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The courts weigh in on IEEPA tariffs
Published 03 June 2025
The US Court of International Trade ruled that Trump’s IEEPA tariffs are illegal and ordered their removal, though the order is now stayed pending appeal. Nippon Steel may proceed with its US Steel investment, under 50% steel import tariff protection. As key US partners like the EU consolidate their positions, companies face profit losses. Meanwhile, a fragile US-China truce appears to be falling apart, with Washington criticizing Beijing’s slow rollback of export restraints and imposing new curbs on Chinese tech firms.
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The court rules on IEEPA | 50% tariffs on steel and a deal with Nippon Steel? | The impact of Trump’s tariffs | More strain for US-China talks | Bad Apple?
The court rules on IEEPA
The Council on Foreign Relations considers the various implications of the CIT’s landmark ruling and a similar opinion from a US District Court. Politico notes that the court rulings will jolt Trump trade talks. Bloomberg sees slower and more complex options for Trump if his court fight fails. The Hinrich Foundation's Deborah Elms explains the wide menu of legal options open to the executive branch.
Mentioned publications
- All Rise for Trade Court – Council on Foreign Relations, May 30, 2025
The Court of International Trade’s ruling on Donald Trump’s tariffs is the most significant setback for Trump’s trade agenda to date. While his team has already filed an appeal and secured a temporary stay, allowing the IEEPA tariffs to remain in place through at least June 9, uncertainty looms. Most of the administration’s ongoing trade negotiations are likely to enter a holding pattern as the US trading partners wait for the courts to weigh in. - Court rulings jolt Trump trade talks – Politico, May 29, 2025
The US court rulings striking down Trump’s tariffs have strengthened the position of trade partners like the EU. The ruling has also reduced pressure on other countries to cave in to US demands during trade negotiations. Despite legal setbacks, most countries plan to keep negotiating, hoping to secure favorable deals. - Trump’s Tariff Options Slower, More Complex If Court Fight Fails – Josh Wingrove, Bloomberg, May 30, 2025
Even though the federal courts ruled that Trump overstepped his authority by using IEEPA to impose sweeping tariffs, the White House insists that the tariffs will continue "one way or another." The possible alternatives include Section 232, 301, and 122 powers. Trump could also seek congressional approval, though this option is laborious and time consuming. - Courting Chaos: Trump’s wide menu of legal options in the tariff war – Deborah Elms, Hinrich Foundation, June 3, 2025
Now that courts have ruled against the Trump administration on IEEPA, its use of Section 232 is even more likely. If IEEPA is not to be used for tariffs against trade partners, the White House will resort to alternative methods. The courts and Congress tend to be highly deferential to executive claims of national security.
50% tariffs on steel and a deal with Nippon Steel?
Bloomberg reports on Trump’s doubling of steel tariffs, while Nikkei Asia provides the 5 things to know about the US Steel – Nippon Steel deal.
Mentioned publications
- Trump to Double Steel Tariffs to 50% to Aid Nippon-US Steel – Josh Wingrove and Joe Deaux, Bloomberg, May 31, 2025
President Trump, during his visit to a US Steel Corp. Plant, said he would be increasing tariffs on steel and aluminum to 50% from 25%. He championed an expected deal between US Steel and Japan’s Nippon Steel Corp. as one that would ensure American firm remains US-owned and operated. The steel tariffs would benefit the joint venture’s American operations and help protect American workers. - US Steel deal approved after 17-month saga: 5 things to know – Shotaro Tani, Nikkei Asia, May 24, 2025
The US President has approved a "partnership" of US Steel with Nippon Steel. Trump announced the deal between the two companies will create at least 70,000 jobs and add US$14 billion to the US economy. The deal was initially blocked by the then President Biden citing national security risks.
The impact of Trump’s tariffs
After threatening the EU with higher tariffs and then relenting pending negotiations, the EU prepares its negotiating leverage for future talks, per Reuters. New data analyzed by Reuters shows the tariffs’ costs to corporations at $34 billion and counting, while Politico finds that imports to the US plunged by 20% in April.
Mentioned publications
- Brussels seeks companies' US spending plans as Trump hails move toward talks – Reuters, May 28, 2025
The EU prepares to advance trade talks with the US after Trump backtracked on threatened steep tariffs on imports from the bloc. Officials have asked leading EU companies and CEOs for details of their US investment plans. Trump said EU’s move to set up talks was positive and that he hoped Europe would ‘open up’ to trade with the US. - Trump's tariff tally: $34 billion and counting, global companies say – Reuters, May 30, 2025
President Trump's trade war has cost companies more than US$34 billion in lost sales and higher costs. This is a sum of estimates from 32 companies in the S&P 500, three companies from Europe's STOXX 600, and 21 companies in Japan's Nikkei 225 indices. The estimate is expected to rise as ongoing uncertainty over tariffs continues to paralyze decision making at some of the world's largest companies. - Imports plunge in early sign of Trump tariff impact – Victoria Guida, Politico, May 30, 2025
Imports plummeted in April as businesses adjusted to President Trump’s new tariff regime. The monthly goods trade deficit in April was nearly half its size in March, driven by a nearly 20% drop in imports. The numbers are a sign that Trump’s policies may be starting to chip away at the global trade deficit, which he views as a key problem for the US economy.
More strain for US-China talks
The FT writes that Trump accuses China of violating their trade truce. The US appears to be putting more pressure on China with new tech restrictions, including curbs on design software, chemicals, and jet engines, reports Reuters, while the US prepares to expand tech sanctions to company subsidiaries, reports Bloomberg. Can US plans to "aggressively" target Chinese student visas be seen as a separate attempt to build leverage in trade talks?
Mentioned publications
- HF sponsored accessDonald Trump accuses China of violating US tariff truce – Joe Leahy, Financial Times, May 30, 2025
President Trump has accused China of violating its two-week-old tariff truce with the US, threatening to reignite the trade war between the two economies. While the President did not specify the details of the violation, the US trade representative Jamieson Greer said China had been slow to remove the non-tariff trade "countermeasures" it imposed in response to Trump’s duties. - US curbs chip design software, chemicals, other shipments to China – Karen Freifeld, Reuters, May 28, 2025
The US has ordered a swathe of companies to stop shipping goods to China without a license and revoked licenses already granted to certain suppliers. The new restrictions appear to be aimed at choke points to prevent China from getting products necessary for key sectors. Products affected include design software and chemicals for semiconductors, butane and ethane, machine tools, and aviation equipment. - US Plans Wider China Tech Sanctions with Subsidiary Crackdown – Mackenzie Hawkins and Jenny Leonard, Bloomberg, May 31, 2025
The Trump administration plans to broaden restrictions on China’s tech sector with new regulations to capture subsidiaries of companies under US curbs. The new rule would impose US government licensing requirements on transactions with companies that are majority-owned by already-sanctioned firms. This subsidiary rule could be unveiled as soon as June. - US to Revoke Chinese Student Visas in Escalating Crackdown – Bloomberg News, May 29, 2025
The Trump administration plans to "aggressively" revoke visas for Chinese students including those with connections to the Chinese Communist Party or studying in critical fields. It will also enhance scrutiny of all future visa applications from China and Hong Kong. China has accused the US of taking this decision "under the pretext of ideology and national security" and warns that it will harm people-to-people relations.
Bad Apple?
Patrick McGee’s new book, excerpted in the Wire China, explains that though Apple profited from Chinese manufacturing and supply chains, China, and Apple’s competitors there, may have gained far more from the bargain. Trump threatens 25% tariffs on Apple products if manufacturing doesn’t return to the US, per the FT. Michael Enright, for the Hinrich Foundation, explores what happens when China decides it no longer needs Apple as much as Apple needs it.
Mentioned publications
- Tim Cook’s Biggest Gamble – Patrick McGee, The Wire China, May 18, 2025
Apple’s deep integration with China helped it scale but also enabled rivals like Huawei, which eventually overtook iPhone sales. US sanctions on Huawei briefly revived Apple’s fortunes, but Huawei’s resurgence and ongoing tariff tensions have reignited pressure. Now, Apple faces a geopolitical bind between Washington and Beijing, threatening its core strategy and future in China. - HF sponsored accessDonald Trump threatens Apple and Samsung with 25% tariff on devices – Tim Bradshaw and John Reed, Financial Times, May 24, 2025
President Trump has threatened Apple and Samsung with 25% tariffs on their devices unless the companies shift production to the US. Apple’s Tim cook had earlier said that Indian factories would supply a majority of the iPhones sold in the US to avoid the tariffs on Chinese-made goods. Trump said the new levy could start by the end of June. - Apple and China: Untying the knot? – Michael Enright, Hinrich Foundation, February 25, 2025
For years, Apple brought indispensable FDI to China, millions of jobs, tech know-how, and the ultimate symbol of Beijing’s mastery over globalization. Now Apple’s sales are shrinking, it’s losing turf to Chinese rivals, made concession after concession to Beijing, and is squarely in the US-China crossfire. What if China decides it does not need Apple as much as Apple needs it?
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