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When issuers are under financial stress, they often are unable to refinance higher interest debt at market rates. Consequently, even without defaulting, stress increases the likelihood that they don't call their outstanding debt as you expect.These risks depend on a number of factors, including financial, economic and political events, over which the Banks have no control, including trade policy agenda, such as retaliatory actions by other countries.
https://youtu.be/ocATJvRgAHI“Rethinking Investing” is legendary financial consultant Charley Ellis’ “eureka” moment when all his investment wisdom and experience came together in one short volume.
The Trump administration is racing to halt a major blow to the president’s sweeping tariffs after a US court ruled they “exceed any authority granted to the president.” A US trade court ruled the US president’s tariffs regime was illegal on Wednesday in a dramatic twist that could block Trump’s controversial global trade policy.
On Thursday, an appeals court agreed to a temporary pause in the decision pending an appeal hearing. The Trump administration is expected to take the case to the supreme court if it loses. The ruling by a three-judge panel at the New York-based court of international trade came after several lawsuits argued Trump had exceeded his authority, leaving US trade policy dependent on his whims and unleashing economic chaos around the world.
On Thursday, the Trump administration filed for “emergency relief” from the ruling “to avoid the irreparable national-security and economic harms at stake”. The White House press secretary, Karoline Leavitt, said the judges had “brazenly abused their judicial power to usurp the authority of President Trump” in what she characterised as a pattern of judicial overreach. “Ultimately the supreme court must put an end to this,” she said.
Leavitt’s comments came as a second judge, Washington DC district court judge Rudolph Contreras, called the tariffs “unlawful” and ordered a preliminary injunction on the collection of tariffs from a pair of Illinois toy importers, which brought the case. Tariffs typically need to be approved by Congress but Trump has so far bypassed that requirement by claiming that the country’s trade deficits amount to a national emergency. This had left the US president able to apply sweeping tariffs to most countries last month, in a shock move that sent markets reeling.
The court’s ruling stated that Trump’s tariff orders “exceed any authority granted to the president … to regulate importation by means of tariffs”. The judges were keen to state that they were not passing judgment on the “wisdom or likely effectiveness of the president’s use of tariffs as leverage”. Instead, their ruling centered on whether the trade levies had been legally applied in the first place. Their use was “impermissible not because it is unwise or ineffective, but because [federal law] does not allow it”, the decision explained.
Financial markets cheered the court’s ruling, with the US dollar rallying in its wake, soaring against the euro, yen and Swiss franc. In Europe, the German Dax rallied 0.9%, while France’s Cac 40 rose 1%. The UK’s FTSE 100 blue-chip index ticked up 0.1% at the start of trading. Stocks in Asia also climbed on Thursday, while in the US stock markets all rose marginally.
The court ruling immediately invalidated all of the tariff orders that were issued through the International Emergency Economic Powers Act (IEEPA), a law meant to address “unusual and extraordinary” threats during a national emergency. The judges said Trump must issue new orders reflecting the permanent injunction within 10 days.
The ruling, if it stands, blows a giant hole through Trump’s strategy to use steep tariffs to wring concessions from trading partners, draw manufacturing jobs back to US shores and shrink a $1.2tn (£892bn) US goods trade deficit, which were among his key campaign promises. Without the help of the IEEPA, the Trump administration would have to take a slower approach, launching lengthier trade investigations and abiding by other trade laws to back the tariff threats.
The decision is also likely to embolden other challenges to Trump’s policy. Last month, California’s governor, Gavin Newsom, filed a lawsuit against the tariffs, arguing they were “illegal, full stop”. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel and aluminium, using a different statute, so these are likely to remain in place for now.
Stephen Miller, the White House deputy chief of staff for policy, hit out at the ruling in a social media post claiming “the judicial coup is out of control”.
At least seven lawsuits have challenged Trump’s border taxes, the centerpiece of Trump’s trade policy. The court made its ruling in response to two cases. One was filed by a group of small businesses, including a wine importer, VOS Selections, whose owner said the tariffs were having a major impact and his company may not survive.
The plaintiffs in the tariff lawsuit argued that the emergency powers law did not give the president the power to apply tariffs, and even if it had done, the trade deficit did not qualify as an emergency, which is defined as an “unusual and extraordinary threat”. The US has run a trade deficit with the rest of the world for 49 consecutive years.
WASHINGTON (AP) — A federal trade court on Wednesday blocked President Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law, swiftly throwing into doubt Trump’s signature set of economic policies that have rattled global financial markets, frustrated trade partners and raised broader fears about inflation intensifying and the economy slumping.
The ruling from a three-judge panel at the New York-based Court of International Trade came after several lawsuits arguing Trump has exceeded his authority and left U.S. trade policy dependent on his whims. But for now, Trump might not have the threat of import taxes to exact his will on the world economy as he had intended, since doing so would require congressional approval. What remains unclear is whether the White House will respond to the ruling by pausing all of its emergency power tariffs in the interim.
The ruling amounted to a categorical rejection of the legal underpinnings of some of Trump’s signature and most controversial actions of his four-month-old second term. The ruling faces certain appeal — and the Supreme Court will almost certainly be called upon to lend a final answer — but it casts a sharp blow.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court wrote, referring to the 1977 International Emergency Economic Powers Act. While tariffs must typically be approved by Congress, Trump has said he has the power to act to address the trade deficits he calls a national emergency.
He is facing at least seven lawsuits challenging the levies. The plaintiffs argued that the emergency powers law does not authorize the use of tariffs, and even if it did, the trade deficit is not an emergency because the U.S. has run a trade deficit with the rest of the world for 49 consecutive years.
Trump imposed tariffs on most of the countries in the world in an effort to reverse America’s massive and long-standing trade deficits. He earlier plastered levies on imports from Canada, China and Mexico to combat the illegal flow of immigrants and the synthetic opioids across the U.S. border.
The lawsuit was filed by a group of small businesses, including a wine importer, V.O.S. Selections, whose owner has said the tariffs are having a major impact and his company may not survive. A dozen states also filed suit, led by Oregon. “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Attorney General Dan Rayfield said.
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