Key Points
- The U.S. Court of International Trade blocked Trump’s blanket tariffs, citing constitutional overreach.
- The court ruled that only Congress, not the president through emergency powers, can regulate foreign trade.
- The decision was made in response to lawsuits filed by small businesses and 12 U.S. states.
- The Trump administration has appealed the ruling, claiming national emergency authority.
In a significant legal setback for former President Donald Trump’s trade policies, the U.S. Court of International Trade issued a sweeping ruling on Wednesday blocking his administration’s blanket tariffs on imports. The three-judge panel ruled that Trump exceeded his constitutional authority by using the International Emergency Economic Powers Act (IEEPA) to justify broad tariffs, stating that only Congress holds the power to regulate foreign commerce.
The court’s decision imposes a permanent injunction on tariffs introduced in January under IEEPA. While not ruling on the effectiveness of Trump’s strategy, the judges emphasized that federal law does not permit the executive to use emergency powers to reshape trade policy unilaterally. The Trump administration immediately filed an appeal and questioned the court’s authority.
The ruling does not affect tariffs imposed under other laws, such as those targeting steel, aluminum, or autos. However, it nullifies all tariffs directly linked to Trump’s invocation of national emergency powers under the International Emergency Economic Powers Act (IEEPA). The court has instructed the administration to revise its tariff orders within 10 days.
This decision is seen as a blow to Trump’s trade agenda, which relied heavily on tariffs to pressure foreign nations, including China and the EU, into renegotiating trade deals. Businesses and supply chains had struggled with unpredictable policy shifts, and many applauded the ruling. Financial markets responded positively, with the U.S. dollar and global equities climbing on the news.
The case originated from lawsuits filed by the Liberty Justice Center, representing small U.S. businesses and 12 states, which challenged the legality of the tariffs. Plaintiffs argued the tariffs hurt their ability to operate and were imposed unlawfully. The court agreed, reinforcing the separation of powers and emphasizing that trade decisions cannot be made arbitrarily.
Despite the ruling, several legal challenges remain pending, and the U.S. Supreme Court may ultimately decide the case.
