US trade court blocks Trump's sweeping tariffs. What happens now?
A US federal court has blocked President Donald Trump's sweeping global trade tariffs, in a major blow to a key component of his economic policies.
The Court of International Trade ruled that an emergency law invoked by the White House did not give the president unilateral authority to impose tariffs on nearly every one of the world's countries.
The New York-based court said the US Constitution gave Congress exclusive powers to regulate commerce with other nations, and that this was not superseded by the president's remit to safeguard the economy.
The White House has asked the court to block the order suspending tariffs while it appeals the case.
Who brought the court case?
The ruling was based on two separate cases. The nonpartisan Liberty Justice Center brought one case on behalf of several small businesses that import goods from countries that were targeted by the duties, while a coalition of US state governments also challenged the import taxes.
The two cases marked the first major legal challenges to Trump's so-called "Liberation Day" tariffs and went to the Court of International Trade, a part of the federal court system with specific authority over trade.
A three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA), a 1977 law that Trump cited to justify the tariffs, did not give him the power to impose the sweeping import taxes.
The court also blocked a separate set of levies the Trump administration imposed on China, Mexico and Canada, in response to what the administration said was the unacceptable flow of drugs and illegal immigrants into the US.
However, the court was not asked to address tariffs imposed on some specific goods like cars, steel and aluminium, which fall under a different law.
What has the reaction been so far?
The White House has criticised the ruling, though Trump has not yet commented directly.
"It is not for unelected judges to decide how to properly address a national emergency," White House deputy press secretary Kush Desai said in a statement.
But Letitia James, the attorney general of New York, one of 12 states involved in the lawsuit, welcomed the decision.
"The law is clear: no president has the power to single-handedly raise taxes whenever they like," she said.
Stock markets in Asia and US rose in early trading on Thursday following the ruling while European markets opened flat.
What happens now?
For now, the court has given the White House has 10 days to complete the bureaucratic process of halting the tariffs, although some are currently suspended anyway.
Meanwhile, the White House has asked the court to block the order while it appeals it.
The case could eventually go to the Supreme Court - the highest court in the US - but even if Trump lost there it would not necessarily spell the end of his tariff plans.
For one thing, the ruling noted that the president does have the power to impose tariffs of up to 15% for 150 days to address concerns about the balance of trade, which the White House had argued were an emergency.
If the administration chose to go that route, those new tariffs could go into effect within days, according to analysts at Goldman Sachs.
Trump could also turn to the other, more established laws that he used in his first term to justify tariffs, which focus on issues such as national security and unfair trade policies. Those require investigations and periods of public comment before tariffs go into effect.
Goldman Sachs said Trump might also turn to an untested part of a 1930 trade law that allows the President to impose tariffs of up to 50% on imports from countries that "discriminate" against the US.
How did we get here?
On 2 April, Trump unveiled an unprecedented global tariff regime by imposing import taxes on most of the US's trading partners.
A 10% baseline tariff was placed on most countries, along with steeper reciprocal tariffs handed down to dozens of nations and blocs, including the EU, UK, Canada, Mexico and China.
Trump argued that the sweeping economic policy would boost American manufacturing and protect jobs, while kick-starting negotiations over trade policies it views as unfair.
Global markets have been thrown into disarray since the announcement, but Trump has since backed down on some tariffs and reduced or delayed others.
What does this mean for businesses and governments facing the tariffs?
For now, John Leonard, a former top official at the CBP, told the BBC that there would not be any changes at the border and that tariffs would still have to be paid.
If the White House is unsuccessful in its appeal, the US Customs and Border Protection Agency (CBP) would then issue directions to its officers to refund the payments, he said.
The ruling also raises questions about ongoing trade talks between the US and other countries. The White House had argued in court hearings that its negotiating position would be weakened if the court struck down the tariffs.
Paul Ashworth, from Capital Economics, said the ruling "will obviously throw into disarray the Trump administration's push to quickly seal trade 'deals' during the 90-day pause from tariffs".
He predicted other countries "will wait and see" what happens next.
What does the ruling mean for the UK-US tariff deal?
The UK and US governments agreed a deal to reduce tariffs on some goods traded between the countries earlier this month.
It included the lowering and removal of import taxes on some of the UK's main exports to America, such as cars, steel and aluminium.
That aspect of the deal is not impacted by the court ruling, but the blanket 10% tariff on most other UK goods entering the US has now been called into question.
How that part of the deal could change remains uncertain following the ruling, with the agreement between both governments yet to be implemented.
The UK government has not commented on the court ruling but said it was working to ensure British businesses can benefit from the deal "as quickly as possible".
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