Source: Brokerage China
US President Trump has made another new move!
Trump recently cancelled Congress-approved $4.9 billion in foreign aid, provoking opposition from Democrats and even some Republicans. Democrats have warned that any attempt to withdraw funding that Congress has approved will lead to the failure of negotiations to avoid a federal government shutdown later this year.
However, Trump also encountered two "setbacks". First, the US Court of Appeals for the Federal Circuit ruled on August 29 local time that the law invoked by US President Trump when approving tariffs on many countries did not give him the power to collect taxes. Second, a US federal judge issued a ruling on August 29, temporarily blocking the Trump administration from expediting the deportation of undocumented immigrants detained within the border without a court hearing.
Let's take a look at the detailed report!
Trump Halts $4.90 billion in Foreign Aid
U.S. Republican President Trump recently unilaterally cancelled US$4.9 billion in foreign aid approved by Congress, drawing opposition from Democrats and even some Republicans and intensifying the battle over control of spending.
According to multiple media reports from Xinhua Agency, Trump sent a letter to Republican Speaker of the House of Representatives Mike Johnson on the 28th, saying that he would not use the US$4.9 billion in foreign aid approved by Congress and planned to stop providing funds to 15 international projects. The White House Office of Management and Budget released the letter on social media platform X on the morning of August 29.
According to a court filing dated 29 August, the $4.90 billion was earmarked for foreign aid, United Nations peacekeeping operations and democracy promotion abroad, including $3.20 billion from the United States Agency for International Development, which officially closed in July.
According to Reuters, the U.S. Constitution grants Congress the right to allocate funds, and Congress funds government operations annually through legislation.If the White House does not want to spend that money, it must be approved by Congress, and Trump's latest move has completely bypassed Congress.
Russell Vought, director of the White House Office of Management and Budget, argued that Mr. Trump had the authority to freeze funds for 45 days, and a White House official told reporters that Mr. Trump's strategy had a "solid legal foundation" and that any legal challenge would fail.
The Associated Press reported that Trump's move was based on a tactic not used in nearly 50 years, known as "pocket withdrawal": the president submits a request to Congress near the end of the financial year to stop using approved funds. Because the fiscal year ends on Sept. 30 and Congress cannot respond within the 45-day legal deadline, the funds will eventually lapse automatically. Standardizing the move by the White House would effectively bypass Congress' power to decide on key spending and could wrest some spending control from the House and Senate.
Democrats have warned that any attempt to withdraw funds that Congress has approved will lead to a failure in negotiations to avoid a federal government shutdown later this year. Senate Democratic leader Chuck Schumer said Trump’s tactics were illegal, intended to indicate his intention of ignoring any spending laws passed by Congress, forcing the federal government to shut down at the end of September.
Is the Trump administration keeping tariffs effective through other regulations?
The U.S. Court of Appeals for the Federal Circuit ruled on the 29th local time that the laws invoked by U.S. President Trump when approving the imposition of tariffs on many countries did not give them tax power. However, the steel, aluminum and automobile tariffs imposed by the Trump administration under Section 232 of the Trade Expansion Act of 1962 will not be affected by this ruling.
Mr. Trump refused to recognise the ruling and announced he would appeal to the Supreme Court. "All tariffs remain in place... If they were removed, it would be a disaster for the country", Mr. Trump said via his social media feed, where he wrote: "Tariffs are the best tool to help our workers and support companies that produce quality'Made in America 'products."
The Federal Circuit Court of Appeal has allowed the current tariff policy to beined until October 14 in order for the Trump administration to appeal to the Supreme Court.
People in the legal profession believe that if the Supreme Court accepts the case, its judgment will affect the legal basis of U.S. trade policy and have an important impact on U.S. and global economy and trade. At present, six of the nine justices of the Supreme Court of the United States are conservatives, and may be inclined to support the president's expansion of executive power. If the Supreme Court upholds the original judgment, the Trump administration may still continue the tariff policy through other legal tools.
William Reinsch, a researcher at the Center for Strategic and International Studies and a former senior official of the U.S. Department of Commerce, said that the Trump administration had previously prepared for the ruling that "tariffs were illegal". "As we all know, this government has long anticipated this result and is formulating Plan B-speculating that its purpose is to maintain the effectiveness of tariff measures through other legal provisions."
Art Hogan, chief market strategist at B.Riley Wealth, pointed out: "The last thing you want in both the market and corporate America is more uncertainty in the trade sector."
The ruling by the Federal Circuit Court of Appeals is a major setback for Trump, whose erratic trade policies have shaken financial marekts, created uncertainty for businesses and raised concerns about rising prices and slowing economic growth.
Josh Lipsky, an international economics expert at the American think tank Atlantic Council, said putting Trump's entire economic agenda on track for potential conflict with the Supreme Court "is something we have never seen before." Art Hogan, chief market strategist at Riley Wealth Management in the United States, said that the last thing markets or companies need is trade uncertainty.
On August 29, local time, a U.S. federal judge issued a ruling temporarily preventing the Trump administration from rapidly expelling undocumented immigrants detained within the border without a court hearing.
On the same day, District Court Judge Jay Cobb wrote in a 48-page notice: “The government must provide them with a legitimate procedure when applying the regulation to a large number of people living in the U.S. mainland, who have never been quickly deported before.
Since taking office in January this year, the Trump administration has pursued a tough policy of deporting illegal immigrants, including advocating that illegal immigrants who cannot be deported to their country of origin be deported to third countries for detention, which has triggered a series of legal lawsuits and disputes.