Trump is locked in a legal battle over the legitimacy of the “reciprocal tariffs” and his power to impose them.
President Donald Trump has walked the talk on “Liberation Day” tariffs, with the president confirming that new levies will take effect, as per the schedule communicated via an executive order dated July 31.
“IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” said Trump in a post on Truth Social late Wednesday just ahead of the stroke of midnight.
“Reciprocal tariffs take effect at midnight tonight! Billions of dollars, largely from countries that have taken advantage of the United States for many years, laughing all the way, will start flowing into the USA,” he posted. “The only thing that can stop America’s greatness would be a radical left court that wants to see our country fail!”
Trump is locked in a legal battle over the legitimacy of the “reciprocal tariffs” and his power to impose them. Washington, D.C.-based U.S. Court of Appeals for the Federal Circuit is set to rule on the lawsuit pending before it in this regard. The Federal Circuit had previously set aside a lower court’s ruling, declaring Trump tariffs illegal.
The lawsuit, brought by 12 Democratic-led states and five small businesses, has challenged the International Emergency Economic Powers Act (IEEPA), which Trump has invoked, reasoning that it doesn’t address tariffs, and only Congress, not the president, has authority over tariffs and taxes.
The president’s lawyers have argued that the 1977 law, which has historically been used to sanction enemies or freeze their assets, bestows on him the right to impose tariffs.
The development assumes importance as the U.S. market pushes toward reclaiming its previous all-time highs amid bouts of modest sell-offs.
The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) tracking the broader S&P 500, has gained 8.6% this year, and the Invesco QQQ Trust (QQQ) ETF is up a steeper 11.3%.
The SPY and QQQ ETFs were among the top 10 most active tickers on Stocktwits early Thursday. Retail sentiment toward the former has turned ‘bearish’ by late Wednesday, while the latter has seen ‘neutral’ sentiment.
Of the U.S.’s major trading partners, including the European Union and the U.K. Japan and South Korea have now reached deals with Washington after negotiating stepped-down rates. China has until Aug. 12 to negotiate a framework agreement, while Mexico was granted a 90-day extension, and Canada has been slapped with a 35% levy, beginning last Friday.
Trump’s July 31 executive order listed 69 countries that had agreed to, or were on the verge of concluding a deal, and tariffs in the range of 10% to 41% were slapped on these nations. The other countries not included in the list would be subject to an additional ad valorem duty of 10%, the White House said last week.
In the meantime, trade talks with India have stalled, with the Asian nation’s excessive reliance on Russia for its oil imports emerging as a significant area of contention. Trump signed an executive order on Wednesday, imposing an additional 25% rate on imports from India, taking the total rate to 50%. The new rate would take effect on Aug. 27. Later, while speaking to reporters at the White House, the president clarified that more secondary sanctions would be announced soon.
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