Former Biden Official Says CAFC Likely to Soon Pare Back Trump Tariff Authority
The U.S. Court of Appeals for the Federal Circuit will likely rule against the Trump administration in the lead case on the legality of tariffs imposed under the International Emergency Economic Powers Act, though it's unclear under what exact rationale the court will do so, said Peter Harrell, a former National Security Council official during the Biden administration.
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In a LinkedIn post, Harrell, a co-author of an amicus brief contesting the tariffs, said he expects a ruling by the end of September, "and possibly earlier," highlighting that the Federal Circuit may want to "get ahead of" a hearing in another IEEPA tariff case before the U.S. Court of Appeals for the 9th Circuit set for Sept. 16. Harrell noted that during the Federal Circuit's July 31 hearing (see 2507310058), the judges expressed "diverse views" on whether IEEPA authorizes tariffs at all or "whether IEEPA might authorize some tariffs -- subject to sharp constraints -- but not the tariffs Trump has in fact imposed."
Harrell noted that the Trump administration seems to be "gearing up for a loss" in light of its recent letter to the court in which it claimed an adverse ruling could cause a "1929-style" depression (see 2508110029). Should the Federal Circuit strike down the IEEPA tariffs, Harrell speculated, "Trump will not give up." Traders should expect a combination of Section 122 balance-of-payments tariffs, Section 301 actions, potential Section 338 tariffs and "maybe even the President asking for authority from Congress."
In light of an adverse ruling, Harrell expects trade deal partners to "generally honor their commitments under the deals even if courts strike down IEEPA tariffs," since they know Trump can recreate some of the tariffs under existing laws and many want relief from the Section 232 tariffs, which aren't at issue in the IEEPA case.