A U.S. trade court has effectively halted President Donald Trump’s proposed tariffs, ruling that the president exceeded his authority by imposing broad duties on imports from countries that sell more to the United States than they purchase from it. This pivotal decision highlights the delicate balance of power as outlined in the U.S. Constitution.
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The Court of International Trade emphasized that Congress holds exclusive authority to regulate international commerce, a power that the president’s emergency powers cannot override. As articulated by the three-judge panel, “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.”
Shortly after the ruling, the Trump administration filed a notice of appeal, questioning the court’s jurisdiction.
This Manhattan-based court, which deals with international trade and customs law disputes, allows its decisions to be appealed to the U.S. Court of Appeals for the Federal Circuit and, potentially, to the U.S. Supreme Court.
Trump’s broad imposition of tariffs has impacted businesses of all sizes, centralizing the tariffs as a focal point of his ongoing trade wars, which have significantly disrupted global commerce and unsettled financial markets.
As companies strive to navigate supply chains, production schedules, staffing decisions, and pricing strategies, they have faced the repercussions of sudden tariff implementations and reversals. A White House spokesperson argued that U.S. trade deficits represent “a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base—facts that the court did not dispute.”
In response to the ruling, White House spokesperson Kush Desai stated, “It is not for unelected judges to decide how to properly address a national emergency.” Meanwhile, financial markets reacted positively to the court’s decision, with the U.S. dollar gaining strength against currencies such as the euro, yen, and Swiss franc. Wall Street futures also rose, reflecting optimism across Asian markets.
If this ruling remains in effect, it undermines Trump’s strategy of leveraging steep tariffs to secure concessions from trading partners and to redress a $1.2 trillion U.S. goods trade deficit, which were key promises during his campaign. Without the immediate leverage from the tariffs, originally ranging from 10% to 54%, the administration may have to engage in time-consuming trade investigations under more traditional laws to support its tariff objectives.
The ruling stemmed from two lawsuits: one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses importing goods from countries targeted by the tariffs, and another by 13 U.S. states. Businesses—from a New York wine and spirits importer to a Virginia-based manufacturer of educational kits and musical instruments—have asserted that these tariffs could significantly impede their operations.
In its ruling, the trade court noted, “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.” Currently, at least five additional legal challenges to the tariffs are pending.
Oregon Attorney General Dan Rayfield, whose office leads the states’ lawsuit, characterized the tariffs as unlawful and economically damaging, stating, “This ruling reaffirms that our laws matter and that trade decisions can’t be made on the president’s whim.”
President Trump has claimed expansive authority to set tariffs under the International Emergency Economic Powers Act (IEEPA), which has typically been used for sanctions against U.S. adversaries. Notably, he is the first president to wield this law to impose tariffs.
The Justice Department contends that the lawsuits should be dismissed, arguing that the plaintiffs have not yet been harmed by tariffs they have not yet paid and that only Congress, not individual businesses, can challenge a national emergency declared by the president under IEEPA.
When imposing the tariffs in early April, Trump characterized the trade deficit as a national emergency, justifying a 10% uniform tariff on imports, escalating rates for countries with significant deficits, notably China. A week later, however, many country-specific tariffs were suspended, and the Trump administration announced on May 12 that it would temporarily reduce the highest tariffs on China as negotiations for a longer-term trade deal progressed. Both nations agreed to cut tariffs for a minimum of 90 days, marking a temporary thaw in trade tensions.
Edited By Ali Musa
Axadle Times International – Monitoring
