New York — In a major legal setback for former President Donald Trump, a U.S. federal court has ruled that his wide-ranging tariff plan overstepped presidential authority and violated legal boundaries. The decision effectively halts the implementation of the bulk of the tariffs, many of which targeted imports from key U.S. trade partners, including China, Mexico, and Canada.
According to CNN, the U.S. Court of International Trade in Manhattan delivered the ruling, declaring that the tariffs Trump attempted to impose under the International Emergency Economic Powers Act (IEEPA) were unlawful. The court stated that the IEEPA does not explicitly authorize a president to levy tariffs and that doing so would represent an unconstitutional transfer of legislative powers from Congress to the executive branch.
“All of the global, retaliatory, and trafficking tariff orders are not authorized by IEEPA,” the court said in its unanimous opinion. “The global and retaliatory tariff orders exceed the President’s IEEPA-granted authority to regulate imports via tariffs. The trafficking tariffs also fail because they do not directly address the threats outlined in the orders.”
The case was brought forward by the Liberty Justice Center on behalf of small businesses, including VOS Selections, a wine importer that claimed significant financial losses due to the tariffs. A separate challenge from twelve Democrat-led states was also resolved as part of the same ruling.
The tariffs in question included a general 10% levy on most imports, 25% on selected Mexican and Canadian products, and 30% on goods from China. However, tariffs on steel, aluminum, and automobiles — implemented under the U.S. Trade Expansion Act — remain unaffected by the decision.
While the Trump administration has already filed an appeal, the future of these tariff measures remains uncertain. The administration has ten days to respond to the court’s permanent injunction. If the ruling is upheld, the majority of Trump’s tariff initiatives could be dismantled before any long-term trade deals are finalized with the affected nations.
The ruling has already impacted financial markets. U.S. stock index futures rose significantly in after-hours trading, as investors welcomed the news that the controversial tariffs might be rolled back.
Trump initially announced the tariffs on April 2 as part of his “reciprocal trade” campaign, citing economic threats and unfair practices by foreign nations. However, he suspended their implementation for 90 days on April 9, though a uniform 10% duty on most imported goods remained in place. With this court decision, the legality and future of Trump’s tariff agenda now hang in the balance, as the appeals process begins and stakeholders from both the public and private sectors closely monitor developments.
