Federal Court Rejects Trump’s ‘Unbounded Authority’ To Impose Worldwide Tariffs

A federal court ruled Thursday evening that President Donald Trump exceeded his legal authority when he imposed sweeping global tariffs under the guise of an economic emergency. In a unanimous decision, a three-judge panel of the U.S. Court of International Trade found that the International Emergency Economic Powers Act (IEEPA) does not authorize the executive branch to impose worldwide “reciprocal” tariffs, including those targeting Canada and Mexico, without congressional approval.

The New York Times reports that the ruling weakens President Trump’s ability to pressure other nations into favorable trade deals with the United States:

Before Mr. Trump took office, no president had sought to invoke the International Emergency Economic Powers Act, a 1977 law, to impose tariffs on other nations. The law, which primarily concerns trade embargoes and sanctions, does not even mention tariffs.

But Mr. Trump adopted a novel interpretation of its powers as he announced, and then suspended, high levies on scores of countries in April. He also used the law to impose tariffs on products from Canada and Mexico in return for what he said was their role in sending fentanyl to the United States.

The bipartisan panel concluded that the administration’s declaration of a national economic emergency did not meet the legal standards required under the IEEPA. The ruling gave the executive branch 10 days to dismantle the bureaucratic apparatus sustaining the tariffs and ordered U.S. Customs and Border Protection to stop collecting the associated duties. The White House immediately filed an appeal with the U.S. Court of Appeals for the Federal Circuit.

The ruling targets what Trump dubbed “Liberation Day” tariffs — a set of levies that imposed a 10% duty on a wide range of imported goods, with steeper rates for countries running large trade surpluses with the United States, including China. These measures were part of a broader effort to recalibrate long-standing trade imbalances and restore leverage to U.S. manufacturers.

Despite the setback, other tariffs imposed by the Trump administration under different statutory bodies remain in place. These include:

• Section 301 tariffs, enacted in response to China’s trade and intellectual property practices.
• Section 232 tariffs, applied to steel and aluminum imports on national security grounds.

The president’s legal team adamantly defends the tariffs as a legitimate tool to safeguard national security and protect American industry.

However, the injunction will remain in effect unless a higher court reverses the ruling.