Gina Smialek
speaker
33 appearances
1 recordings
1 series
first heard May 2025
last heard May 2025
Gina Smialek’s voice in public audio — every appearance, attributed to the second.
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Yes, hello?
Right. So this case was fundamentally about whether President Trump has the authority to enact across-the-board tariffs on U.S. trading partners without approval from Congress.
And so it was about this 10% tariff that has been applied to a range of trading partners, including the European Union, which is what I cover, and which have obviously made it a lot more expensive to import products from overseas into the United States.
And so we saw the wine company you talked to, a women's cycling apparel company, an online fishing tackle company, band together and take this to a court and say that this was an over-interpretation of a pretty obscure law that had allowed these to go into effect in the first place and that it should be overturned. And remind us, Gina, what is that law called? Yeah.
So it is this 1977 law called the International Emergency Economic Powers Act, which is what we in trade circles all call AIPA. And it is basically the cudgel that President Trump has been using to wage his trade war on global trading partners. It's not the only thing he uses, but this is the law that he uses to apply tariffs of varying sizes across
across the board on products from a range of trading partners. And so it's been really important to his strategy of kind of surprising people with big, varying, kind of shocking tariff packages. This law is a sort of unusual tool to use for something like this because it primarily concerns trade embargoes and economic sanctions.
It was originally conceptualized to be in reaction to national emergencies, and the administration has basically been arguing that the trade situation is a national emergency. So this is this really unusual interpretation of this 50-year-old piece of legislation, and this wine importer and these other companies basically take it before the court and say, this is too broad.
Can you just walk me through their decision? So the decision essentially said two things. It first said that a set of tariffs that the Trump administration has put on Mexico, Canada, and China in response to the fentanyl trade is not a good use of this law. And it also, importantly, said that across-the-board tariffs, these tariffs that apply to everyone at 10% currently—
is too broad of a use of the law and that the law was not meant to give the president unbound authority to just put tariffs on whoever he wants at whatever rate he wants. And as a result, they are basically blocking these tariffs. You know, this latest news
Right. It is a law to keep track of. I think it's important to emphasize what's not affected, and that is sector-specific tariffs. So you may remember that there are 25% tariffs on steel and aluminum and on cars. Those tariffs are under a different law entirely and are not subject to this ruling.
The tariffs that are subject to this ruling are across-the-board tariffs that have applied to a bunch of American trading partners and which were announced early in April on what President Trump called Liberation Day. Those are currently at 10%, but they were set to bounce back to higher rates that were specific by country after a 90-day pause, so in mid-July.
And they've really been sort of the center of negotiations. This is the thing that Trump is negotiating with countries across the world about.
Well, this really damages President Trump's ability to do the kind of negotiating that he tends to prefer to do and which he has very much been doing throughout this trade war. So what we've seen him do repeatedly is kind of art of the deal, unpredictable style of negotiation, where he announces really big tariffs on trading partners and then rapidly takes them off and then threatens them again.
And so it's been this sort of, you know, you get a tariff, you get a tariff. approach of trying to keep everybody on their back foot. And he's been doing that unilaterally, sort of King Trump style, not passing it through Congress, not taking the time to do some big investigation. And he's been able to do it very quickly and very nimbly because of this creative use of this law.
And now suddenly it seems like that might be off the table. Although I think it would be premature to say that this is the end of the trade war. I've been talking to a lot of people today who are very nervous about what happens next. I think the word of the day is probably chaos.
And, you know, I think there are a lot of questions about whether there's actually potentially a risk that this actually provokes the Trump administration to do something even more drastic.
So the most obvious option that they have is try to get the ruling overturned. And we've already seen some action there. They've applied for and then been granted a stay pretty quickly after the ruling. So legally, we're now in this sort of wait-and-see moment where it's clear that the tariff block is not going to take effect at least immediately.
And it's very clear that the Trump administration is... going to really try and get this overturned in court, and it could even end up being escalated to the Supreme Court potentially. So clearly there are some legal options here. And then I think the second bucket of options is what they can do on the trade front.
And one option there is that they could use another provision in trade law to apply some tariffs up to 15% on trading partners for 150 days. And after that, they'd have to take it to Congress. But there is a period here where the Trump administration could do that without congressional approval.
I think people think it's possible that he'll do the 150-day version of this. I think people think it's a little less likely that he's going to try to get something through Congress because while that would put this on very solid legal footing, it also means you have to get it through Congress.
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