A federal court has delivered a major blow to former President Donald Trump’s trade agenda, ruling that his sweeping tariffs on global imports violated constitutional limits on presidential authority.
The U.S. Court of International Trade, a three-judge panel based in New York, ruled that Trump overstepped his powers when he invoked the 1977 International Emergency Economic Powers Act (IEEPA) to declare a national emergency and justify wide-ranging tariffs on nearly every U.S. trading partner. The decision effectively halts tariffs Trump imposed in April, which included so-called “reciprocal” tariffs of up to 50% on countries with trade surpluses with the U.S., and a 10% baseline tariff on others.
The court’s ruling leaves in place separate tariffs on steel, aluminum, and autos that were imposed under a different legal provision requiring an investigation by the Commerce Department. However, the blocked tariffs mark a significant setback for Trump’s aggressive use of executive authority in trade policy.
“The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power,” said Eswar Prasad, a trade policy professor at Cornell University.
The decision followed a lawsuit brought by small businesses and a coalition of U.S. states challenging the legality of the tariffs. The court concluded that longstanding trade deficits do not constitute a sudden or unexpected emergency under the IEEPA and ruled the tariffs were not directly addressing the problems cited.
In a now-rejected justification, Trump had argued that chronic trade imbalances and cross-border drug and immigration issues constituted national emergencies, allowing him to bypass Congress and act unilaterally. The Constitution, however, gives Congress the explicit power to impose taxes and tariffs—a power that courts say cannot be assumed without strict limits.
Trade analysts say the ruling throws Trump’s trade strategy into disarray. Wendy Cutler, vice president at the Asia Society Policy Institute, said the decision undermines current negotiations with U.S. trading partners and adds uncertainty for companies managing global supply chains.
Trump still retains limited tariff authority under the 1974 Trade Act, which allows for 15% tariffs for a maximum of 150 days on certain countries. But that law offers far less reach than the expansive tariffs struck down by the court.
The administration is expected to appeal the decision, which could eventually reach the U.S. Supreme Court. Until then, Trump’s boldest trade policy initiative remains blocked, with legal experts saying the case reinforces the constitutional checks on presidential power.
