US Court Upholds Automotive Tariffs

A panel of three judges ruled that the “reciprocal” tariffs enacted by President Donald J. Trump last April are illegal, issuing an order to block their implementation.

However, the ruling leaves intact the 25% tax imposed on vehicles and auto parts, as stipulated by the U.S. Court of International Trade in Manhattan.

The court ruled that the International Emergency Economic Powers Act (IEEPA) enacted in 1977 does not give Trump “unlimited” authority to issue tariffs by executive order.

The panel upheld a lawsuit filed by a group of attorneys general from Democratic-governed states and small business associations, who argued that the US president exceeded his powers by improperly invoking an emergency law to justify the tariffs.

US media reports indicate that this is only the first of seven lawsuits filed by various parties against the protectionist measures implemented by the White House.

The reciprocal tariffs were enacted by President Trump in early April on so-called “Liberation Day,” with different rates for each country with which the United States trades. The measure was immediately questioned by experts due to the dubious methodology used to calculate the percentages to be charged.

These tariffs were suspended for 90 days and replaced by a general 10% tax, in order to give representatives from each country time to reach some kind of agreement aimed at reducing the neighboring country's trade deficit.

It is likely that the ruling will be challenged by the White House in a higher court.