A US court has ruled that President Trump has no authority to impose blanket tariffs on other nations, and has issued an order blocking all across-the-board tariffs.
The court ruled that Congress has the exclusive authority to regulate trade, and that the President’s justification of safeguarding the economy was not a valid reason to bypass this.
This does not apply to the automotive tariffs, as these were enacted under a separate statute, similar to the specific tariffs on steel and aluminium.
The ruling covers a pair of cases, brought to the court by a series of US state governments, as well as the Liberty Justice Centre, which represented a series of small businesses impacted by tariffs.
Trump cited the 1977 International Emergency Economic Powers Act when imposing the tariffs, but the ruling stated that the act had ‘extensive procedural requirements including an investigation that culminates in an affirmative finding that another country imposed unfair trade barriers and a public notice and comment period’, which were not satisfied.
As automotive tariffs are not covered by the ruling, the UK’s previously negotiated 10% tariff still applies.
Philipp Sayler von Amende, chief commercial officer at Carwow, said: “There is now yet more uncertainty for global manufacturers, which could further impact automotive supply chains and the financial commitments made by carmakers in their key markets.
“The ripple effects could be felt across the UK motor retail sector; the question now is when and to what degree.”
Section 232 of the Trade Expansion Act allows the President to impose tariffs on specific goods — such as cars — when there is deemed to be a national security risk.
The White House is appealing the case, and the court has temporarily allowed the tariffs to continue while this takes place.
China was worst hit, with 145% tariffs originally planned for the nation, before the President announced that he’d be reducing all tariffs to 10% for 90 days.
Vehicle exports to the US have suffered due to the uncertainty surrounding tariffs, with the Society of Motor Manufacturers and Traders reporting that the UK exported 2.7% less vehicles to the US in April.
Some international manufacturers, such as Audi, suspended exports to the US completely following the introduction of tariffs.