Carney welcomes U.S. court decision striking down parts of Trump's tariffs agenda

Prime Minister Mark Carney said Thursday he welcomed a U.S. court decision that struck down parts of Donald Trump's tariffs regime, with judges saying the president overstepped his constitutional authority by imposing sweeping levies on global goods.

Carney said the court's findings are "consistent with Canada's long-standing position" that Trump's tariffs are "unlawful as well as unjustified."

But Carney warned that this court decision nullifies only some of Trump's Canadian-focused tariffs — the border security ones imposed to apparently spur a crackdown on drugs and migrants are now in jeopardy — but other U.S. tariffs on Canadian steel, aluminum and autos are unaffected by this particular judgment.

Carney said those remaining levies — called "Section 232" tariffs because of the section of the trade law used to impose them on "national security" grounds — are also "unjustified," and there's a risk Trump could use that section to target other "strategic sectors" in the Canada, including lumber, semiconductors and pharmaceuticals.

"We recognize that our trading relationship with the U.S. is still profoundly and adversely affected," he said.

Carney said it remains a top priority for his government to "establish a new economic and security relationship" with the U.S. even after judges handed Trump a loss.

The United States Court of International Trade dealt a possibly fatal blow to big chunks of Trump's trade agenda Wednesday by ruling he didn't have the authority to do what he's done with so-called "reciprocal" tariffs on imports from virtually every country because imposing tariffs should generally be the responsibility of lawmakers in Congress.

Importantly, the court's decision also voids the border-related tariffs that were slapped on Canadian goods to supposedly rein in fentanyl exports and migrants, with the court ruling imposing tariffs using emergency powers for this reason was inappropriate because there's no straight line between trade action and the problem Trump is trying to solve.

"The court does not pass upon the wisdom or likely effectiveness of the president's use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective but because [the law] does not allow it," the court ruled, saying border tariffs are a "clear misconstruction" of the president's trade powers under the International Emergency Economic Powers Act (IEEPA).

"We do not read IEEPA to delegate an unbounded tariff authority to the president. We instead read IEEPA's provisions to impose meaningful limits on any such authority it confers."

The White House has already said it will appeal the decision to a higher court.

The lower trade court's decision to invalidate the border-related tariffs that have sent some Canadian businesses into a tailspin is undoubtedly a relief.

While Trump baked in some exemptions and lower tariff rates for U.S. companies bringing in Canadian goods that were compliant with the Canada-U.S.-Mexico Agreement (CUSMA), many had not done the necessary paperwork to be certified under the trade deal.

In announcing the border tariffs, the White House estimated that only 38 per cent of imports from Canada claimed a CUSMA exemption last year, which means the tariffs were likely widely applied on goods, at least to start, despite the trade deal carve-outs.