Experts divided over US court’s ruling against Trump tariffs

U.S. President Donald Trump delivers remarks on tariffs in the Rose Garden at the White House in Washington, D.C., April 2. Reuters-Yonhap

As a U.S. trade court has blocked U.S. President Donald Trump's sweeping tariffs, experts are divided on whether the decision will influence ongoing trade negotiations between Korea and the United States.

Korea’s trade ministry remains cautious, currently reviewing possible scenarios.

The Court of International Trade ruled Wednesday (local time) that Trump does not hold rights to issue "across-the-board worldwide tariffs” and invalidated all of his tariff orders since January, effective immediately, noting only Congress has exclusive authority to regulate commerce with other countries under the U.S. Constitution.

The judges ordered the Trump administration to issue new orders within 10 working days to reflect the injunction. The administration filed a notice of appeal soon after the ruling.

The ruling came amid a series of lawsuits the Trump administration faced after he announced the imposition of tariffs on over 50 countries in April without the approval of Congress.

Despite the ruling, some experts remain skeptical that it will have any significant impact on the Trump administration’s efforts to maintain leverage in trade negotiations with other countries.

Lee Tae-kyu, a senior research fellow at the Korea Economic Research Institute, said Trump would seek to implement legislation to work in his favor, which will render the court rulings ineffective.

“Even if the court invalidates the tariffs, the Trump administration is highly unlikely to roll back its trade policies entirely. Instead, it will probably continue as it has been and seek to handle any legal shortcomings through legislation,” he said, noting that the U.S. has already sealed a deal with Britain.

“It’s unrealistic to expect those deals to be undone. And many countries have already approached the U.S. with all sorts of offers to secure better terms. So, even if the court rules against the tariffs, the administration might simply ignore it and focus on negotiating individual trade deals.”

The researcher added the administration will continue focusing on closing negotiations on a speedy timeline with other countries as well.

“The Trump administration’s goal now is to speed up negotiations and finish by July because they need to move on to other government agenda swiftly; they need to complete this before next year’s midterm elections,” he said, emphasizing that Korea’s best move is to continue negotiations as it has.

“Pointing out that these measures are illegal won't help anyone … In the long run, getting quick results through negotiations is better for Korea-U.S. relations and for Korean businesses, instead of dragging things out under prolonged uncertainty."

Korea's Trade Minister Cheong In-kyo, front right, and U.S. Trade Representative Jamieson Greer, front left, speak during their meeting on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade Meeting, on the southern resort island of Jeju, May 15. Courtesy of Ministry of Trade, Industry and Energy

On the other hand, some experts view the court ruling as invalidating the July 8 deadline for Korea’s “July package,” a comprehensive deal intended to eliminate U.S. tariffs on Korea.

Chang Sang-sik, director of the Institute for International Trade at the Korea International Trade Association, explained that the Trump administration is likely to seek a temporary stay on the initial injunction ruling while proceeding with the appeal. However, as the court has already made it clear that tariff imposition overstepped Trump’s authority, it is unlikely that the court will grant such a stay.

“The July 8 timeline has become meaningless, as it was set based on the 90-day suspension of reciprocal tariffs. This means there is now room for the negotiation period to be more flexible and possibly extended,” he said.

“If (Trump administration’s attempt to impose a temporary stay) is not accepted, the negotiations for reciprocal tariff will probably lose its momentum and leverage significantly.”

However, the director emphasized that Korea should remain prepared for the possibility for Trump to take alternative approaches, such as leveraging Section 232 or Section 301 tariffs, which can be used to restrict imports.

“Korea’s government needs to be ready to respond to a range of potential moves from the Trump administration; a chance that Trump might introduce new cards in the negotiation.”

Meanwhile, Korea’s trade ministry also refrained from making any definitive assessments about the ruling’s impact, noting that it is still too early to draw conclusions.

“At this point, we’re working to understand the details of the ruling and how the Trump administration’s appeal might play out, especially given that this is just an initial ruling,” a high-ranking official at the ministry said.

“We maintain the position to be exempt from not only the reciprocal tariffs, but also the item-specific tariffs … So, we’re taking a calm, measured approach and closely monitoring how the situation unfolds in the U.S., without concluding it as ‘good’ or ‘bad’ for us.”