Trump's customs disaster: Court stops billions in taxes!

Trump's customs disaster: Court stops billions in taxes!

A federal court in the US recently denied the Trump administration the authority to impose far-reaching tariffs under emergency law. This decision primarily affects most tariffs enacted or temporarily suspended during Donald Trump's administration, including punitive levies imposed on "Liberation Day" in April, such as the FAZ reported. In the past, the tariffs had been in response to the US trade deficit, but were temporarily suspended due to falling financial markets.

The decision is particularly explosive because it affects universal tariffs of 10 percent affecting goods from almost all over the world, as well as specific tariffs on products from Canada, Mexico and China. However, tariffs based on a different legal framework, such as Section 232 of the Trade Expansion Act of 1962, are not affected by this decision, including tariffs on steel, aluminum and automobiles, as well as threatened tariffs on pharmaceuticals and semiconductors.

Details of the decision

The court in New York ordered that the tariffs in question must be “repealed and their application permanently prohibited.” However, a deadline has been set by which the Trump administration must comply with this decision. However, an appeals court has temporarily lifted the block on the tariffs, potentially making the commercial court's deadline unnecessary. Trump himself could try to impose the tariffs under a different legal framework, which could lead to further lawsuits.

Reactions from those around Trump show noticeable dissatisfaction. His spokeswoman criticized the judges in New York and described the decision as an abuse of their power. The case could even reach the US Supreme Court, where Trump has a majority. This uncertainty is causing nervousness among trading partners, consumers and markets, which is reflected in the Dax, which hardly reacted to the verdict.

EU reacts to the tariffs

While the US is struggling with its tariff decisions, the EU is also planning to respond to the tariff situation. The EU Commission has announced the imposition of counter-tariffs and said it is “well prepared”. These tariffs mainly apply to steel and aluminum imports from the EU. Commission chief Ursula von der Leyen said that tariffs are detrimental to both the economy and consumers ZDF reported.

The EU plans to reinstate old measures from the first trade dispute that were previously paused. These measures affect US products such as bourbon and motorcycles in order to put political pressure on Republicans in certain states. The tariffs are expected to affect goods worth around 26 billion euros ($28 billion), with a focus on products with high iconic value.

EU officials emphasize that the counter-tariffs should be distributed evenly among member states to minimize the effect in Europe. The exact level of the tariff rate has not yet been determined, but a rate of 25 percent is being discussed as a possible figure. These tariff actions by the US government are not only putting a strain on the European economy, but also on trust in the US as a trading partner.