On the eve of the Aug. 1 deadline for negotiations over the tariffs the Trump administration has slapped on Canada and most of the world, its lawyers faced tough questions from U.S. appeals court judges over whether the president was justified in using the International Emergency Economic Powers Act. (The Logic)

Talking point: The U.S. Court of International Trade ruled in late May that the 1977 statute does not allow the president to use tariffs as “leverage” to force Canada, Mexico and China to crack down on fentanyl or to address trade deficits with other countries through so-called reciprocal tariffs. The U.S. Court of Appeals for the Federal Circuit has allowed the tariffs to remain while the case makes its way through the legal system. On Thursday, judges hearing arguments in Washington, D.C., noted the statute, which no other president has used to impose import duties, does not even mention the word tariffs. “Congress wanted to provide broad and flexible authority in the context of emergencies,” said Justice Department attorney Brett Shumate. Meanwhile, Trump chided Prime Minister Mark Carney over his plan to recognize Palestine as a state, suggesting it could complicate Canada-U.S. trade talks.