Court Intervenes in Trump's Economic Agenda, Tariffs in Major Trouble
A federal trade court ruled Wednesday that President Donald Trump exceeded his authority by imposing sweeping tariffs last month.
The decision came from a three-judge panel of the U.S. Court of International Trade, based in New York City, according to the Associated Press.
On what he billed as Liberation Day on April 2, Trump announced a universal 10 percent tariff and higher reciprocal tariffs for those countries his administration identified as being particularly egregious in blocking U.S. products from their markets.
The AP noted there were at least seven plaintiffs who challenged the levies in court.
“Tariffs must typically be approved by Congress. Trump has said he has the power to act to address the trade deficits he calls a national emergency,” the outlet said.
The plaintiffs argued that the 1977 International Emergency Economic Powers Act did not authorize the president to impose tariffs.
Further, even if it did, they contended that the record trade deficit of $1.2 trillion in 2024 did not constitute an emergency, saying the U.S. has had a trade imbalance for the last 49 years.
The three-judge panel agreed with the plaintiffs, writing, “The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
The judges held under the IEEPA, “First, there must be a ‘threat … which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.’
“Second, this threat must be ‘unusual and extraordinary.’
“Third, a national emergency must be declared with respect to the threat. And fourth, the President’s exercise of IEEPA authority must ‘deal with’ the threat.”
The court found that the threat posed by the trade deficit was not “unusual” or “extraordinary.”
Further, “Because of the Constitution’s express allocation of the tariff power to Congress, see U.S. Const. art. I, § 8, cl. 1, we do not read IEEPA to delegate an unbounded tariff authority to the President.”
NEW: Three-judge panel of the Court of International Trade rules that Congress did not delegate to Trump unbounded authority to set tariffs. The challenged tariff orders are enjoined. https://t.co/OiA1ZpnZI3 pic.twitter.com/PpwF2KQL83
— Orin Kerr (@OrinKerr) May 28, 2025
Therefore, “The challenged Tariff Orders will be vacated and their operation permanently enjoined.”
Rather than issue a temporary injunction, the judges issued a summary judgment for the plaintiffs, ending the case before the court entirely.
The Trump administration can appeal the ruling to the Washington D.C.-based Court of Appeals for the Federal Circuit, and ultimately to the U.S. Supreme Court, if necessary.
Axios reported, “With tariffed goods arriving at U.S. ports every day, the confusion over what’s in force and what to charge could throw imports into chaos.
“Markets, and businesses, will likely be paying rapt attention in coming days to how the administration responds and whether higher courts intervene,” it added.
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