A U.S. Trade Court blocked most of President Donald Trump’s tariffs in a sweeping ruling on Wednesday that found the president overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners.
The Court of International Trade said the U.S. Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president’s emergency powers to safeguard the U.S. economy.
“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January. “That use is impermissible not because it is unwise or ineffective, but because it is federal law which does not allow it.”
Financial markets cheered the ruling. The U.S. dollar rallied following the court’s order, surging against currencies such as the euro, yen, and the Swiss franc in particular. Wall Street futures rose, and equities across Asia also jumped. The judges also ordered the Trump administration to issue new orders reflecting the permanent injunction within 10 days.
The Trump administration, minutes later, filed a notice of appeal and questioned the authority of the court.
The court invalidated with immediate effect all of Trump’s orders on tariffs since January that were rooted in the International Emergency Economic Powers Act (IEEPA), a law meant to address unusual and extraordinary threats during a national emergency. The court was not asked to address some industry-specific tariffs Trump has issued on automobiles, steel, and aluminium, using a different statute.
The decisions of the Manhattan-based Court of International Trade can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C. and ultimately the U.S. Supreme Court
Trump has made charging U.S. importers tariffs on goods from foreign countries the central policy of his ongoing trade wars, which have severely disrupted global trade flows and roiled financial markets.
Companies of all sizes have been whipsawed by Trump’s swift imposition of tariffs and sudden reversals as they seek to manage supply chains, production, staffing, and prices.
BA White House spokesperson said U.S. trade deficits constituted “a national emergency that has decimated American communities, left our workers behind, and weakened our defence industrial base, facts that the court did not dispute.” “It is not for unelected judges to decide how to properly address a national emergency,” Kush Desai said.
The ruling blows a giant hole through Trump’s strategy to use steep tariffs to wring concessions from trading partners, creating deep uncertainty around multiple simultaneous negotiations with the European Union, China, and many other countries.
Analysts at Goldman Sachs noted the order doesn’t block sector-specific levies, and there are other legal avenues for Trump to impose across-the-board and country-specific tariffs.
Trump promised Americans the tariffs would draw manufacturing jobs back to U.S. shores and shrink the $1.2 trillion U.S. goods trade deficit.
The ruling came in a pair of lawsuits filed by the Liberty Justice Centre and 12 U.S. states, arguing the tariffs would hurt their ability to do business.
Oregon Attorney General Dan Rayfield called Trump’s tariffs unlawful, reckless and economically devastating, saying the ruling reaffirms that trade decisions can’t be made on the president’s
