Lifting of Trump taxes finally in sight

Trade wars

'Illegal levies' Victor Schwartz, a small New York importer convinced U.S. judges to block Trump's levies

According to the federal court, no national economic emergency justifies the U.S. president's choice. White House appeals as uncertainty continues in wine and food markets

Federal court says no national economic emergency justifies US president's choice. White House appeals as uncertainty continues in wine and food markets

The Court of International Trade (USCIT) has ruled Donald Trump' s decision to impose tariffs on goods imported into the US starting January 2025 to be illegal. These tariffs, which the US president, complete with a table, had announced live on television and allowed to take effect in recent months, plunging world markets into chaos, would in fact be "illegal" and in violation of the provisions of the US Constitution. In practice, Trump would have overstepped the bounds of national law.

The Court's reasons

According to the federal judges (on a three-member panel, one of whom had been appointed during Trump's first presidency), it is not for the president to impose additional import tariffs, which Trump himself had justified by invoking a 1977 emergency law to protect the economy. Such a decision, according to the Constitutional Charter, to which the International Trade Court refers, is solely within the jurisdiction of Congress. President Trump has already announced his intention to appeal the ruling, stressing through a spokesman that "it is not for unelected judges to decide how to properly handle a national emergency."

A small wine company among the plaintiffs

The federal court ruling followed the filing of two separate lawsuits by a number of U.S. governments (including New York State), which oppose Trump's economic policies, and by a nonprofit organization (the Liberty Justice Center), which five local businesses had joined. According to US media, the wine industry in particular has retaliated for the time being.

New York-based Vos Selections, a family-owned company that imports wines and spirits, is one of the stars of the moment, being one of five companies that won the class action lawsuit against the White House, in which the U.S. economic policy of additional import taxes was deemed harmful. "An unexpected victory," owner Victor Owen Schwartz told CNN, announcing that he would "go all the way to the Supreme Court." As in David versus Goliath.

What happens in the markets?

In fact, nothing is changing at the border. The tariffs are still due, but the justices have given the White House 10 days to suspend the tariffs (including some measures against Mexico, Canada and China in response to drug trafficking and illegal immigration). Since Washington has announced it will appeal, it must wait for the judges to rule on the appeal. If necessary, it will go to the higher courts, up to the Supreme Court. Should the ruling gradually prove unfavorable to Trump, it would open up the possibility for companies that have so far been hardest hit by the import duties to be repaid with interest.

Meanwhile, global markets reacted positively to the announcement: U.S. futures rose, the dollar rebounded and Asian equity markets were in the plus. The ruling will certainly affect ongoing trade talks, starting with those with the European Union, which must find a solution by July 9. The wine and food world, and not only that, is on the sidelines for now.

Source: Gambero Rosso