Former President Donald Trump’s tariffs cast a long shadow over America’s international trade relationships even with deals struck with some of the U.S.’s closest trading partners. Just ask our allies—the United Kingdom, Japan, Vietnam, Indonesia, and the European Union who all managed to negotiate favorable terms with the Trump administration. As economic harm continues to be done by steep remaining tariffs on specific countries, the economic impact of these tariffs imposes grave concerns.
Incredibly, the United States Court of Appeals for the Federal Circuit recently issued such a pivotal ruling. It ruled that Trump’s “Liberation Day” tariffs and fentanyl-related duties went beyond his authority under the International Economic Emergency Powers Act of 1977. The court held that the statute Trump invoked was not sufficiently broad or clear to justify the use of tariffs or similar actions. This decision casts doubt over the legal foundation of his overall trade agenda.
These are very broad powers that Trump used during his Administration to impose tariffs on any number of goods, using national security as a pretext. Despite the Administration’s justifications, critics are already calling out the lack of justification for these tariffs. For example, they cite U.S. government data that indicates little fentanyl was seized at the northern border.
In early August, Trump applied tariffs to Canada, increasing them to a record-high 35 percent. He claimed that this dramatic increase was a response to the spread of fentanyl and retaliatory killings. Canada wasn’t exempt—Prime Minister Mark Carney sounded skeptical about that being the case. He warned that the nation could not avoid their effects altogether. In other words, according to Trump, Canada has to pay about $61 billion to $71 billion. As part of the deal, referred to as the Indo-Pacific Economic Framework, Canada must make this contribution.
Worries about possible sectoral tariffs on lumber have been raised by Canadian officials. They are concerned that these tariffs would increase already heightened trade tensions and slow the pace of economic recovery.
Trump remains defiant in his stance regarding tariffs, stating, “If you took away tariffs, we could end up being a Third World country.” He’s looking for fast-track ruling on his tariffs by the Supreme Court. He makes an interesting normative case for these economic policies in his case. “So we’re asking for an expedited ruling,” he noted, reflecting his urgency in addressing the legal challenges to his tariff regime.
Even with these deals struck with some of our key trading partners, President Trump’s tariffs still lurk, clouding the international trade landscape with unpredictability. How the administration should use tariffs has led to strong disagreement and confusion. As we have heard from many of you, it has no effect on CUSMA-compliant goods. This creates a confusing patchwork for businesses trying to understand a business environment that increasingly often crosses international borders.
