The U.S. Court of International Trade ruled Thursday that President Trump’s 10% tariff on most imports violates the law, dealing another blow to Trump’s effort to create a new trade regime for the U.S. economy.
Trump imposed the 10% tariff in February, soon after the Supreme Court struck down a previous set of tariffs that were imposed under the International Emergency Economic Powers Act of 1977. Switching legal authorities, Trump applied the 10% global tariff under Section 122 of the Trade Act of 1974, which allows the White House to impose tariffs for up to 150 days in response to “large and serious United States balance-of-payments deficits” and “fundamental international payments problems.”
In a 2-1 ruling, the panel of judges on the trade court ruled that Trump’s effort did not meet the criteria defined by the law.
The Trump administration is expected to appeal the ruling, but there is now the distinct possibility that the White House will be required to reimburse American importers who have paid the tariff fees over the last two months, just as it has had to do with the previous tariff fees.
EU gets a tariff deadline: Earlier Thursday, before the U.S. court announced its ruling, Trump said the European Union has until July 4 to ratify a trade agreement with the United States.
The announcement of the new deadline comes less than a week after Trump threatened to impose a 25% tariff on vehicles imported from the EU. Trump accused the 27-nation trading bloc of failing to live up to the terms of a handshake deal that was reached last summer with European Commission President Ursula von der Leyen.
Under the terms of that agreement, the EU said it would eliminate tariffs on a variety of industrial and agricultural goods imported from the United States and purchase $750 billion worth of U.S. energy products, while the U.S. agreed to cap tariffs on EU goods at 15%. With some members of the European Parliament pushing back on the agreement — due in part to Trump’s threats last year to seize Greenland, which is part of Denmark — the EU has not yet ratified the agreement.
“I’ve been waiting patiently for the EU to fulfill their side of the Historic Trade Deal we agreed in Turnberry, Scotland, the largest Trade Deal, ever!” Trump said on his social media site. “A promise was made that the EU would deliver their side of the Deal and, as per Agreement, cut their Tariffs to ZERO! I agreed to give her until our Country’s 250th Birthday or, unfortunately, their Tariffs would immediately jump to much higher levels.”
Late Wednesday, talks between EU lawmakers and representatives of EU member nations over ratification of the trade deal ended inconclusively. One of the reported sticking points is the inclusion of safeguards in the agreement that would protect the EU if the U.S. fails to deliver on its promises, introduces new tariffs or threatens EU member states.
Swedish Member of European Parliament Karin Karlsbro, an EU negotiator, said the talks were productive, but there is still work to do. “It is important that we get a Trump-proof agreement in place before we have a final deal,” she said, per Politico.
What comes next: Trump’s deadline gives the EU less than two months to push the trade agreement through a complicated internal process. Both the European Parliament and the European Council, which includes the heads of state of the member nations, must approve the final text, which is still under negotiation. While the EU says it is confident that it can complete the effort, doing so by the July 4 deadline may prove to be a challenge.
Today’s U.S. trade court ruling, along with the Supreme Court ruling against Trump’s tariffs in February, may add more hurdles. If EU lawmakers believe that much of Trump’s trade effort could be overturned by the courts, it may make it that much harder to ratify a trade treaty whose future could be in doubt.