A federal court has dealt a major blow to former President Donald Trump’s trade policies, ruling that he did not have the legal authority to impose broad global tariffs under a decades-old economic emergency law.
In a decision issued Wednesday, the U.S. Court of International Trade struck down tariffs Trump had implemented using the International Emergency Economic Powers Act (IEEPA), a 1977 law historically used for national security threats, not for economic trade measures.
Why it matters: The ruling effectively nullifies a large portion of Trump’s tariff regime, which had reshaped international trade since he took office. It may also stall the momentum of the administration’s broader trade war by blocking most categories of tariffs the former president enacted through executive orders.
The court’s decision came in response to two lawsuits filed by coalitions of businesses and state governments. These plaintiffs argued that Trump’s use of the IEEPA to set import duties bypassed Congress, which holds the constitutional authority over tariff policy.
In its ruling, the court issued a summary judgment that invalidated the tariffs, stating that the IEEPA does not authorize the president to impose such far-reaching trade measures.
“The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 delegates these powers to the President in the form of authority to impose unlimited tariffs on goods from nearly every country in the world,” the three-judge panel wrote. “The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
The panel’s decision does not affect tariffs enacted under Section 232, a different legal statute Trump used to target specific imports such as steel, aluminum, and autos.
The ruling comes from a relatively low-profile but powerful federal court that specializes in trade disputes. The panel that issued the decision included judges appointed by Presidents Ronald Reagan, Barack Obama, and Donald Trump.
Trump’s legal team quickly filed a notice of appeal following the judgment, setting the stage for what could become a drawn-out legal battle in higher courts.
Reacting to the ruling, the White House pushed back. “It is not for unelected judges to decide how to properly address a national emergency,” said White House spokesperson Kush Desai. “President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness.”
Trump ally and White House Deputy Chief of Staff Stephen Miller took to social media, calling the decision a “judicial coup.”
On the opposing side, state officials leading the lawsuit praised the outcome. Oregon Attorney General Dan Rayfield said the case was about constitutional limits. “The Constitution doesn’t give any president unchecked authority to upend the economy,” he said. “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim.”
New York Attorney General Letitia James, who also joined the suit, added that the law is clear. “No president has the power to single-handedly raise taxes whenever they like,” she said. “These tariffs are a massive tax hike on working families and American businesses. If allowed to continue, they would have led to more inflation, widespread economic damage, and job losses.”
In a notable move, the court bypassed the plaintiffs’ request for an injunction and instead issued a full judgment, declaring the tariff orders invalid. “The challenged Tariff Orders will be vacated and their operation permanently enjoined,” the court stated.
The ruling may trigger immediate uncertainty for U.S. ports and importers, as customs officials determine which tariffs remain enforceable. Analysts warn that the disruption could have ripple effects on global trade and future negotiations.
Scott Lincicome of the Cato Institute noted that the decision shifts leverage back to foreign governments in ongoing trade discussions. “It gives foreign governments — once compelled to negotiate new terms of the trade agreements the Trump administration broke — significant new leverage,” he said.
As the appeal moves forward, both markets and international partners will be watching closely to see how the administration responds.
