ISLAMABAD (PEN) : A U.S. federal trade court has blocked the Trump administration’s sweeping tariff orders, ruling that the former president overstepped his authority under existing trade law. The decision delivers a major setback to Donald Trump’s trade policy, which heavily relied on unilateral tariff actions targeting countries with significant trade surpluses with the U.S.
Court Rules Tariffs Violated Congressional Powers
In a unanimous decision issued Wednesday, a three-judge panel from the U.S. Court of International Trade declared the tariffs unlawful, stating that the U.S. Constitution grants Congress — not the president — the exclusive authority to regulate international commerce.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because \[federal law] does not allow it,” the panel noted in its ruling.
The Trump administration swiftly filed a notice of appeal, contesting the court’s jurisdiction and defending its use of emergency economic powers.
Tariffs Imposed Under Emergency Powers
The now-blocked tariffs, ranging from 10% to as high as 54%, were implemented under the International Emergency Economic Powers Act (IEEPA) — a law typically used to target hostile nations or freeze foreign assets in crisis situations. This marked the first instance of a U.S. president invoking IEEPA to apply broad import tariffs.
A White House spokesperson defended the administration’s strategy, citing trade imbalances as a national security issue.
“It is not for unelected judges to decide how to properly address a national emergency,” said Kush Desai, adding that trade deficits had “decimated American communities” and “weakened our defense industrial base.”
Economic and Legal Ramifications
The court’s decision stemmed from two lawsuits — one brought by the Liberty Justice Center on behalf of five small U.S. importers, and another by a coalition of 13 states led by Oregon Attorney General Dan Rayfield.
“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Rayfield said in a statement, calling the tariffs “unlawful, reckless and economically devastating.”
The plaintiffs, which included businesses ranging from wine importers in New York to education material suppliers in Virginia, argued that the tariffs threatened their ability to operate.
“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 court stated.
The Justice Department contended that the cases should be dismissed, arguing the plaintiffs had not been directly harmed and that only Congress could challenge a national emergency declaration under IEEPA.
Markets React Positively
Financial markets responded positively to the ruling. The U.S. dollar gained sharply against major currencies, including the euro and yen, while Wall Street futures and Asian equities saw an uptick.
Without the immediate enforcement of tariffs, the administration may now be forced to pursue more conventional and lengthy trade investigations under established trade laws, diminishing its leverage in negotiations with key trading partners, particularly China.
Appeal Likely to Reach Higher Courts
The ruling can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and potentially to the U.S. Supreme Court. At least five additional legal challenges to the tariff policy are currently pending.
As of mid-May, the Trump administration had paused several country-specific tariffs and agreed to reduce certain rates on Chinese goods temporarily as part of ongoing negotiations.
The broader implications of this legal setback could reshape the limits of executive authority in trade policy, especially under emergency statutes like IEEPA.
