A specialty trade court has struck down a second round of tariffs imposed by the Trump administration, handing importers a victory and the White House another judicial slap on the wrist.
In a ruling that feels like Groundhog Day for trade policy, the Court of International Trade invalidated the worldwide tariffs that President Trump ordered to replace import levies already outlawed by the U.S. Supreme Court. Because apparently, the first time wasn't enough of a hint.
The decision's scope is initially limited to a pair of importers who challenged the tariffs, plus the state of Washington - which means the celebration may be confined to a relatively small corner of the economy for now.
"That's a very good question and one we've sort of been wrestling with," said Jeffrey Schwab, the importers' attorney from the Liberty Justice Center, when asked about the ruling's broader impact. "It's not entirely clear and probably will depend on what happens now." So, clear as mud - but it's a start.
After the Supreme Court ruled in February that Trump had overstepped his authority with double-digit tariffs on virtually everything the U.S. imports, the administration tried to resurrect them using a different law. That law, however, only authorizes tariffs in response to large and persistent balance-of-payments deficits - a condition the trade court says currently doesn't exist. The administration itself had earlier acknowledged in court that a balance-of-payments deficit is distinct from a trade deficit, so they can't exactly claim ignorance.
The replacement tariffs were set to expire in July anyway, but the administration is reportedly exploring other legal avenues to keep the tariff party going. Meanwhile, the original emergency tariffs cost importers tens of billions of dollars - money the government now has to refund. The first of an estimated $166 billion in refunds is expected next week.
Jay Foreman, CEO of Basic Fun - which imports toys like Lincoln Logs and Tonka Trucks - stands to collect about $7 million in refunds for the earlier tariffs. His company was one of the two that successfully challenged the replacement levies.
"The administration can take its shot and do what they want, but we can also fight back," Foreman said. "We fought back today and we won and we're extremely excited."
Foreman noted that while strategic tariffs make sense, a blanket 10% levy on products from around the world is about as nuanced as a sledgehammer. "To approach this situation with a bazooka instead of a fine-tooth comb makes no sense," he said. Someone alert the administration: there are tools other than explosives.