{"text":[[{"start":7.68,"text":"The writer is president of Queens’ College, Cambridge, and an adviser to Allianz and Gramercy"}],[{"start":15.46,"text":"In a decision late last week, a US appeals court affirmed a lower court’s ruling that restricts President Donald Trump’s authority to impose tariffs. Some see this as a significant setback to the US president’s use of his preferred tool to pursue not only economic goals but also geopolitical and national security aims."}],[{"start":39.54,"text":"I suspect the impact will be less on trade policy but could turn out to be more important in the power struggle between the executive and some parts of the judicial system."}],[{"start":50.54,"text":"In reaching its decision, the court ruled that using the 1977 International Emergency Economic Powers Act to justify broad tariffs exceeded the president’s powers, adding that it could “discern no clear congressional authorisation” for putting the levies on imports from countries including Canada and China via a series of executive orders."}],[{"start":75.07,"text":"Historically, the IEEPA has been used for targeted actions rather than broad tariffs. But in delivering a blow to one of the legal arguments for the current trade policy, it allowed the tariffs to stay in place until mid-October. The president has stated that the administration will appeal to the Supreme Court during that time."}],[{"start":99.6,"text":"The ruling applies only to tariffs imposed under the IEEPA and not those based on other legal authorities. Some of them have already been superseded by new trade agreements that codify higher rates compared with pre-Trump levels."}],[{"start":118.25,"text":"I suspect that, ultimately, this ruling will not fundamentally alter the administration’s propensity to use tariffs to pursue multiple objectives. The approach is integral to the efforts to rewire the international trading system and also the domestic economy."}],[{"start":137.53,"text":"Already, tariffs are raising budgetary revenues, enticing some manufacturers to consider returning to the US, and pressuring those countries and companies that refuse to agree to “deals”. As far as the administration is concerned, the approach is working and warrants a multi-faceted defence that not only challenges directly the appeals court’s decision but also seeks workarounds. And there are several that can be pursued ranging from other legal authorities to narrowly targeted levies and non-tariff measures to force trade deals."}],[{"start":176.43,"text":"This is not to say that tariffs will have no detrimental effects on the American economy. Over time, they will distort the efficient allocation of resources and undermine the efficient operation of parts of the US economy. Their price effects, while contained thus far, could increase sequentially and unevenly. Meanwhile, it is only a matter of time until shell-shocked trading partners find stronger defences against the US, a process that is picking up steam as illustrated by signals emerging from this weekend’s China-India meetings."}],[{"start":216.03,"text":"And while its impact on tariff policy is likely to be limited, the appeals court’s decision could well have broader significance. The key issue here isn’t about tariffs. It is whether the ruling, as well as what transpires this week on another case that resumes on Tuesday, opens the door to many more legal challenges on a much broader range of issues."}],[{"start":240.48,"text":"In the run-up to January’s inauguration, analysts had identified a series of potential checks and balances on some of the administration’s less conventional policy intentions from tariffs to eroding Federal Reserve independence. They included Congress, the cabinet, financial markets, and the legal system. As it turns out, both their individual and collective impact have been limited, raising questions in particular on whether markets have been too complacent."}],[{"start":274.02,"text":"The administration was repeatedly warned by many that any major attack on the independence of the central banks would destabilise both bond and stock markets. Yet last week’s attempt to remove Lisa Cook, one of the Federal Reserve board governors, hardly registered in the markets. Of all the explanations offered for this, very few are likely to reassure those who had trumpeted the markets’ disciplinary potential. It is in this context that Friday’s appeals court decision might encourage many more to challenge the administration in court, especially if Cook’s lawsuit evolves her way this week."}],[{"start":315.82,"text":"Rather than the tariff policy, the key question is how much the courts will serve as a lasting check on an administration committed to materially reshaping the domestic and international economic orders. This issue is likely to be tested many times in the coming months and years, with an answer that has significant consequences for many around the world and remains uncertain."}],[{"start":351.74,"text":""}]],"url":"https://audio.ftmailbox.cn/album/a_1756775255_7250.mp3"}