Court Blocks Trump’s Emergency Tariff Plan Nationwide

28 May at 11:18 pm

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Court Blocks Trump’s Emergency Tariff Plan Nationwide \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ A federal court has blocked Donald Trump’s sweeping global tariffs, ruling he overstepped his authority. The court found his use of emergency powers under IEEPA unconstitutional and unjustified. The decision disrupts Trump’s trade strategy and invites further legal scrutiny.

Quick Looks

Court rules Trump overreached with tariffs via emergency powers.
Tariffs impacted nearly all U.S. trading partners, including China.
Decision challenges use of IEEPA to declare economic emergency.
Legal blow casts doubt on Trump’s aggressive trade agenda.
Court leaves intact other tariffs based on different statutes.
Appeals are likely, with potential to reach the Supreme Court.
Critics say the ruling affirms congressional power over trade.
Small businesses and U.S. states led the successful lawsuits.
Decision could delay global trade negotiations with U.S.
Analysts say ruling undermines executive overreach in trade law.

Deep Look

Federal Court Rejects Trump’s Sweeping Global Tariffs as Abuse of Emergency Powers

In a landmark decision with sweeping implications for U.S. trade policy, a federal court in New York struck down President Donald Trump’s latest and most ambitious round of global tariffs, ruling that he lacked the legal authority to impose them unilaterally using emergency powers.

The three-judge panel from the U.S. Court of International Trade concluded that Trump overstepped his constitutional and statutory bounds by invoking the 1977 International Emergency Economic Powers Act (IEEPA) to declare a “national emergency” based on long-standing trade deficits. The decision is a major rebuke of Trump’s effort to remake U.S. trade policy by executive fiat, and it has created new legal uncertainty around his broader economic agenda.

Sweeping Tariffs Declared Unconstitutional

Trump’s order imposed up to 50% tariffs on countries with which the U.S. runs a trade deficit, and 10% baseline tariffs on nearly all other imports. He justified the tariffs by declaring trade imbalances a national emergency—despite the fact that the U.S. has consistently run deficits for nearly five decades.

While the administration claimed authority under IEEPA, the court found that Trump’s actions did not meet the legal standard for an emergency and that his broad, discretionary imposition of tariffs violated the Constitution’s assignment of tax powers to Congress.

“The use of emergency powers in this context is simply a political shortcut to bypass Congress,” the court said in its ruling, which combined lawsuits filed by five small businesses and 12 U.S. states. “Longstanding trade deficits, while economically concerning, do not constitute a sudden national emergency that justifies the suspension of trade norms.”

The ruling immediately halts Trump’s most recent tariffs, including those against China, Canada, Mexico, and the European Union. However, earlier tariffs on steel, aluminum, and automobiles—implemented under a different statute requiring Commerce Department review—remain in place.

Emergency Powers or Executive Overreach?

This case is the most significant legal test of IEEPA’s application in trade since its passage. The Trump administration argued that the law gives presidents wide latitude to act unilaterally during perceived economic threats. In its defense, the administration cited President Richard Nixon’s emergency economic actions in 1971, which were enacted under the earlier 1917 Trading With the Enemy Act.

But the court drew a clear distinction. Nixon’s tariffs came amid an actual financial crisis involving currency devaluation and the collapse of the gold standard. Trump’s use of IEEPA, by contrast, rested on chronic trade deficits and border concerns involving immigration and drugs—issues the court said were neither sudden nor directly related to international commerce.

Cornell trade policy professor Eswar Prasad hailed the decision as a pivotal moment. “The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power,” he said. “It reinforces the constitutional role of Congress in matters of taxation and trade.”

Economic and Political Fallout

The court’s decision not only disrupts the administration’s immediate trade plans but may also stall ongoing negotiations with global partners. Trump had suspended reciprocal tariffs for 90 days to give countries time to lower trade barriers. Now, with those tariffs halted by court order, countries may hold off on further negotiations until the legal situation is clarified.

“This throws the president’s trade policy into turmoil,” said Wendy Cutler, former U.S. trade official and vice president of the Asia Society Policy Institute. “It removes the pressure that tariffs created during the pause period and will likely delay meaningful progress on bilateral agreements.”

In the short term, companies may rush to move goods into the U.S. ahead of a potential appeals ruling. Meanwhile, supply chain strategists are reassessing risks as the administration contemplates how to proceed.

Trump could still appeal the decision to the U.S. Court of Appeals for the Federal Circuit and eventually the Supreme Court. Many legal experts believe the case is likely headed there.

Limited Alternatives for Tariff Authority

The court noted that Trump retains some trade authority under the Trade Act of 1974. However, that law only permits a 15% tariff for 150 days and applies exclusively to countries with which the U.S. runs a significant trade deficit. It also requires a more stringent process than Trump employed under IEEPA.

This limitation poses a strategic dilemma for the administration. Any future tariff plans would have to conform to narrower guidelines or risk similar legal pushback.

Despite the setback, Trump’s base continues to support his combative approach to trade. His campaign rhetoric has long focused on “economic sovereignty” and punishing countries that exploit U.S. markets. But this ruling may force a strategic recalibration.

A Turning Point in Trade Power

This court decision is also a broader signal that the judiciary is prepared to reassert limits on executive power, particularly in areas where Congress has historically ceded authority. For decades, lawmakers have allowed presidents to shape trade policy with relatively little oversight, a trend that Trump took to its outer edge.

Now, with bipartisan concern growing over unchecked executive action, the court’s decision may serve as a precedent for rebalancing trade authority back toward Congress.

“The system worked exactly as it should,” said one attorney involved in the case. “The courts held the executive branch accountable, and they reinforced the importance of due process in economic policymaking.”

As the legal battle continues, the ruling marks a turning point in how U.S. trade policy is crafted—and by whom.