In a sweeping ruling on Wednesday, the U.S. Court of International Trade halted President Donald Trump’s blanket tariffs, stating he overstepped his presidential authority by imposing them without Congressional approval.
The court determined that while the president holds certain emergency powers, the U.S. Constitution reserves the regulation of commerce with foreign nations for Congress.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel wrote in the decision. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”
The judges issued a permanent injunction and required the President Donald Trump administration to draft new orders within 10 days. Almost immediately, the administration filed a notice of appeal and contested the court’s jurisdiction.
The U.S. Court of International Trade invalidated all of Trump’s tariff orders since January that were rooted in the International Emergency Economic Powers Act (IEEPA). This act is designed to counter "unusual and extraordinary" threats during a national emergency. The ruling did not touch tariffs based on other statutes, such as those on steel, aluminum, or automobiles.
The decision came as a relief to many U.S. businesses and financial markets. Wall Street futures surged, the U.S. dollar rallied, and equities across Asia rose.
"It is not for unelected judges to decide how to properly address a national emergency," said White House spokesperson Kush Desai in response, maintaining that trade deficits still constitute a national emergency.
The ruling puts into question the Trump administration’s leverage in ongoing negotiations with major trading partners, including China and the European Union.
Companies of various sizes, including those involved in wine imports and educational kit manufacturing, expressed concerns about the tariffs hurting their operations. The court’s ruling came as part of two lawsuits filed by the Liberty Justice Center and 12 U.S. states.
“There is no question here of narrowly tailored relief; if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all,” the panel said.
Oregon Attorney General Dan Rayfield praised the decision:
“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim.”
The Justice Department argued for dismissal, claiming plaintiffs hadn't suffered damages and that Congress alone can challenge emergency declarations under IEEPA.
Trump used tariffs extensively during his presidency to combat a $1.2 trillion U.S. goods trade deficit and encourage domestic manufacturing. He introduced a 10% tariff across all imports in April, raising rates for countries with high trade deficits.
Many of these country-specific duties were paused within a week. On May 12, the Trump administration eased the steepest China tariffs while negotiating a broader trade agreement. Both nations agreed to temporarily lower tariffs for 90 days.
This landmark decision by the U.S. Court of International Trade sets a critical precedent on the separation of powers in trade regulation. It underscores that while the president can act during national emergencies, such authority has legal boundaries, particularly under laws like IEEPA.
The court’s rejection of Trump’s blanket tariffs also reflects broader concerns about the unchecked use of executive power in trade policy. Businesses, especially small and medium enterprises, have been navigating an unpredictable trade environment, and this ruling may offer them some respite.
While the Trump administration intends to appeal, the case could reshape how future administrations approach economic emergencies and international trade disputes.
As legal proceedings continue, stakeholders worldwide will be watching closely to see whether this decision will stand or be overturned in higher courts. Regardless of the outcome, this moment marks a significant challenge to the legal foundations of Trump’s tariff-driven trade approach.