Faith Nyasuguta
A U.S. federal court has delivered a major blow to President Donald Trump’s trade strategy, ruling that his administration overstepped its legal authority by imposing sweeping tariffs without congressional approval. The ruling halts what the president had called his “Liberation Day” tariffs, blanket duties he claimed would rescue American manufacturing and shrink the country’s long standing trade deficit.
The decision, handed down by a three-judge panel at the New York-based U.S. Court of International Trade, said the tariffs were not justified under the emergency powers Trump had invoked. Specifically, the court found that the International Emergency Economic Powers Act (IEEPA), the statute the Trump administration relied on, does not authorize the kind of across-the-board tariffs he ordered.
“President Trump’s proclamation exceeds any authority granted to him under the IEEPA to regulate importation by means of tariffs,” the court stated. The judges were careful to clarify that their decision was not about whether Trump’s policies were wise or effective, but whether they were legal. “The president’s use of tariffs may be bold or misguided, but the statute does not give him that power.”
President Trump had implemented the controversial tariffs earlier this year, levying a 10% duty on nearly all imported goods, arguing that America’s ballooning trade deficit posed a national emergency. But critics saw the move as an overreach that risked upending the global economy, and a wave of lawsuits quickly followed.
Among the first to challenge the tariffs were small business owners who said they were being crushed by the sudden cost hikes. One of them, Michael Daniels, owns VOS Selections, a New York-based wine importer. “These tariffs are wiping us out,” he said in an earlier interview. “We’ve been forced to raise prices, cut staff, and cancel orders. It’s not sustainable.”
Twelve U.S. states joined the legal fight, led by Oregon, arguing that Trump’s use of emergency powers to implement broad trade policy sidestepped constitutional checks. Oregon’s attorney general, Dan Rayfield, said after the ruling, “This reaffirms that laws matter. Trade decisions, especially ones that affect millions of Americans, can’t just be made on a president’s whim.”
The Trump administration has already vowed to appeal the decision. White House spokesperson Kush Desai said in a statement, “It is not for unelected judges to decide how to properly address a national emergency. The president acted to protect American jobs, and we will continue that fight.”
Stephen Miller, Trump’s deputy chief of staff for policy, also weighed in online, writing in a post, “The judicial coup is out of control. The people elected Trump to act, and act he did.”
Financial markets reacted swiftly to the news. The U.S. dollar rallied against the euro, yen, and Swiss franc, while stock markets in Asia posted gains. Wall Street futures also pointed to a bullish open. Analysts suggested the ruling may ease investor fears about escalating trade wars, though many remain cautious ahead of a likely Supreme Court showdown.
The legal dispute turns on whether the president can use emergency powers to bypass Congress and reshape trade policy. Trump’s team pointed to past precedents, including former President Richard Nixon’s 1971 emergency tariffs. But the court found that those situations involved more targeted actions, and that the scale of Trump’s tariffs demanded stricter legal scrutiny.
“This was not a case of national defense or economic collapse,” said legal analyst Andrea Lin. “The U.S. has run a trade deficit for decades. That’s not a sudden emergency, it’s an ongoing policy issue. And Congress, not the president, should be the one to handle it.”
The administration argued that the trade deficit amounted to an “unusual and extraordinary threat” under IEEPA’s language, citing job losses and illegal imports fueling the opioid crisis. The court rejected that view, saying the law was not intended for such a broad interpretation.
While the ruling blocks the general tariffs imposed under emergency powers, it does not affect other trade duties Trump has introduced using different statutes,such as Section 232 tariffs on steel and aluminum or Section 301 duties targeting China. Those remain in place for now, though they too have faced legal and diplomatic pressure.
Behind the headlines, many small businesses have been left reeling. For Michael Daniels and others like him, the ruling offers a glimmer of hope. “It’s not just about numbers or laws—it’s about people,” he said. “We import wine, yes, but we also employ dozens of people. We serve restaurants and communities. We need fair rules.”
Australia’s government has also voiced concern, with Trade Minister Don Farrell saying that the blanket tariffs hurt international allies. “Australian exporters were hit without justification,” he noted. “We urge the U.S. to abide by fair trade practices and reconsider the use of such blunt instruments.”
Back in Washington, the ruling has sparked debate on Capitol Hill. Several lawmakers are pushing a new Trade Review Act, which would require the president to consult Congress on any new tariffs and get approval within 60 days. Though it has bipartisan support, the bill faces stiff resistance from Trump loyalists.
For now, the administration’s next step is to appeal to the U.S. Court of Appeals for the Federal Circuit. If needed, the case could reach the Supreme Court, where a final decision may determine how much latitude presidents have to shape global trade on their own.
Trump, uncharacteristically quiet on the ruling, posted nothing about it on Truth Social. Instead, he focused on a separate lawsuit, celebrating what he called a “big win” in his legal battle with the Pulitzer Prize board. But the silence on tariffs spoke volumes. This time, the president’s favorite policy tool is on the legal chopping block.
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