Why was Trump's "equal tariff" deemed "illegal"? What will happen next?

The U.S. Court of Appeals ruled that President Trump's imposition of tariffs on multiple countries is illegal, and this decision may "force" the White House to turn to the B Plan - industry tariffs under the name of national security. According to CCTV News, on August 29 local time, the U.S. Court of Appeals ruled that most of the global tariff policies implemented by U.S. President Trump are illegal. The court stated that the International Emergency Economic Powers Act does not explicitly empower the U.S. president to impose tariffs, and Trump's invocation of this Act to impose tariffs exceeded his authority. The court has halted the tariffs imposed by Trump under the International Emergency Economic Powers Act, including the so-called "equal tariffs" announced on April 2, as well as tariffs aimed at preventing fentanyl-related products. Although ruled invalid, these tariffs will continue to be effective until October 14, to allow the U.S. Supreme Court time to review the case. President Trump criticized the ruling by the Court of Appeals through social media on the same day: "All tariffs are still valid! The partisan court of appeals is wrong. If the tariffs are cancelled, it will be a complete disaster for the United States." However, this ruling does not affect the industry tariffs imposed by the Trump administration under other laws, especially Section 232 of the Trade Expansion Act of 1962, so the so-called industry tariffs on automobiles, steel, and aluminum are not included in this ruling. This means that while the so-called "equal tariffs" face the risk of being overturned by the Supreme Court, the Trump administration may simultaneously expand the coverage of Section 232 tariffs to ensure the continuation of its trade agenda. Core of the Court's ruling: Presidential Power Limits The root of this legal dispute lies in the Trump administration's new interpretation of presidential powers. Earlier, the Trump administration invoked the International Emergency Economic Powers Act of 1977 to implement a series of global tariffs directly bypassing Congress citing national emergency status. In May of this year, the U.S. International Trade Court in New York initially ruled this action illegal. The Court of Appeals upheld the original ruling this time, with judges unanimously agreeing: the U.S. Constitution grants Congress the power to regulate foreign trade, and the president's emergency powers cannot override this. However, the court provided a buffer period in the ruling. These tariffs can be maintained until October 14, so that the U.S. government can appeal to the Supreme Court. This means that until the Supreme Court makes a final ruling, these tariff measures will continue to affect trade partners. Whether the U.S. Supreme Court will accept the case, and the possible timeline for review, will be crucial factors in deciding the fate of these tariff measures. White House B Plan: Industry tariffs with a more "solid" legal basis Unlike the so-called "equal tariffs," another "national security tariff" by the Trump administration has a more solid legal foundation. The U.S. national security tariffs are tariffs for specific industries implemented under Section 232 of the Trade Expansion Act of 1962. As a more mature and enduring standalone law, Section 232 authorizes the president to take trade restriction measures, including tariffs, when imports of certain products are deemed to threaten national security. Augustine Lo, a partner at the Dorsey & Whitney law firm specializing in trade law, stated: Section 232 is a tried and tested reliable method, historically, the courts have given the president considerable discretion in national security investigations and remedial measures. Reportedly, the Trump administration regards these industry tariffs as a "safety net" in response to legal defeats. With the risk of the so-called "equal tariffs" being overturned by the Supreme Court, the future Trump administration may simultaneously expand the coverage of Section 232 tariffs. This way, even if they lose the lawsuit, the government can transfer the existing tariffs to be authorized under new laws, ensuring the continuation of its trade agenda. Expansion of industry tariffs impact: From raw materials to finished products As the core of the B Plan, the Trump administration's expansion of industry tariffs is accelerating. In August of this year, the coverage of steel and aluminum tariffs was significantly expanded, adding over 400 product lines, with tariffs as high as 50% on products containing these metals. These products include building and agricultural equipment, Siasun Robot&Automation, metal cutting machine tools, automotive components, and other complex manufactured goods. Jason Miller, a supply chain management professor at Michigan State University, estimated that the latest measures have impacted imported manufactured goods containing U.S. metal worth over $300 billion. He stated: The coverage of these tariffs is very broad. Now, imported components containing a high percentage of steel and aluminum are being punished. The expansion will continue. The U.S. government plans to open three windows annually for companies to apply to include more products in the tariff range, with the next round of applications starting in September. Additionally, the U.S. Department of Commerce is considering announcing a new batch of automotive component tariffs in mid-September, and launching the process to include copper tariffs by the end of October. These systematic "inclusion processes" indicate that the coverage of tariffs will continue to dynamically expand in the future. This article is a reprint from Wall Street see, GMTEight Editor: Li F.