A US Federal Trade Court has declared the 10% global tariff imposed by President Donald Trump illegal. The court ruled Thursday by a 2-1 majority that the tariffs were not justified under a 1974 trade law and that the administration did not have the authority to impose import duties on such a large scale without Congress’s permission. According to Reuters report, the Court of International Trade said in its decision that these tariffs imposed earlier this year are legally invalid. Trump had announced the implementation of these global tariffs through an executive order in February. The court rejected the arguments of the Trump administration. The administration, citing Section 122 of the Trade Act 1974, had argued that America is facing a trade deficit of $ 1.2 trillion and a current account deficit equal to 4% of GDP. However, the judges rejected this, saying that such trade losses did not meet the mandatory requirements of the law. Action was taken after the court’s decision. This matter is also important because the US Supreme Court had already canceled some tariff decisions of the Trump administration, saying that the President’s emergency economic powers are not unlimited. Small traders had argued in the court that the new order with 10% tariff was brought to bypass the old decision of the Supreme Court. The court accepted that the government had violated the powers given to Congress. However, one judge on the three-member panel disagreed, saying the President should have power in trade matters. Toy manufacturers said – this is our victory. Small traders dependent on the global supply chain have welcomed this decision. Jay May Foreman, CEO of Basic Fun Company, said this is a big win for American companies that rely on global manufacturing to make cheap and safe things. He further said that because of illegal tariffs it was becoming difficult for companies to survive and grow in the market. Now this decision will provide clarity to the companies managing the supply chain. What does this court decision mean for India? Trump has always been vocal about trade agreements and tariffs with India. If the global tariff policy in the US weakens, it could be a positive sign for Indian exporters. This will make it easier for Indian goods to reach the American market and the fear of unexpected increase in costs will be reduced. What will happen next in this case? It is believed that the Trump administration will appeal against this decision. The case will first go to the US Court of Appeals for the Federal Circuit in Washington. If a solution is not found there too, then this matter may once again reach the threshold of the Supreme Court. What is Section 122 of the Trade Act 1974? This gives the President the authority to impose temporary tariffs for 150 days, but this can be used only in times of serious balance of payments crisis or risks to currency stability. America’s trade deficit: Currently America’s goods trade deficit has reached close to 1.2 trillion dollars. Trump imposed tariffs using a 49-year-old law
Source link
[ad_3]
US court declares Trump’s tariff policy illegal: Decision to impose 10% duty cancelled; Court said- President misused powers
