MICHEL MARTIN, HOST:
A federal court has blocked the nearly worldwide tariffs that President Trump ordered last month. The U.S. Court of International Trade says Trump overstepped his authority when he ordered taxes on imports from nearly every other country. If the ruling stands, it would strike down all of the tariffs Trump imposed on April 2, along with separate levies on goods from Canada, Mexico and China, some of which have been temporarily suspended. NPR's Scott Horsley is with us now to tell us more about this. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Michel.
MARTIN: Scott, this sounds big. What's at stake in this case?
HORSLEY: The stakes here are enormous. The president has imposed the highest tariffs this country has seen since the Great Depression. And while he has backed off on some of those import taxes, the White House maintains he could reimpose them anytime with just a social media post. So a dozen states and five businesses challenged the president's authority to unilaterally levy those taxes. And last night, a specialized trade court handed those challengers a decisive victory. The unanimous three-judge panel ruled that under the Constitution, it's Congress that has exclusive power to regulate trade and impose tariffs. And the court said the 1977 emergency law that Trump has been relying on does not give the president unfettered power to impose taxes on imports from around the world. They rejected Trump's claims that fentanyl trafficking or persistent trade deficits justify taxing nearly everything the U.S. buys from other countries. And in fact, the judges skipped right over issuing a preliminary injunction and gave the plaintiffs a summary judgment.
MARTIN: How are financial markets reacting?
HORSLEY: Investors have never liked these tariffs. Every time the president raises import taxes, the stock market tumbles. Every time he backs down, the stock market soars. So global investors welcome the idea that maybe the courts are going to take away one of Trump's tariff clubs. Asian stocks rose sharply overnight. Here in the U.S., early reaction has been more muted, which may signal market uncertainty about how this court battle ultimately plays out. Keep in mind, it's mostly American businesses and consumers that bear the cost of these import taxes, and it's U.S. farmers and factories that risk losing markets overseas because of retaliation in the trade war. Oregon is one of the states that brought this case, and Oregon's attorney general, Dan Rayfield, says striking down these tariffs is a win for working families.
DAN RAYFIELD: We as consumers, we as families, people that are working day in day out to try and pay their bills, don't have the flexibility in their budget to afford it. And economists were showing this was going to be a $3,800 increase to average household budgets every year. That is a tax on all of us - right? - but it's hidden and disguised as a tariff.
HORSLEY: Rayfield also says this ruling shows that laws still matter and that trade decisions cannot be made on a president's whim.
MARTIN: How is the administration responding?
HORSLEY: Well, the administration wasted no time saying it would appeal this decision. That will go to the Court of Appeals for the federal circuit here in Washington. The White House also issued a statement saying, quote, "it's not for unelected judges to decide how to properly address a national emergency." I'll note the three judges who ruled against the president here were nominated to the court by Presidents Reagan, Obama and Trump himself.
MARTIN: OK. So does this ruling strike down all of Trump's tariffs?
HORSLEY: No. The industry-specific taxes on steel and aluminum and cars and car parts remain in place. Those were authorized under a different statute, and Trump has threatened to use that statute to add additional tariffs on imported computer chips and pharmaceuticals and copper. But as for the sweeping tariffs on nearly everything we import from coffee and bananas to French wine and Chinese toys, for the moment, at least, those taxes do not pass legal muster.
MARTIN: That is NPR's Scott Horsley. Scott, thank you.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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