Senior Trump administration officials on Thursday downplayed the impact of a U.S. trade court ruling that blocked the most sweeping tariffs. imposed by the president Donald Trump, while expressing confidence that it would be overturned on appeal.
In addition, government officials also insisted that the government can employ other legal avenues to maintain the tariffs.
Meanwhile, financial markets reacted with cautious optimism on Thursday, following a new twist in Trump's chaotic trade war that has already sent markets into a tailspin. The previous day, the U.S. Court of International Trade ruled that Trump had overstepped his authority by imposing punitive import tariffs on nearly every country in the world.
In response, the Trump administration immediately asked an appeals court to suspend the ruling and allow the tariff regime to remain in place. Trump has placed tariffs at the center of his efforts to extract concessions from U.S. trading partners, including traditional allies such as the European Union.
Finally, White House economic adviser Kevin Hassett expressed confidence in an interview with Fox Business on Thursday that the decision would be reversed. He also said the decision would not hinder the signing of new trade agreements.
“If there are little setbacks here and there because of decisions made by activist judges, that shouldn’t worry you, and it certainly won’t affect the negotiations,” Hassett said.
Trump aides defend continuation of tariffs
Additionally, White House trade adviser Peter Navarro is a staunch advocate of higher tariffs. In an interview with Bloomberg TV, he said the Trump administration could rely on other laws to implement import taxes. That would be the case if the court ruling were to remain in effect.
To justify this stance, Trump invoked the International Emergency Economic Powers Act. This legislation is used to deal with threats during national emergencies. Under it, the president imposed tariffs on nearly all of the U.S.’s trading partners, which ultimately raised fears of a global recession. As a result, after markets plunged, the president temporarily suspended many of the tariffs until early July.
However, the court found that the law did not grant Trump the unilateral power to impose such sweeping tariffs. On the other hand, Trump imposed some sector-specific tariffs, such as those on steel, aluminum and automobiles, under separate authorities and on national security grounds, so the ruling did not affect them.
In response to the ruling, Canadian Prime Minister Mark Carney welcomed the court's decision, saying it was "consistent with Canada's long-standing position" that Trump's tariffs were unlawful.
Meanwhile, other US trading partners reacted cautiously. The British government said the decision was an internal matter for the US administration and noted that it was “just the first phase of a judicial process”.
Ultimately, both Germany and the European Commission said they could not comment on the decision.
Modest market gains
Several analysts said it was too early to conclude that the decision completely closes the door on Trump's sweeping tariffs, as legal avenues other than the economic powers bill are likely available to the United States.
“We suspect the administration will resort to other legal authorities to maintain tariff levels around current levels,” Bernard Yaros, chief U.S. economist at Oxford Economics, wrote in a note to clients on Thursday.
After triggering an initial rally in stocks in Asia, the decision prompted more restrained reactions in Europe, where indexes remained largely flat, and in the US, where gains were modest.
The dollar's initial recovery fizzled, and the greenback firmed lower against a basket of major trading partners. Bond yields also eased.
Source: Summer Zhen, Samuel Indyk, Sarah Marsh, Doina Chiacu, David Ljunggren, Joseph Ax and Barbara Lewis | Notícias Agrícolas
