UPDATE: U.S. President Trump says he is “deeply disapointed” and by the U.S. Supreme Court striking down his targeted tariffs, and promised to instead enact a global 10 per cent levy.
He told reporters at a briefing in Washington D.C. that he is “ashamed” of certain members of the court. He went on to lambaste foreign governments.
“Foreign countries that have been ripping us off for years are ecstatic,” Trump said. “They’re so happy. And they’re dancing in the streets, but they won’t be dancing for long, that I can assure you.”
Trump said he would sign an executive order to use Section 122 of the 1974 Trade Act to implement the tariffs. This order would be good for 150 days, but would then require congressional approval.
Original story:
The U.S Supreme Court has struck down President Donald Trump’s sweeping import tariffs in a 6-3 decision released on Friday, Feb. 20.
B.C. Premier David Eby was cautiously optimistic at an appearance before the Greater Vancouver Board of Trade shortly after the news broke.
“Good morning, everybody, and happy Liberation Day,” he said. “We’ll see, right?”
The implications of the decision are not yet known, but the 170-page opinion is clear that Trump cannot rely on the International Emergency Economic Powers Act to impose tariffs. Trump had used that law, passed by Congress in 1977, to circumvent the legislature’s designated role in imposing tariffs.
While tariffs were eventually imposed on many countries, the decision mentions Canada almost immediately, as Trump’s initial tariff threat early last year was for 25 per cent levies on Canadian imports and 10 per cent on Mexican imports. He justified them by declaring an emergency to stem the flow of illegal drugs into the U.S.
When Trump introduced the full slate of worldwide tariffs on April 2, he referred to it as “Liberation Day.”
Since then, the tariff threats have continued to evolve.
With the Canada-U.S.-Mexico Trade Agreement (CUSMA) in place, the overall rate of tariffs on Canadian goods entering the U.S. is lower because some goods are exempt. According to the most recent analysis by the Royal Bank of Canada, the overall effective rate of tariffs on Canadian goods had decreased to 3.1 per cent by November.
The economic impact on Canada is unclear at this stage. Eby quickly pointed out that this will not provide full relief for the softwood lumber sector, which is subject to separate duties.
“I was certainly relieved to see that Supreme Court decision around tariffs, and while it doesn’t address the challenges in our software sector, it certainly does potentially address some of the serious concerns we have about our relationship with the United States,” he said.