SA chicken producers have not had much luck when it comes to their own government’s support, but they may yet get lucky thanks to the judiciary.
Last week the US Court of Appeal for the federal circuit struck down President Donald Trump’s “reciprocal” tariffs, which he implemented under the assumed authority of the International Emergency Economic Powers Act.
The federal circuit affirmed the Court of International Trade’s May ruling with a 7-4 majority. The Trump administration will probably now appeal the matter to the Supreme Court. If the decision stands on appeal all tariffs so levied will have to be repaid, but the tariffs themselves remain in force pending an appeal outcome.
SA poultry producers, having invested billions in growing local capacity, and small chicken farmers still recovering from bird flu culling without compensation, would get a reprieve from facing dumped US chicken only if the US Supreme Court refuses to take the case or rules against the tariffs.
However, in a bid to avert 30% tariffs on all SA goods exported to the US, SA trade, industry & competition minister Parks Tau seems to have already sacrificed SA chickens on the altar of trade — without consulting the industry. His department’s proposal to allow US chicken producers to dump 72,000 tonnes a year in SA is bound to be hugely harmful to the biggest sector in SA agriculture, putting at risk not only thousands of chicken jobs, but also grain and soya farmers and other businesses in the chicken value chain. It borders on reckless when considering that in many rural areas chicken farmers are the largest employers.
But SA chicken may yet be saved by US legal action, despite a letter that the US solicitor-general recently sent to the Federal Circuit Court of Appeals arguing that the tariffs must stay in place even if the court rules against them, because repealing them would have “catastrophic consequences”. According to the solicitor-general, if the court strikes down the tariffs, Trump has no legal authority to replace them with equivalent tariffs under other statutes, and the trade deals recently negotiated by the president would all have to unwind, at great cost to the US. By some calculations the tariffs could represent revenue of $100bn or more, and the solicitor-general clearly anticipated losing the upcoming court cases.
Trump has relied on the International Emergency Economic Powers Act in negotiating trade deals and imposing a worldwide regime of baseline and so-called reciprocal tariffs with virtually every country, but is now facing stiff opposition in the US, with nine legal challenges in progress. The law in question allows the president to use economic sanctions, seize assets and use other remedies in a declared emergency, but not to levy tariffs.
In terms of the US constitution a president cannot use tariff authority that is not specifically granted to him by Congress. Last year, before Trump was elected, the Supreme Court upheld limits to presidential authority in the Loper Bright case. In May this year the US Court of International Trade also ruled that the law does not permit the president to levy tariffs, so the duties are illegal. Three federal courts have now ruled that imposing tariffs in terms of the International Emergency Economic Powers Act is unlawful.
Last week all 11 judges of the Federal Circuit Court of Appeals heard Trump’s appeal case en banc, which some experts believe indicated three things:
- That the court wished to reach a definitive ruling on the merits as soon as possible. Such a ruling might prevent Trump from making a successful appeal to the Supreme Court.
- That the court wanted to prevent Trump from approaching the Supreme Court for an emergency stay of the Court of International Trade decision if they ruled against him on the merits. A strong decision by the federal circuit on the merits would make an emergency stay by the Supreme Court less likely.
- That all tariffs are refunded sooner rather than later.
Meanwhile, several other related cases are also in court. In Firedisc v Trump the plaintiffs seek a quick ruling from the US District Court in western Texas that Trump has overstepped his powers by imposing new, rapidly shifting duties on almost all US trading partners. The department of justice wants this case sent to the Court of International Trade. The Firedisc case is at least the ninth suit so far over Trump’s “emergency” tariffs on Canada, China, Mexico and US trading partners generally — including the 30% tariffs on SA — which are divided almost evenly between the Court of International Trade and regional district courts.
Though the Federal Circuit Court of Appeals has also now struck down the tariffs, Trump will almost certainly appeal and he can use other laws to impose narrower tariffs. These tariff authorities have strict limitations and time-consuming process requirements that would not permit imposing immediate across-the-board tariffs on a wide range of countries, as was announced by the president in his “Liberation Day” speech in April.
The ground has clearly shifted politically in the US, and SA Poultry may yet get lucky thanks to the US courts, and emerge bloodied but alive from the SA government’s unnecessary trade and political collisions with Trump.
• Baird is founder of the FairPlay movement.
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