President Donald Trump has argued that he has almost unlimited power to bypass Congress and impose sweeping taxes on foreign products. Now, a US federal Court of Appeal has put an obstacle on his way, judging that he had been declared an emergency to justify the imposition of sweeping duties on imports in almost all countries of the world.

The ruling largely ratified the ruling made by a specialized federal court in New York last May. At the same time, however, the decision of the Court of Appeal with 7-4 votes rejected some of it giving the Trump government time to appeal to the US Supreme Court.

However, the decision of the Court of Appeal was a big setting for Trump, whose unstable commercial policies have shocked financial markets, paralyzed businesses due to uncertainty and have raised fears for higher prices and slowing economic growth.

Which duties does the court refer to?

The court’s ruling is focused on duties imposed by Trump last April In almost all US trade partners and the duties it imposed before, in China, Mexico and Canada.

It is recalled that Trump on April 2 – on the “Day of Liberation”, as he called it – imposed the so -called mutual duties of up to 50% on countries with which the United States has a commercial deficit and 10% basic duties on almost everyone else. He later suspended mutual duties for 90 days to give countries time to negotiate trade agreements with the United States – and to reduce obstacles to US exports. Some of them did so – including the United Kingdom, Japan and the European Union – and agreed to unilateral agreements with Trump to avoid even greater duties.

Those who did not retrieve – or did not otherwise cause Trump’s rage – were hit more earlier this month. For example, Laos was hit by 40% duties and Algeria with a 30% duty. Trump also maintained the basic duties.

Citing the power it has to act without Congress’s approval, Trump justified taxes under the 1977 International Emergency Emergency Law by declaring the long -term commercial deficits of the United States.

In February, he had cited the law on duties on Canada, Mexico and China, saying that the illegal flow of immigrants and drugs beyond the US border was equivalent to national emergency and that the three countries had to do more to stop it.

The US Constitution gives Congress the power to determine taxes, including duties. However, legislators have gradually allowed presidents to take more power over the duties – and Trump has made the most of it.

The court, however, does not cover any other Trump duties such as foreign steel, aluminum and cars imposed by the president after a Ministry of Commerce investigations that concluded that these imports were threats to US national security. Nor does it include the duties imposed by Trump on China during his first term – which Joe Biden maintained – after a government investigation concluded that the Chinese used unfair practices to give their own technological companies an advantage over their opponents.

Why did the court rule against the president?

The government had argued that the courts had approved the urgent use of duties by then President Richard Nixon, who followed his decision to end a policy associated with the US dollar to the price of gold. The Nixon government successfully invoked its power under the trade law with the enemy of 1917.

In May, the US International Trade Court in New York rejected the argument, judging that Trump’s duties on the day of liberation “go beyond any power granted to the president” under the emergency law. In his ruling, the Commercial Court combined two appeals – one of five companies and one of 12 US states – in a single case.

On Friday, the Federal Court of Appeal decided by votes 7-4 that “it seems unlikely that Congress would intend to … grant the President unlimited power to impose duties”.

Where does this lead Trump’s commercial agenda?

The government has argued that if Trump’s duties are abolished, it may have to return part of the import taxes it has received, causing a financial blow to the US Treasury. Trust revenue amounted to $ 159 billion Until July, more than twice as much as it was at the same time last year. Indeed, the Ministry of Justice warned in a legal statement this month that the recall of duties could mean a “financial disaster” for the United States.

He could also put Trump on unstable ground in his attempt to impose duties in the future.

“While existing trade agreements may not collapse automatically, the government could lose a pillar of its negotiating strategy, which may encourage foreign governments to resist future demands, delay the implementation Holland & Knight and former lawyer of the Ministry of Justice.

The president vowed to refer the case to the Supreme Court. “If this decision remains, it will literally destroy the United States of America,” Trump wrote in his social networking platform.

Trump has actually alternative laws to enforce import taxes, But they would limit the speed and seriousness with which it could act. For example, in its ruling in May, the Commercial Court noted that Trump has more limited to impose duties to tackle commercial deficits under another law, the 1974 trade law. But this law restricts duties to 15% and only 150 days for the United States.

The government could also invoke duties using different legal power as it did with foreign steel, aluminum and cars. But this requires research by the Ministry of Commerce and cannot be imposed only at the president’s discretion.