“Watch the courts” was the coded advice I received from a well-connected diplomat in Washington, DC, last month, during the latest round of US tariff upheaval. Democrat Governor Gavin Newsom’s high-profile lawsuit in California, arguing that President Donald Trump’s trade penalties were unlawful, caught the majority of attention. As it turned out, a dozen additional states and a few small businesses filed a second action at the International Trade Court that challenged Trump’s hallmark program.
It begs the important questions of whether the 10% universal tariff can be maintained, whether countries will bother to negotiate, whether Congress will support the president, whether the president will ever be able to implement the broader so-called reciprocal tariffs that are due in July, and, of course, whether the Supreme Court will ultimately respond.
The extremely odd dynamic that underlies Trump’s tariff moves is largely to blame for this. The fundamental legal issue here is the president’s announcement of broad tariff rates on several nations, which led to his now-famous Rose Garden event with the blue board. Generally, and according to the constitution, the US Congress is in charge of trade policy. The Senate and House Trade Committee chairmen, which are branches of the Ways and Means Committee, usually hold extremely strong positions.
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