Federal Court Halts Trump’s Use of Emergency Powers to Impose Tariffs, Casting Doubt on Key Trade Policies
In a big legal setback for President Donald Trump, a federal court on Wednesday blocked his attempt to use emergency powers to impose broad tariffs on imports—an approach that has become central to his economic and trade policies.
The decision, delivered by a three-judge panel from the U.S. Court of International Trade in New York, challenges the legal foundation of Trump’s aggressive trade measures, which have unsettled global markets, strained international relations, and fueled inflation fears.
The ruling came in response to multiple lawsuits claiming that Trump had exceeded his executive authority under the International Emergency Economic Powers Act (IEEPA), a 1977 law typically used to regulate international financial threats, not trade deficits.
Court Rejects Use of IEEPA for Tariffs
The panel, consisting of Judges Timothy Reif (a Trump appointee), Jane Restani (appointed by Ronald Reagan), and Gary Katzman (named by Barack Obama), unanimously ruled that the president had overstepped his bounds.
They stated that the IEEPA does not provide the authority to impose tariffs as a means of addressing trade deficits, nor does it support using such levies as emergency responses to longstanding economic trends.
“The worldwide and retaliatory tariff orders exceed any authority granted to the president by IEEPA to regulate importation using tariffs,” the court noted in its decision.
Legal and Political Implications
The decision casts serious doubt on one of Trump’s most controversial and defining policy tools in his second term. Although the administration has already filed an appeal, legal experts expect the case to reach the Supreme Court for a final ruling.
For now, Trump may lose his ability to unilaterally impose tariffs using emergency powers—a tactic he had used to pressure foreign governments into favorable trade deals and to claim progress on bringing jobs back to the U.S. The court’s rejection also undermines the administration’s legal argument that longstanding trade deficits represent a national emergency.
Limited Powers Still Available
While this ruling blocks the use of IEEPA to impose sweeping tariffs, the court did acknowledge that under Section 122 of the Trade Act of 1974, the president retains limited authority to impose temporary tariffs—up to 15% for 150 days—on countries with which the U.S. has significant trade imbalances.
However, any broader, long-term imposition of tariffs will now require explicit congressional approval, curbing Trump’s unilateral control over trade policy.
White House Reacts
White House spokesperson Kush Desai defended the administration’s use of tariffs, arguing that trade deficits have “decimated American communities, left our workers behind, and weakened our defense industrial base”—a claim the court did not dispute in its ruling.
He added that the administration remains “committed to using every lever of executive power to address this crisis and restore American greatness.”
Economic and Political Fallout
Trump’s tariff policies—most notably levies on imports from Canada, Mexico, and China—were introduced to counteract trade deficits, combat illegal immigration, and stem the flow of synthetic opioids.
These actions rattled global financial markets and prompted widespread concern from economists, who warned of rising consumer costs and disrupted supply chains.
Though the long-term economic impact of the tariffs has been limited so far, analysts say they contributed to rising prices on key consumer goods, such as groceries and automobiles.
Lawsuits from Businesses and States
The court’s decision stems from multiple lawsuits, including one brought by small businesses like VOS Selections, a wine importer whose owner said the tariffs jeopardized his company’s survival.
A coalition of 12 states, led by Oregon, also filed suit against the administration.
Oregon Attorney General Dan Rayfield welcomed the court’s decision, stating, “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim.”
U.S. Senator Ron Wyden, a Democrat from Oregon and ranking member of the Senate Finance Committee, echoed this sentiment, criticizing the tariffs for driving up prices, threatening supply chains, and hurting American businesses both large and small.
What Comes Next?
As the legal battle moves to higher courts, the future of Trump’s tariff strategy hangs in the balance. The administration’s appeal could result in a prolonged legal fight, potentially ending in a landmark Supreme Court decision that will shape the limits of presidential power in trade policy for years to come.
