Economy

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is co-founder and chief investment strategist at Absolute Strategy ResearchDonald Trump has weaponised trade with his “liberation day” tariffs. Up until the announcement, investors had fixated on how the tariff details will impact the stocks in their portfolios. But it is clear the impact will be much broader and consequential. And there is one key risk investors need to appreciate — the potential for tariffs lead to a reduction in capital flows.The first risk is that capital is reallocated away from the US, towards non-US markets. Investor surveys, including by my firm, suggest that this is a trend that is under way and will accelerate. ETF flows also have shifted towards non-US vs US funds in the past six months.The second risk is from reduced cross-border capital flows as trade imbalances fall. Current accounts and capital accounts are inherently linked. The absolute size of current account surpluses and deficits maps closely on to the estimate of cross border capital flows by the Bank for International Settlements. If American tariffs reduce the US trade deficit, then cross-border capital flows will also probably decline.This could have a major impact on US non-bank financial institutions which I calculate now account for 70 per cent of US private sector financial assets. Accessing the large pool of global cross-border capital has contributed to their rapid growth. Their ability to re-intermediate global savings into the US economy in listed and private asset classes has been critical to the robust growth of the US economy since the financial crisis. Reduced access to global capital could constrain not only these institutions, but also those US economic activities that have depended on them for financing. This is something the president’s team may have underestimated.The third risk is the potential repatriation of funds, as capital becomes increasingly weaponised. International investors have already seen their share of US Government debt fall from 33 per cent in 2015 to 24 per cent in 2024. This will clearly fall further if foreign investors see the US as an increasingly unreliable partner and funds are repatriated in response to US tariffs.Stephen Miran, chair of the Council of Economic Advisers, goes as far to suggest in an influential paper that because “China does not have a good record abiding by [US] trade deals . . . the US ought to therefore demand some security — for instance, China’s Treasury portfolio in escrow”. This approach seems guaranteed to reduce international investor willingness to hold US debt.There are also implications for equities. International ownership of US equities has risen almost continuously over the past 20 years (and is now 18 per cent of US market capitalisation). A strategic decision by international investors to repatriate funds in retaliation against US trade actions, or simply to pay for increased defence spending, could result in an equity sell-off that could impose significant negative US wealth effects.America’s vulnerability to retribution and repatriation highlights how a world of “self-sufficient production” is likely to see a shift towards “self sufficient capital”. This may be why the US Administration is rapidly pushing ahead with its sovereign wealth fund. A large-scale privatisation programme, alongside the sale of government-owned land, could easily see the US fund become larger than the Norges Bank’s $1.8tn. This pool of capital could help offset the loss of access to global funds, and support nascent US businesses and key strategic industries.A world of reduced global capital availability will create even greater problems for the EU. European growth could struggle if local pools of private sector capital are not large enough to sustain major new investments. This would place ever greater demand on EU official capital for funding investment in defence, infrastructure, and energy. Without a rapid move towards an EU Capital Markets Union, the EU may face an existential risk. The situation for the UK is even worse, making a rapid, expansion of a National Wealth Fund imperative.While it is easy to focus on the immediate risk to global trade from US tariffs, the bigger investment risk may be from the resulting decline in global portable capital. The more the US administration weaponises trade and the dollar, the greater the risk that it prompts active capital repatriation. Indeed, as the international structures that promoted free trade since the 1980s are unwound, the greater the risk that we return to the capital controls of the 1960s and 1970s. More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldA flood of discounted Chinese imports is set to compound the economic dangers to Europe from Donald Trump’s tariffs, analysts warn, prompting Brussels to prepare measures to protect itself from a wave of cheap goods from Asia.The direct impact of the US president’s 20 per cent levy on EU products has sparked fears about the outlook for the bloc’s embattled manufacturers, who are already reeling from US levies on cars and steel.But the severity of Trump’s tariffs on economies such as China and Vietnam means Brussels is now on alert for an influx of Asian products like electrical goods and machine appliances being diverted into its own markets. The Commission is preparing fresh emergency tariffs to respond, officials said, adding that they have stepped up surveillance of import flows.“The immediate trade shock to Asia will probably reverberate back to Europe,” said Deutsche Bank’s chief Germany economist Robin Winkler. Chinese manufacturers will try to sell more of their products in Europe and elsewhere as they face “a formidable tariff wall in the US”. Some content could not load. Check your internet connection or browser settings.“We will have to take safeguard measures for more of our industries,” said a senior EU diplomat. “We are very concerned this will be another point of tension with China. I don’t expect that they are going to change their model of exporting overcapacity.”The diplomat added that the EU had already put tariffs of up to 35 per cent on Chinese EVs and that it was possible Brussels would have to go “much higher” on other products.Policymakers around the world are contemplating an epochal upheaval in the global trading system after the Trump administration stunned US trading partners with the breadth and scale of the so-called reciprocal tariffs. The measures have taken the effective US tariff rate to a level not seen since 1909, according to Yale Budget Lab. The EU is among the economies subject to a higher levy than the baseline 10 per cent tariff that the White House is applying to all its partners except Canada and Mexico.But China will be clobbered even harder. Beijing faces a “reciprocal” 34 per cent tariff, on top of a 20 per cent levy already imposed by the president. The president also targeted countries through which Chinese companies have been diverting products to the US, among them Vietnam, which faces a new tariff of 46 per cent. Beijing faces a ‘reciprocal’ 34 per cent tariff, on top of a 20 per cent levy already imposed by the US president More

How can investors parse Donald Trump’s policymaking? That is a burning question right now, as markets tumble after the US president announced tariffs on Wednesday that exceed even those of the protectionist 1930s.Viewed through the lens of mainstream 20th-century economic thinking — be it that of John Maynard Keynes or free-marketeers like Milton Friedman — such tariffs seem strangely self-sabotaging. Indeed, the so-called liberation day declared by Trump smacks of such economic lunacy that it might seem better explained by psychologists than economists. However, I would argue that there is one economist whose work is very relevant in this moment: Albert Hirschman, author of a striking book published in 1945, National Power and the Structure of Foreign Trade.In recent decades, this work has gone largely ignored, as Jeremy Adelman, a Princeton historian who wrote Hirschman’s biography, points out. No wonder. The German Jewish economist suffered such trauma in the Spanish civil war and Nazi Germany that when he arrived at the University of California, Berkeley, as an economist, he decided to study autarky.More specifically, he used the disastrous protectionism of the 1930s to develop a framework for measuring economic coercion and the exercise of hegemonic power (the academic word for bullying). However, this analysis was largely ignored by trade economists, since it ran counter to both Keynesian and neoliberal economic ideas. Instead, the book’s main impact was on antitrust analysis. The economist Orris Herfindahl later used Hirschman’s ideas to create an index measuring corporate concentration, which was adopted by the US Department of Justice, among others. However, if Hirschman had been alive to watch Trump unveil his tariff strategy in the White House Rose Garden this week, he would not have been surprised. Neoliberal thinkers often see politics as a derivative of economics. But Hirschman viewed this in reverse, arguing that “so long as a sovereign nation can interrupt trade with any country at its own will, the contest for more national power permeates trade relations”.And he viewed “commerce as . . . a model of imperialism which did not require ‘conquest’ to subordinate weaker trading partners”, as Adelman says. This is close to how the Trump advisers parse economics. But it is very different from how Adam Smith or David Ricardo saw trade flows (which they assumed involved comparably powerful players). Some economists are leaning into this shift. Just after Trump spoke, a trio of American economists — Christopher Clayton, Matteo Maggiori and Jesse Schreger —  released a paper outlining the growing field of “geoeconomics”, inspired by Hirschman.When the trio first started this research agenda, four long years ago, “hardly anyone seemed interested” in the ideas, since they were so at odds with the current frameworks, admits Maggiori. But interest is now surging, he says, predicting a looming intellectual shift comparable to that which took place after the global financial crisis. This year’s American Finance Association meeting, for instance, featured a novel session on geoeconomics, where Maurice Obstfeld, former chief economist of the IMF (and fan of Hirschman), delivered a forceful speech.This work has already produced three themes that investors should pay attention to. First, and most obviously, the trio’s analysis shows that it is dangerous for small countries to become too dependent on any large trading partner, and they offer tools to measure such vulnerability. Second, they argue that the source of America’s hegemonic power today is not manufacturing (since China controls key supply chains) but is instead financial and structured around the dollar-based system. Trump’s tariffs, therefore, are essentially an attempt to challenge another hegemon (China), but his policies around finance are an effort to defend existing dominance. (The hegemony in technological power, I would argue, is still contested.) This distinction matters for other countries trying to respond.Third, the trio argue that hegemonic power does not work in a symmetrical manner. If a bully has an 80 per cent market share, say, it usually has 100 per cent control; but if market share slips to 70 per cent, hegemonic power crumbles faster, since weaklings can see alternatives. This explains why the US has failed to control Russia via financial sanctions. And the pattern may play out more widely if other countries react to Trump’s aggressive tariffs by imagining and developing alternatives to the dollar-based financial system. Bullies seem impregnable — until they are not.Is this analysis depressing? Yes. But it shouldn’t be ignored. And if shocked investors and policymakers want to cheer themselves up, they might note something else: against all the odds, Hirschman was a life-long optimist — or “possibilist”, as he preferred to say. He thought that humans could learn from history to improve the future. Trump is ignoring that lesson now, with grim consequences. But nobody else should. [email protected] More

One scoop to start: Activist hedge fund Elliott Management is increasing the pressure on oil refiner Phillips 66, kick-starting a proxy battle calling for “sweeping changes” at the US energy conglomerate.Another scoop to start: President Donald Trump has suggested he could cut tariffs on Chinese goods if Beijing allows ByteDance, the Chinese owner of TikTok, to divest the hugely popular video sharing app to avoid a ban in the US.Welcome to Due Diligence, your briefing on dealmaking, private equity and corporate finance. This article is an on-site version of the newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday to Friday. Standard subscribers can upgrade to Premium here, or explore all FT newsletters. Get in touch with us anytime: [email protected] today’s newsletter: Wall Street’s big tariff painMarket turmoil derails Vista dealPlaid’s valuation takes a hitTrump’s tariffs rattle Wall StreetIn early 2025, Bill Ackman converted a stock position of over $1.4bn in footwear giant Nike into call options.The billionaire investor had proclaimed President Donald Trump’s return to the White House as the most “pro-business” and “pro-growth” administration in decades.But the Pershing Square founder nonetheless used the trade to take money off the table on a footwear brand that was exposed to Trump’s planned tariffs.US markets on Thursday plunged after the president unveiled the largest tariffs in about a century. Stocks fell the most since the early days of the coronavirus pandemic when the global economy was shuttered.Ackman had not hedged his $16bn portfolio ahead of Trump’s announcement unlike in the early stages of the pandemic. He is now among legions of Trump supporting Wall Street luminaries who have seen their portfolios pummeled due to the tariffs announcement.Thursday’s market sell-off was a long way from how attendees of the World Economic Forum’s conference at Davos anticipated this year would unfold.Scores of billionaire investors and corporate titans predicted at the Swiss winter resort that the world would soon be subsumed by American exceptionalism. But they were wrong. Trump’s promise to unleash economically destructive tariffs has done just that. The tariffs announcement, branded “liberation day” by the White House, has caused deep pain across Wall Street.Shares in some of the world’s biggest private capital groups were hammered. Apollo Global Management fell nearly 13 per cent while KKR plummeted more than 15 per cent. Blackstone’s stock fell nearly 10 per cent. The risks of inflation, a recession and freezing deal markets threaten to cause the private equity machine to stall anew after years of lacklustre activity and performance. Meanwhile, groups that had boomed during the private credit wave — like Ares Management and Blue Owl — also suffered as investors recalibrated growth expectations. Some dealmakers said rising loan defaults were on the horizon. The trading day was a painful reversal for the legions of financiers who had hyped up Trump’s second term in the White House as a business-friendly era that would turbocharge economic growth.Some now think the economic picture looks positively dire.Robert Koenigsberger, founder of emerging market-focused investment firm Gramercy Funds Management said the deluge of tariffs “increases the risk of a recession and materially increases the risk of stagflation”.Yet there are some investors out there who have de-risked enough that they’ve made some money — or at least haven’t lost a ton. One of them is the Oracle of Omaha.Warren Buffett’s Berkshire Hathaway barely traded down, slipping just over 1 per cent. He spent the past year dramatically cutting his exposure to equities such as Apple, and shifting into short-term Treasury bills. Apple shares fell more than 9 per cent on Thursday.A jumbo private credit refinancing gets spikedVista Equity Partners was able to celebrate earlier this year when it refinanced some high-cost private credit debt on a portfolio company.The leveraged buyout shop was hoping to catch lightning twice. But turbulence in financial markets as Trump ratcheted up his trade war has snarled Vista’s latest attempt.The private equity group has shelved plans to refinance or pay off nearly $6bn of debt and preferred equity of portfolio company Finastra, the highly leveraged financial data company it owns.The deal would have allowed Vista to refinance a $4.8bn private credit loan — which at the end of 2024 carried an 11.7 per cent interest rate — and recoup $1bn of its own money that it was forced to pump into Finastra in 2023 to obtain that private credit loan.Finastra’s private credit loan is one of the largest outstanding and Vista’s push to secure the debt in 2024 became a flashpoint in markets. Lenders were only willing to extend credit if Vista invested its own money into the business.Vista was forced to borrow against the value of one of its flagship funds to raise the cash, turning to a so-called net asset value loan. It was a novel financial manoeuvre and captivated the industry.That’s why when markets rallied earlier this year, Vista dialled up its bankers at Morgan Stanley to try to rework the deal. The bank was successful in raising $2.5bn in the loan markets to refinance private credit debt for another Vista-backed company, known as Avalara.But their efforts misfired for Finastra. Bankers initially pitched a $5.1bn senior loan with an interest rate just 3.75 percentage points above the floating rate benchmark, which would have yielded more than 8 per cent. They were willing to offer larger discounts and coupon payments on a $1bn junior loan, which Vista planned to use to redeem its preferred equity. As market volatility jumped, would-be buyers shied away and sources told DD’s Eric Platt and the FT’s Will Schmitt that the bank went pencils down. One banker who followed the Finastra deal said​ that after the balance of power favoured syndicated markets for the past half year​, “we’re going to see a pendulum swing back towards the private credit market​.”Plaid’s valuation halves on new funding roundRewind just a few years to 2021: interest rates were at rock bottom and in the era of easy money, investors threw cash at start-ups without a second thought.Fintech founders thrived in this environment, building flashy tech outfits in the previously staid business of banking. Valuation multiples soared, and money poured in. At its peak in 2021, fintechs received more than $121bn from venture capital funds. Last year, that figure was just $29.5bn. But the mood music has now changed. Investors have withdrawn their wallets as interest rates have risen and fintech valuations are taking a hiding.US-based Plaid is the latest victim of the high rate environment. The fintech, which helps consumers link their bank accounts to other websites and apps, announced on Thursday that it had its valuation slashed in half in its most recent funding round. Investors including BlackRock, Fidelity and Franklin Templeton put $575mn into the business, valuing Plaid at $6.1bn — less than half the $13bn it was worth when it last raised funds in 2021.Plaid’s chief executive Zach Perret was candid when speaking to the FT. He said the company’s last fundraising round coincided with “the peak of the market” and added that since then, “tech multiples have massively compressed”.Even still, some of the largest fintechs have increased their valuations recently. Revolut became Europe’s most valuable start-up last year with a $45bn valuation. It signals companies in the lossmaking open banking sector — which relies on data-sharing technology — haven’t picked up in the same way. Job movesKlaus Schwab, the founder of the World Economic Forum, will “start the process” of stepping down as chair of its board of trustees, weeks after the organisation promised an overhaul after an investigation into workplace discrimination.Goldman Sachs has named Heiko Weber and Trent Wilkins as co-heads of the bank’s real estate group in Emea. Weber previously focused on various real estate markets throughout Europe, while Wilkins was co-head of corporate investment grade origination in Emea.Morgan Stanley has hired Jon Swope and Mark Filenbaum as managing directors for the bank’s healthcare investment banking group, Bloomberg reports. Swope previously worked for Barclays, while Filenbaum previously worked at UBS.Kirkland & Ellis has hired Susan Burkhardt as a partner in the firm’s investment funds practice, where she’ll focus on credit funds. She previously worked for Clifford Chance. Smart readsBling, bags, booze US consumers are likely to be hit by the price rises across sectors from aviation to cars, the FT reports. Find out which goods will be hit first — and the hardest.Reverse course Meet the lawyer who helped Trump’s in-laws, the Kushners, crack down on poor tenants, and who now helps renters fight big landlords, ProPublica writes. Cost analysis Is college still worth it economically? Yes, Bloomberg writes — but who it benefits the most shifts constantly. News round-upApple loses more than $300bn in market value from Trump tariff hit (FT)Donald Trump’s sweeping tariffs ignite $2.5tn rout on Wall Street (FT)Fitch downgrades China’s sovereign debt over spending and tariffs (FT)Deloitte seeks to avoid liability over US nuclear fiasco (FT)Oil slides as Opec+ lifts output and tariffs spark global growth fears (FT)Due Diligence is written by Arash Massoudi, Ivan Levingston, Ortenca Aliaj, and Robert Smith in London, James Fontanella-Khan, Sujeet Indap, Eric Platt, Antoine Gara, Amelia Pollard and Maria Heeter in New York, Kaye Wiggins in Hong Kong, George Hammond and Tabby Kinder in San Francisco. Please send feedback to [email protected] newsletters for youIndia Business Briefing — The Indian professional’s must-read on business and policy in the world’s fastest-growing large economy. Sign up hereUnhedged — Robert Armstrong dissects the most important market trends and discusses how Wall Street’s best minds respond to them. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldDistil grain anywhere on the island of Ireland and you can call it Irish whiskey. But under Donald Trump’s tariffs, the spirits made north of the border might get an advantage.The US president has imposed a 10 per cent tariff on UK exports but 20 per cent on the EU, suggesting that whiskey sold into America from Northern Ireland will face a lower duty than that from the Republic.However, as with many agrifood products, ingredients can be sourced on one side of the Irish border and processed on the other. This potentially complicates the tariff picture for an industry worth $1.1bn in revenue in the US if goods made with inputs from the Republic of Ireland are deemed to be of EU origin.“We’re not 100 per cent sure what’s happening,” said Peter Lavery, director of Titanic Distilleries, a Belfast-based newcomer to the industry which recently announced plans to expand sales in the US.Better-known Irish whiskey brands include Jameson in the Republic and Bushmills in Northern Ireland, but it is a growing industry with more than 40 distilleries now scattered across the island. The Irish whiskey Association says nearly 4.7mn, nine-litre cases of Irish whiskey were sold in the US in 2003. Whiskey produced fully in Northern Ireland, casked there and left for three years to mature is classified as a Northern Irish product, producers say. However, many of the younger whiskey businesses in Northern Ireland buy the young product from the Republic before ageing and bottling it north of the border. “Beyond the headline rates, we don’t know which [tariff] applies,” said one industry figure. Lavery says Titanic buys from both the North and the Republic.John Kelly, McConnell’s Irish Whiskey chief, said the industry was working with the IWA and Spirits Europe “to get clarity . . . as quickly as possible”.Exports from Northern Ireland are counted as UK exports but officials say whether or not EU content sourced in the Republic of Ireland would incur the EU tariff depends on how the US determines rules of origin.“We will always act in the best interests of all UK businesses. This of course includes those in Northern Ireland which is a part of the UK customs territory and internal market,” said a UK government spokesperson. The EU is evaluating how to respond but Trump has already said he will hit back with a 200 per cent tariff on European alcohol if Europe puts counter-tariffs on US whiskey. Adrian McLaughlin, who has developed two Northern Irish whiskey brands, Outwalker and Limavady, and is this month opening the island’s first “whiskey hotel” in a 19th-century property that belonged to Winston Churchill, said tariffs could drive US bourbon prices higher too.As tariffs push up the price of Irish whiskey, “What does Bourbon do? Does Bourbon sit and retain its competitive advantage? Or does it say hold on — there’s a margin opportunity here, we’ll put our pricing up,” he said.Eoin Ó Catháin, director of the Irish whiskey Association which covers producers across the island, said engagement with the Irish government and EU continued in the hope of returning “to the reciprocal, zero-for-zero tariff environment which brought us such success”.If the tariff differential between the UK and EU remained “it’s a huge advantage” but “we are obviously preparing for the worst,” Lavery said.Irish Distillers, which owns Jameson and other Irish brands, declined to comment. Bushmills, owned by Mexico’s Becle, did not immediately respond.Irish whiskey is one of the world’s fastest-growing categories of spirit. US consumption is expected to grow by 2 per cent in volume in 2023-28, according to IWSR, an alcohol data provider.“This is not the end of the world,” said McLaughlin. “We’ll work it out.” More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldThe cost of flying goods to the US has surged as businesses rush to get products into the country before they are hit by US President Donald Trump’s sweeping tariffs.Exporters, from drugmakers to tech hardware manufacturers, have been paying almost 40 per cent more to fly goods into the US from China than they were four weeks ago. Some will continue to pay a premium to import goods by air before Trump’s latest round of tariffs are enforced in the coming days, freight executives said.But they added that the market was also bracing for a “seismic shock”, after Washington pledged to remove an exemption that excludes smaller shipments from tariffs and rigorous customs checks and has in recent years helped drive huge growth in air freight demand from Chinese online retailers.The average cost of flying cargo from China to the US at short notice rose 37 per cent to $4.14 per kg between the first and last weeks of March, after having fallen steadily since the peak Christmas shopping period, according to the most recent data from market tracker Xeneta.The average cost of sending goods by air from Europe to the US rose 7 per cent to $2.61 over the same period.The growing demand for air freight, which is faster but pricier than shipping by sea, is the latest example of businesses taking expensive measures to minimise their exposure to Trump’s even costlier tariffs.Freight executives have warned that higher costs caused by Trump’s actions will probably be passed on to consumers.China-US air cargo spot rates are still lower than levels reached a year ago, when high volumes of exports from Chinese retailers and the Houthi militant group’s attacks on ships in the Red Sea were driving significant growth in air transport.On what the president has dubbed “liberation day”, he on Wednesday announced new levies starting at 10 per cent on all US imports. For Chinese imports, Trump added a 34 per cent tariff on top of a 20 per cent charge imposed earlier this year.Ahead of his announcement, “lots of companies were trying to push in more products by air than they normally would, especially over the last three weeks”, said an executive at one of the biggest global logistics groups.This included producers of high-cost goods such as European pharmaceutical companies and Asian manufacturers of data centre equipment, he added.On Thursday, Danish shipowner and logistics group AP Møller-Maersk said it was still expecting “to see some rush airfreight orders in the US ahead of the announced tariffs going into effect”. Washington has said that its basic 10 per cent tariff will take effect on April 5, before higher taxes are enforced on April 9.But freight handlers that are benefiting from this rush are preparing for a subsequent decline in demand from China, after Washington announced on Wednesday that its “de minimis” duty exemption for goods under $800 will be lifted once “adequate systems are in place” to collect additional taxes.The exemption has long been used by retailers such as Shein and Temu to fly goods cheaply from China to their growing US customer base, boosting airlines and freight plane operators.“In my 30 years working in the air freight industry, I cannot remember any other unilateral trade policy decision with the potential to have such a profound impact on the market,” said Niall van de Wouw, chief air freight officer at Xeneta.“Ecommerce has been the main driver behind air cargo demand. If you suddenly and dramatically remove the oxygen from that demand, it will cause a seismic shock.” More

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The New Civil Liberties Alliance — a nonprofit group that describes itself as battling “violations by the administrative state” — sued the federal government on Thursday over the means by which it imposed steep new levies on Chinese imports earlier this year.The new filing, which the group said was the first such lawsuit to challenge the Trump administration over its tariffs, set the stage for what may become a closely watched legal battle. It comes on the heels of President Trump’s separate announcement on Wednesday of broader, more extensive tariffs targeting many U.S. trading partners around the world.At issue are the tariffs that Mr. Trump announced on China in February and expanded in March. To impose them, Mr. Trump cited a 1970s law that generally grants the president sweeping powers during an economic emergency, known as the International Emergency Economic Powers Act, or IEEPA.Mr. Trump charged that an influx of illegal drugs from China constituted a threat to the United States. But the alliance argued in the lawsuit, on behalf of Simplified, a Pensacola, Fla.-based company, that the administration had misapplied the law. Instead, the group said the law “does not allow a president to impose tariffs,” but rather is supposed to be reserved for putting in place trade embargoes and sanctions against “dangerous foreign actors.”Port Manatee in Palmetto, Fla., on TuesdayScott McIntyre for The New York TimesMr. Trump cited that same law as one of the legal justifications for the expansive global tariffs he announced with an executive order on Wednesday. That order raised the tariff rate on China to at least 54 percent, adding new levies on top of those that the president imposed earlier this year.Mr. Trump’s new order specifically described the U.S. trade deficit with other nations as “an unusual and extraordinary threat to the national security and economy of the United States.”For now, the alliance asked the U.S. District Court in the Northern District of Florida to block implementation and enforcement of the president’s earlier tariffs on China. “You can look through the statute all day long; you’re not going to see the president may put tariffs on the American people once he declares an emergency,” said John J. Vecchione, senior litigation counsel for the alliance.A spokesman for the White House did not immediately respond to a request for comment. More