Trump’s use of emergency powers for tariffs rejected by trade judges

A major component of former President Donald Trump’s economic policy has been struck down, as the US Court of International Trade ruled that the bulk of his global tariffs were imposed unlawfully.

The decision, handed down by a three-judge panel in Manhattan, sided with Democratic-led states and small businesses that challenged the legitimacy of Trump’s use of emergency powers to justify the sweeping levies, Caliber.Az reports, referring to foreign media.

The Trump administration has filed an appeal, setting the stage for a possible review by the US Supreme Court, which could ultimately determine the future of the tariffs and the broader implications for presidential authority in trade matters.

The court’s ruling suspends most of Trump’s tariffs, including his flat global tariff, elevated rates on Chinese imports, and fentanyl-related tariffs on China, Canada, and Mexico. However, tariffs enacted under other statutory authorities — such as Section 232 and Section 301, which cover steel, aluminium, and automotive products — remain in effect.

Trump had relied on the International Emergency Economic Powers Act (IEEPA), typically used for imposing sanctions, to implement these broad trade restrictions. He argued that persistent and significant US trade deficits posed an “unusual and extraordinary threat” to national security and economic stability.

However, the court found that Trump’s initial executive order announcing global tariffs, as well as subsequent orders imposing retaliatory tariffs, exceeded the authority granted under IEEPA. In particular, an order targeting Mexico and Canada over alleged drug trafficking concerns was ruled invalid, as the measures failed to directly address the issue of trafficking.

A conservative legal group, the Liberty Justice Centre, brought the challenge on behalf of small businesses, contending that the trade deficits do not constitute a genuine emergency under the law. They argued that even if such a threat existed, the statute does not permit the blanket imposition of tariffs.

Democratic-led states joined the legal effort, asserting that Trump’s tariffs amounted to a significant tax on American consumers and overstepped presidential power by infringing on Congress’s authority over trade. They also questioned the justification for tariffs against Mexico and Canada, noting that the broad measures failed to specifically target goods linked to drug trafficking, thereby undermining the stated emergency rationale.

In response to the ruling, a White House spokesperson defended the administration’s approach, stating, “It is not for unelected judges to decide how to properly address a national emergency.” The spokesperson, Kush Desai, added that America’s longstanding trade deficits have harmed communities, undercut workers, and weakened the national defence industrial base — claims that the court did not explicitly refute.

The ruling comes as one of the most significant legal defeats for Trump, whose administration faced numerous lawsuits over its expansive use of executive authority, including on federal worker dismissals, immigration restrictions, and budgetary measures. The decision also adds further uncertainty to the global economic landscape, which has seen extreme volatility since Trump announced the tariffs in early April. Trillions of dollars in market value have fluctuated in the weeks since, particularly in light of ongoing negotiations with China.

New York Governor Kathy Hochul welcomed the court’s decision, calling it a victory for states’ rights and consumer protection.

By Tamilla Hasanova