The U.S. Court of International Trade struck down most of President Donald Trump’s broad tariff orders this Wednesday. The judges declared Trump exceeded his legal powers by imposing sweeping import duties without congressional approval.
The Constitution grants Congress authority over foreign commerce, which Trump cannot override using emergency powers, the court concluded.
This decision removes the legal foundation for many tariffs Trump implemented using the International Emergency Economic Powers Act.
The court stated this law only allows action during actual emergencies, not to reshape trade policy based on deficits. Trump’s administration must now issue new orders aligning with the court’s ruling within ten days.
Financial markets responded quickly, with the U.S. dollar strengthening against major currencies like the euro and yen. Wall Street futures climbed while Asian markets also saw a jump following the court’s sweeping rejection of Trump’s tariff plan.
The court’s ruling came after lawsuits filed by five small businesses and twelve U.S. states, including Oregon. Oregon Attorney General Dan Rayfield called the tariffs unlawful and economically damaging.
The affected businesses, from wine importers to educational kit makers, argued tariffs disrupted supply chains and pricing strategies.
Court limits Trump’s economic emergency powers
Trump claimed his tariffs were justified by a national emergency due to America’s $1.2 trillion goods trade deficit. His administration imposed a flat 10% tariff on all imports, increasing rates for countries like China.
Those country-specific rates were paused after one week, but the general tariff remained active. Legal experts said Trump’s use of emergency powers for economic policy marks a historic shift.
Although the ruling abolishes general tariffs under IEEPA, it spares other targeted tariffs on industries such as automotive and steel. Trump immediately appealed the ruling, maintaining unelected judges have no business dictating America’s nation-level economic actions.
The ruling injects uncertainty in current talks with China, the EU, and other countries, possibly compelling president to seek alternative strategies in the talks.
