Courts Challenge Trump’s Emergency Tariff Powers Expansion

30 May at 11:30 pm

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Courts Challenge Trump’s Emergency Tariff Powers Expansion \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ President Trump’s push to reshape U.S. trade policy through sweeping tariffs has triggered market instability and legal battles. Courts recently blocked his emergency tariff powers under IEEPA, questioning his authority. Meanwhile, Congress considers reasserting control over trade duties.

Quick Looks

Policy Shift: Trump returned aiming to overhaul U.S. trade with sweeping tariffs
Market Impact: Tariff announcements caused volatility, uncertainty for businesses and consumers
Legal Pushback: Court rules Trump exceeded power under emergency economic law
Key Laws Invoked: Section 232, Section 301, IEEPA, Trade Acts of 1974 and 1930
Congressional Role: Bipartisan bill proposed to check presidential tariff powers
Alternative Tools: Other trade laws allow limited, regulated tariff action
Tariff Revenue: Estimated $40–$60 billion raised, possibly refundable
Business Outlook: Uncertainty remains amid shifting policies and pending appeals

Deep Look

When President Donald Trump returned to the White House in January, he wasted no time reigniting one of his most controversial economic agendas: tariffs. Determined to protect American industry and reduce reliance on foreign products, Trump set about constructing what he called a “tariff wall” — a sweeping series of import taxes aimed at reshaping the U.S. economy and reversing decades of globalization.

This aggressive approach has led to an explosion of tariff activity. But with that has come financial market instability, business uncertainty, and now, legal barriers. What began as a campaign to revitalize U.S. manufacturing has devolved into a complex legal and constitutional showdown over the limits of executive power.

Trump’s Tariff Playbook: A Pattern of Shock and Shift

Trump’s strategy has been erratic and high-impact. Announcements of new tariffs are often followed by suspensions, renegotiations, or abrupt changes in targets. Businesses that rely on global supply chains have found themselves whipsawed by the volatility. With each policy shift, corporate leaders are left guessing about future costs, while economists warn that inflationary pressures and reduced investment could stifle economic growth.

Trump maintains that tariffs are a tool to restore economic sovereignty. He argues that taxing imports will compel companies to bring factories and jobs back to the U.S., protect national security interests, and generate billions in revenue for the Treasury. However, critics see something far less effective: a populist strategy built on trade disruption, lacking legal rigor and long-term viability.

Can the President Unilaterally Impose Tariffs?

At the heart of the debate is a fundamental constitutional issue: the power to tax. The U.S. Constitution assigns this authority to Congress, including the imposition of tariffs. Over the past century, however, Congress has delegated some of this power to the executive branch through legislation — but with limits.

Trump initially relied on Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs when imports are deemed a threat to national security. Under this authority, Trump levied duties on steel and aluminum during his first term, and later extended them to automobiles and auto parts.

He also used Section 301 of the Trade Act of 1974, which allows the president to impose tariffs on countries found to be engaging in unfair trade practices — usually after an investigation by the U.S. Trade Representative. This was the legal foundation for Trump’s high-profile trade war with China, targeting what he described as Beijing’s theft of U.S. technology and intellectual property.

But upon returning to office in 2025, Trump signaled impatience with the time-consuming investigations these laws require. Seeking greater autonomy, he turned to the International Emergency Economic Powers Act (IEEPA) of 1977 — a law designed to give presidents authority to regulate economic transactions during a national emergency. Trump argued that immigration surges, drug trafficking, and America’s chronic trade deficits qualified as emergencies, giving him free rein to impose tariffs.

In February, he declared an emergency based on illegal immigration and drug flow and imposed tariffs on Mexico, Canada, and China. A month later, he declared America’s trade deficits an emergency and expanded the tariffs globally.

Legal Challenges Mount — and Deliver a Blow

This unprecedented use of IEEPA prompted immediate backlash. At least seven lawsuits were filed challenging Trump’s interpretation of the law. On Wednesday, the U.S. Court of International Trade delivered a landmark ruling: the president had overstepped his authority.

The court concluded that IEEPA does not permit broad-based global tariffs, nor do trade deficits or immigration flows meet the criteria for a national emergency under the act. Furthermore, the judges ruled that the tariffs did not effectively address the problems the president cited. Despite the ruling, the government is appealing, and a federal appeals court has temporarily allowed tariff collection to continue.

Legal scholars note the significance of the decision: while presidents can be granted temporary tariff authority, they cannot bypass congressional oversight indefinitely. The court reaffirmed that executive power must operate within the framework Congress establishes.

Congress Reconsiders Its Role

In response, some lawmakers are pushing to reassert congressional control over trade policy. Senators Chuck Grassley (R-IA) and Maria Cantwell (D-WA) introduced legislation that would force presidents to justify new tariffs and obtain congressional approval within 60 days. Without approval, the tariffs would expire.

Though bipartisan in nature, the bill faces long odds. Many Republican lawmakers remain aligned with Trump, and any legislation limiting presidential power would likely face a veto. Still, the effort signals growing discomfort with unilateral tariff policies that lack transparency or accountability.

Can Trump Use Other Legal Tools?

Yes, but the options are more limited and procedurally complex.

Section 122 of the 1974 Trade Act permits temporary tariffs (up to 15%) for 150 days to address balance-of-payment issues. It was mentioned by the court as a more appropriate tool for addressing trade deficits.
Section 338 of the 1930 Tariff Act allows up to 50% tariffs on countries that discriminate against U.S. imports. Notably, it does not require a government investigation.
Section 201 of the 1974 Trade Act permits tariffs after demonstrating that imports have seriously injured a U.S. industry. It was used for solar panel tariffs in 2018.

These laws emphasize that any use of trade policy tools must be rooted in specific statutory authority. The court’s ruling underscores that even broad executive powers have legal boundaries.

Where Does the Tariff Money Go?

If the IEEPA-based tariffs are ultimately ruled illegal, the revenue — paid by U.S. importers — would be refunded. If upheld, the funds are deposited into the U.S. Treasury, much like other federal taxes.

The financial impact has been significant. Tariff revenue has surged in recent months. By May, the Treasury was on track to collect $22 billion — up from $6 billion in February, before the latest wave of duties. Analysts at Nomura Securities estimate that the contested tariffs have generated between $40 billion and $60 billion to date.

But this revenue comes at a cost. Tariffs function as a tax on imports, raising costs for businesses and, ultimately, consumers. They can distort global supply chains and reduce competitiveness. Some companies have halted hiring or delayed expansion, uncertain about future trade policy.

The Road Ahead: Uncertainty and Conflict

Trump’s tariff revival is emblematic of his combative, go-it-alone approach to trade. While it energizes a segment of his political base, it has left economists, businesses, and legal experts deeply concerned. With ongoing appeals, proposed congressional reforms, and global reactions still unfolding, the future of U.S. trade policy hangs in the balance.

As one legal expert told The Associated Press, “Presidents can have discretion, but not a blank check. And the courts are beginning to say no.”