In a major legal blow to former President Donald Trump, the U.S. Court of International Trade has ruled that his recently imposed global tariffs—known as the “Liberation Day” tariffs—are unconstitutional. The decision, delivered by a unanimous three-judge panel, immediately halts the enforcement of the 10% tariffs on imports from major trading partners, including Canada, Mexico, and China.
The court concluded that Trump had overstepped his presidential authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to justify the tariffs. The ruling stated that the law does not give the president unlimited powers to regulate trade without a genuine national emergency, something the court determined was lacking in this case.
Trump’s administration argued the tariffs were necessary to address trade imbalances and curb issues like illegal immigration and drug trafficking. However, the court found these reasons insufficient under the IEEPA, which requires an “unusual and extraordinary threat” to national security.
The decision has been welcomed by business owners and importers who had filed legal challenges against the tariffs, citing economic hardship and market instability. Markets reacted positively, with Asian shares and U.S. futures rising after news of the ruling broke.
Legal experts view the decision as a significant check on executive power and a reaffirmation of Congress’s role in shaping trade policy. While the Trump team has indicated plans to appeal, the court’s ruling sets a precedent that may impact future presidential attempts to unilaterally impose broad trade restrictions.
It’s important to note that this decision only applies to the tariffs enacted under the IEEPA. Other tariffs put in place under different trade laws remain unaffected for now.