The past four months have proven that some branches of the US government move faster than others. While President Donald Trump sprayed the world with repeated barrages of tariffs, litigation challenging his ability to do so quietly advanced in the background. Last night, the first ruling came down, and it immediately upended the signature effort of the 78-year-old Republican’s second term. The US Court of International Trade ruled that the bulk of Trump’s new import taxes were issued illegally because the administration wrongfully invoked an emergency law to justify them. While a federal appeals court temporarily paused the ruling from taking effect, the case will likely end up before the US Supreme Court. Separately, a second federal judge declared a number of Trump’s levies unlawful.
Trump has argued that his trade policies will stoke economic growth in the future, though many economists predict the opposite. And on Thursday, more data appeared to affirm their suspicions. The US economy shrank at the start of the year, restrained by weaker consumer spending and an even bigger impact from trade. Gross domestic product decreased at a 0.2% annualized pace in the first quarter. And there were also warning signs from the labor market. More on that below.
