The tariffs that Donald Trump enacted to replace the ones that the Supreme Court overturned in February were illegal too, the U.S. trade court ruled on Thursday.
In the latest blow to the president’s signature economic agenda, a three-member panel on the Manhattan court sided with two small businesses and Washington state in challenging Trump’s authority to impose the 10 percent global tariffs on most imports under Section 122 of the Trade Act of 1974.
However, the court stopped short of invalidating the tariffs on any other party, including the 24 other states that had asked for an injunction.
The panel’s ruling was 2-1.
The two small businesses in question were toy company Basic Fun! and spice importer Burlap & Barrel.
“This decision is an important win for American companies that rely on global manufacturing to deliver safe and affordable products. Unlawful tariffs make it harder for businesses like ours to compete and grow,” Jay Foreman, CEO of Basic Fun!, said in a statement, Reuters reported.
“We are encouraged by the court’s recognition that these tariffs exceeded the President’s authority. This ruling brings needed clarity and stability for companies navigating global supply chains," he added.
White House spokesman Kush Desai told the Daily Beast that the Trump administration is reviewing legal options and “maintains confidence in ultimately prevailing.”
“President Trump has lawfully used the tariff authorities granted to him by Congress to address our balance of payments crisis,” he said.
The ruling could mean that the Trump administration will have to pay back even more income generated from tariffs.
Earlier this week, Trump was still grumbling about that after the Supreme Court overturned his initial tariffs in February.
The court ruled that the president didn’t have the authority to impose tariffs under the 1977 International Emergency Economic Powers Act (IEEPA), which has historically been used to apply limited sanctions and other economic controls.
“We had an unfortunate ruling out of the Supreme Court, but the good news is I’m able to do it a different way. They said use the other way. There was no reason for that. It was terrible. Actually terrible,” Trump said.
The tariffs he enacted in their place later that month, he claimed, were “a little bit more complex,” but also “better.”
Apparently not, according to the trade court.
Hours earlier, Trump was operating under the assumption that his tariffs would still be in effect when he gave European allies a deadline of July 4 to “fulfill their side of the Historic Trade Deal,” or else face tariffs at “much higher levels.”
