More than 20 states sue over new global tariffs Trump imposed after his stinging Supreme Court loss
Washington (AP): Some two dozen states challenged President Donald Trump's new global tariffs on Thursday, filing a lawsuit over import taxes he imposed after a stinging loss at the Supreme Court.
The Democratic attorneys general leading the suit argue that Trump is overstepping his power with planned 15% tariffs on much of the world.
Trump has said the tariffs are essential to reduce America's longstanding trade deficits. He imposed duties under Section 122 of the Trade Act of 1974 after the Supreme Court struck down tariffs he imposed last year under an emergency powers law.
Section 122, which has never been invoked, allows the president to impose tariffs of up to 15%, though they're limited to five months unless extended by Congress.
The lawsuit is led by attorneys general from Oregon, Arizona, California and New York.
The states argue that Section 122 was intended to be used only in specific, limited circumstances and does not give Trump authority to impose sweeping import taxes. It also contends the tariffs will drive up costs for states, businesses and consumers.
Many of those states also successfully sued over Trump's tariffs imposed under a different law: the International Emergency Economic Powers Act (IEEPA).
Four days after the Supreme Court struck down his sweeping IEEPA tariffs Feb. 20, Trump invoked Section 122 to slap 10% tariffs on foreign goods. Treasury Secretary Scott Bessant told CNBC on Wednesday that the administration would raise the levies to the 15% limit this week.
The Democratic states and other critics say the president can't use Section 122 as a replacement for the defunct tariffs to combat the trade deficit.
The Section 122 provision is aimed at what it calls “fundamental international payments problems".
At issue is whether that wording covers trade deficits, the gap between what the US sells other countries and what it buys from them.
Section 122 arose from the financial crises that emerged in the 1960s and 1970s when the US dollar was tied to gold. Other countries were dumping dollars in exchange for gold at a set rate, risking a collapse of the US currency and chaos in financial markets.
But the dollar is no longer linked to gold, so critics say Section 122 is obsolete.
Awkwardly for Trump, his own Justice Department argued in a court filing last year that the president needed to invoke the emergency powers act because Section 122 did “not have any obvious application" in fighting trade deficits, which it called “conceptually distinct" from balance-of-payment issues.
Still, some legal analysts say the Trump administration has a stronger case this time.
“The legal reality is that courts will likely provide President Trump substantially more deference regarding Section 122 than they did to his previous tariffs under IEEPA," Peter Harrell, visiting scholar at Georgetown University's Institute of International Economic Law, wrote in a commentary Wednesday.
The specialised Court of International Trade in New York, which will hear the states' lawsuit, wrote last year in its own decision striking down the emergency-powers tariffs that Trump didn't need them because Section 122 was available to combat trade deficits.
Companies that paid tariffs under that act scored a court victory Wednesday when a judge ruled that refunds are due.
Trump does have other legal authorities he can use to impose tariffs, and some have already survived court tests. Duties that Trump imposed on Chinese imports during his first term under Section 301 of the same 1974 trade act are still in place.
Also joining the lawsuit are the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, Vermont, Virginia, Washington, Wisconsin, and the governors of Kentucky and Pennsylvania.
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Iran offers to reopen Strait of Hormuz if US lifts its blockade and the war ends: officials
Cairo (AP): Iran has offered to end its chokehold on the Strait of Hormuz in exchange for the US lifting its blockade on the country and an end to the war, while proposing that discussions on the larger question of its nuclear programme would come in a later phase, two regional officials said Monday.
US President Donald Trump seems unlikely to accept the offer, which was passed to the Americans by Pakistan and would leave unresolved the disagreements that led the US and Israel to go to war on February 28.
With a fragile ceasefire in place, the US and Iran are locked in a standoff over the strait, through which a fifth of the world's traded oil and gas passes in peacetime. The US blockade is designed to prevent Iran from selling its oil, depriving it of crucial revenue while also potentially creating a situation where Tehran has to shut off production because it has nowhere to store the oil.
The strait's closure, meanwhile, has put pressure on Trump, as oil and gasoline prices have skyrocketed ahead of crucial midterm elections, and it has pressured his Gulf allies, which use the waterway to export their oil and gas.
The closure has also had far-reaching effects throughout the world economy, raising the price of fertilizer, food and other basic goods.
The proposal would push off negotiations on Iran's nuclear programme to a later date. Trump said one of the major reasons he went to war was to deny Iran the ability to develop nuclear weapons.
The two officials, who had knowledge of the proposal, spoke on condition of anonymity to discuss the closed-door negotiations between Iranian and Pakistani officials this weekend. The Axios news outlet first reported Iran's proposal.
It came as Iran's foreign minister visited Russia, which has long been a key backer of Tehran. It's unclear what, if any, assistance Moscow might offer now.
Strait of Hormuz remains blocked
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Iran's ability to choke off traffic in the Strait of Hormuz, the narrow mouth of the Persian Gulf, has proved one of its biggest strategic advantages in a war that has often boiled down to which side can take more pain.
Oil prices have risen steadily since the war began and tankers full of crude became stranded in the Persian Gulf, unable to safely transit through the strait and reach global distribution points.
On Monday, the spot price of Brent crude, the international standard, was trading at around $108 per barrel, nearly 50 per cent higher than when the war began.
Iranian foreign minister holds talks as negotiations with US stall
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Trump last week indefinitely extended the ceasefire the US and Iran agreed to on April 7 that has largely halted fighting. But a permanent settlement remains elusive in the war that has killed thousands of people.
Iran's state-run IRNA news agency said Foreign Minister Abbas Araghchi landed in St. Petersburg on Monday morning ahead of a meeting with Russian President Vladimir Putin.
“It is a good opportunity for us to consult with our Russian friends about the developments that have occurred in relation to the war during this period and what is happening now,” Araghchi said in a video interview posted by IRNA.
It comes as Pakistan has been seeking to revive stalled talks between Iran and the US, and negotiations had been expected in Islamabad over the weekend. Instead, Trump called off a trip by his envoys and suggested the talks could take place by phone instead.
Over the weekend, Araghchi made two stops in Pakistan and a visit to Oman, which shares the strait with Iran. He also spoke by phone with counterparts in Qatar and Saudi Arabia on Sunday.
Iran wants to persuade Oman to support a mechanism to collect tolls from vessels passing through the strait, according to a regional official who spoke on condition of anonymity because he was not authorised to discuss the matter.
Oman's response wasn't immediately clear.
The official, who is involved in mediation efforts, also said Iran insisted on ending the US blockade before new talks and that Pakistan-led mediators are trying to bridge significant gaps between the countries.
Trump says Iran has offered a much better proposal
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Trump told journalists Saturday that after he called off a trip by his envoys to Pakistan, Iran sent a “much better” proposal.
He did not elaborate but stressed that one of his conditions is that Iran “will not have a nuclear weapon”.
Iran insists its programme is peaceful, but the US wants to remove Tehran's stockpile of highly enriched uranium, which could be used to build a bomb, should Tehran choose to pursue one.
Since the war began, at least 3,375 people have been killed in Iran and at least 2,509 people in Lebanon, where fighting between Israel and the Iran-backed Hezbollah militant group resumed two days after the Iran war started. Another 23 people have been killed in Israel and more than a dozen in Gulf Arab states. Fifteen Israeli soldiers in Lebanon, 13 US service members in the region and six UN peacekeepers in southern Lebanon have been killed.
The ceasefire between Israel and Hezbollah has been extended by three weeks. Hezbollah has not participated in the Washington-brokered diplomacy.
