President Donald Trump has claimed that he has the power to bypass Congress and impose extensive import duties on foreign products.
Now, a federal appeals court in the USA has put an obstacle in his way and ruled that the majority of the duties are illegal.
It was not entirely unexpected. From an international context, it is of course extremely embarrassing that the judiciary in this way goes against Trump's trade policy. It becomes a kind of judicial slap, says Robert Bergqvist.
”Remain as they are”
He points out, however, that Trump can appeal and does not believe that the court's ruling will lead to the duties being withdrawn.
They remain as they are and politically, the Republicans also have control over the Supreme Court in the USA. When a decision is made there, I believe there is a high probability that it will go through anyway.
How does this affect the Swedish economy?
This is of course anecdotal evidence, but when I travel around and meet companies, I am struck by the fact that they are still relatively calm and believe they can handle this trade war. We economists have a tendency to underestimate companies' creativity and adaptability, says Robert Bergqvist and continues:
The uncertainty instead hits households that become more cautious about consuming.
Unclear effects
The appeals court allows, despite its ruling, the duties to remain in place until October 14, to give the White House time to appeal.
No one yet knows what effects Trump's trade duties will have in the future – and if they will hit the domestic economy.
It will be interesting to see the outcome in next year's midterm elections in the USA. That's when the people's court gives its verdict. Then we will see the effects of this.
