A second federal court has stepped in to nullify Donald Trump’s sweeping use of tariffs—this time siding with two Illinois toy companies and ruling that the president overstepped his authority.
On May 29, U.S. District Judge Rudolph Contreras ruled that the federal government cannot collect tariffs from Learning Resources and hand2mind, both based in Vernon Hills, Illinois, while their lawsuit moves forward. The judge gave the government two weeks to appeal.
This decision follows a May 28 ruling from a three-judge panel at the Court of International Trade that struck down Trump’s tariffs, calling them unlawful. Both courts ruled that Trump did not have the power to impose the tariffs under the 1977 International Emergency Economic Powers Act (IEEPA).
“The statute does not authorize the President to impose the tariffs,” Contreras wrote in his two-page order.
The toy companies import products like Spike the Fine Motor Hedgehog, Kanoodle, and the Peekaboo Learning Farm from countries including China, Taiwan, Vietnam, Korea, Thailand, and India. They employ about 500 workers across Illinois, California, and New York.
They argued in court that the tariffs could ruin their businesses after barely surviving the COVID-19 pandemic.
“That crushing burden is felt most immediately and acutely by this country’s small and mid-size businesses, including Plaintiffs,” the lawsuit said.
Trump’s legal team argued that the IEEPA gives the president broad power to “regulate importation,” including setting tariffs, especially in national emergencies. Justice Department attorney Brett Shumate warned that blocking Trump’s tariffs could harm U.S. foreign policy and weaken presidential power.
“If the court were to conclude otherwise, granting an injunction would kneecap the president on the world stage, cripple his ability to negotiate trade deals and imperil the government’s ability to respond to future national emergencies,” Shumate said at a May 27 hearing. “Granting any form of relief against the president under IEEPA tariffs would be catastrophic for our national security and foreign policy.”
But both rulings have now made it clear: Trump exceeded his authority. Judges from two separate courts have moved to rein in what they see as presidential overreach.
The Justice Department says it will appeal.
