that tariffs risked vast harms to Americans, including spiking prices on their goods. Earlier this month, the Consumer Technology Association forecasted that Americans could pay more than $123 billion more annually for just 10 common gadgets hit with tariffs.

Oregon Attorney General Dan Rayfield, among other state enforcers who are suing, issued a statement criticizing Trump’s previously “unchecked authority” that he said threatened to “upend the economy” and celebrating the win for “working families, small businesses, and everyday Americans.”

“President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating,” Rayfield said. “They triggered retaliatory measures, inflated prices on essential goods, and placed an unfair burden on American families, small businesses and manufacturers.”

Problems with sourcing and pricing were decreasing orders even to American businesses, suing US firms said, and for many, the sudden spike in costs at the border caused “a large, immediate, strain” on cash flow. At least one plaintiff alleged they could go out of business and be unable to pay employees without an injunction soon. One cycling store feared tariffs might cost it about $250,000 by the end of 2025.

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US and China pause tariffs for 90 days as Trump claims “historic trade win”

The deal announced today “did not address what would happen to low-value ‘de minimis’ ecommerce packages shipped from China to the US,” Reuters wrote. The US imposed 120 percent tariffs on those packages.

Treasury Secretary Scott Bessent said today that both governments want to avoid a severing of their economies but that the US still plans to impose tariffs on specific items that the White House wants to be produced in the US. Bessent said that “neither side wants a generalized decoupling. The US is going to do a strategic decoupling in terms of the items that we discovered during COVID were of national security interests, whether it’s semiconductors, medicine, steel, so we still have generalized tariffs on some of those, but both sides agree we do not want a generalized decoupling.”

The S&P 500 index was up about 2.6 percent today as of this writing, while the tech-focused NASDAQ Composite index had risen about 3.5 percent. Neither index has recovered to its record high after months of turmoil caused by Trump’s tariffs.

Reuters quoted Zhiwei Zhang, chief economist at Pinpoint Asset Management in Hong Kong, as saying that the 90-day deal was better than he expected. “I thought tariffs would be cut to somewhere around 50 percent,” Zhang said. “Obviously, this is very positive news for economies in both countries and for the global economy and makes investors much less concerned about the damage to global supply chains in the short term.”

In April, Trump raised tariffs on China while pausing tariff hikes on other countries for 90 days. Trump struck a trade deal with the UK last week, and talks with other countries are continuing.

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