On May 28th, The federal Court of International Trade has blocked President Donald Trump’s sweeping global tariffs, arguing that emergency laws invoked by the Administration did not give Trump unilateral authority to impose the levies. In the court’s decision, the 3 judge panel stated that the U.S. Constitution gives Congress exclusive powers to regulate trade with other countries, something which Trump cannot supersede. The court also blocked a different set of levies the administration levied on Canada, China and Mexico for what the White House said was in response to the unacceptable flow of drugs and illegal immigrants across the U.S. border.
The next day, a federal appeals court temporarily reinstated the most sweeping of President Trump’s tariffs. The United States Court of Appeals for the Federal Circuit in Washington said it was pausing the lower court’s ruling to consider the government’s appeal, and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9.
It is important to note that this blocking and reinstating of the tariffs did not impact the auto parts and imported automobile tariffs- those are still in effect. The auto and auto parts tariffs were not implemented using the emergency powers act, but relied on a 1962 trade law.
Then Friday, the president announced a doubling of the tariffs of imported steel and aluminum from 25% to 50%. With a significant amount of steel used in auto production imported from other countries and over 80% of automotive grade aluminum used in domestic auto production coming from Quebec, this will further increase costs of new automobiles produced using these materials. The initial 25% tariff on steel and aluminum was estimated to increase the list price of new automobiles between $1,500-3,000, so that price hike would likely double.
