The Trump Administration Tells the Court That Repealing Tariffs Would Be “Catastrophic” for the Economy

Most of the tariffs imposed by Donald Trump in his trade war against the world remain in judicial limbo. The Washington Court of Appeals must decide whether or not to maintain the provisional suspension it issued, which has halted the application of the International Trade Court’s ruling that invalidated these import taxes. Both parties have submitted their arguments, and the Trump administration claims that overturning the tariffs would “catastrophically” harm the economy. In reality, for now, it has been the tariffs that have harmed it.

“The court’s decision unilaterally weakens the negotiating position of the United States in delicate trade negotiations, encouraging other countries to take our nation hostage and catastrophically harm our economy,” the Trump administration argues in its brief, filed on Monday. Meanwhile, the plaintiffs highlight the contradictions between the public statements of Trump’s cabinet members and what they argue before the judges.

The Court of Appeals must now decide on the injunctions, i.e., whether to keep the tariffs in effect while it considers the merits of the case, which has not yet even been presented. If the judges side with the plaintiffs — a group of companies and a dozen Democratic states — the Trump administration has already indicated that it plans to appeal to the Supreme Court to maintain the tariffs in effect as a precaution.

The ruling by the International Trade Court of the United States, the specialized jurisdictional body with authority in this area, issued on May 28, declared the tariffs on imports imposed by Trump under an emergency powers law illegal. The ruling affects the tariffs imposed by Trump on Canada, Mexico, and China, with fentanyl and immigration as pretexts, and the misleadingly named “reciprocal tariffs,” which are currently set temporarily at 10% for most goods from nearly all countries in the world.

The 50% tariffs on aluminum and steel, as well as the 25% tariffs on cars and their components, are not affected. They were not part of the lawsuit and were also issued under another law, citing national security reasons.

In its brief, submitted on Monday, the Trump administration claims that the decision of the International Trade Court “improperly usurps the political decisions of the political powers and assigns the Judiciary a central role in the management of foreign negotiations, the national economy, and national security.”

Donald Trump has other legal options to impose tariffs, and his team has begun to prepare a plan B, but he prefers to use his emergency powers. “The irreparable harm caused by this broad court order does not disappear simply because the president has other tariff powers that could support parts of the contested tariffs,” it states in their arguments.

The Department of Justice, which signed the brief, states that the application of the ruling “would significantly impact negotiations addressing threats to national security and the economy, especially considering that the current suspension of certain tariffs expires on July 9.”

Thus, the government requests that the tariffs remain in effect provisionally while the Court of Appeals processes its appeal and decides on the merits. Alternatively, it asks the judges to maintain them for at least seven days if they do not grant that request, to have time to appeal to the Supreme Court for protection.

Contradictions

Previously, the plaintiffs had submitted their own arguments. The Democratic states, led by New York, emphasize the contradictions within the Trump administration, which, while assuring the judges that the repeal of the tariffs would jeopardize trade negotiations, argues the opposite in the media.

“Senior officials in the Administration have repeatedly and emphatically contradicted these claims. They have confirmed that the president retains sufficient authority over tariffs through laws other than the IEEPA [the International Emergency Economic Powers Act of 1977] and that negotiations with trading partners are not negatively affected by the decision of the International Trade Court,” they noted in their brief, which cites those statements.

Kevin Hassett, director of the National Economic Council, stated that the ruling “will undoubtedly not affect negotiations” over trade agreements with other countries, and explained that “there are three or four other ways” in which the president can impose tariffs, even if he cannot do so under the IEEPA. Peter Navarro, the president’s senior trade advisor, claimed that “nothing has really changed” and that the Administration continues to receive calls from countries wanting an agreement. Howard Lutnick, Secretary of Commerce, echoed this sentiment: “[The president] has so many other authorities that, even in the strange and unusual circumstance that this one were removed, we would just have to turn to another, and another, and another,” he said.

The contrast between public statements and arguments before the court is evident. The plaintiffs emphasize it repeatedly. “The defendants’ alleged need for a suspension to strengthen the president’s influence in international negotiations is not reason for a suspension when that influence is based on the claim of an authority that he clearly does not have. The International Trade Court correctly held that the general tariffs in question exceed any authority that Congress delegated to the president under the IEEPA. That decision simply requires the president to remain within the limits that all other presidents have followed for the past 50 years,” it argues.

The Democratic states believe that Trump has overstepped his powers, violating the law and the Constitution. “This case is not about the president’s power under Article II [of the Constitution] over foreign policy or national security, but about Congress’s power under Article I over taxes and tariffs,” they state in their brief, requesting that the ruling be enforced.