A federal court has delivered a major legal defeat to Donald Trump, ruling that he does not have unlimited power to impose tariffs under emergency law — a move that strikes down key parts of his trade agenda and blocks a wave of tariffs he announced earlier this year.
In a sweeping and unanimous decision, the U.S. Court of International Trade said Trump misused the International Emergency Economic Powers Act of 1977 (IEEPA) when he tried to use it as a legal weapon in his trade war.
“An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government,” the judges wrote in their ruling.
The court said the IEEPA doesn’t give the president free rein to place tariffs on nearly every country based on vague claims of economic threat or national emergency. “Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional,” the ruling continued.
The decision blocks Trump’s April 2 “Liberation Day” tariffs and a series of other trade orders going back to February. Those orders targeted major U.S. trade partners, including Canada, Mexico, and China, and triggered market volatility, dropping stocks and driving up Treasury yields.
Trump tried to justify the sweeping tariffs by declaring a national emergency, citing trade deficits and international drug cartels. The court rejected that reasoning.
The ruling came from a three-judge panel that included Judge Timothy Reif (a Trump appointee), Judge Jane Restani (appointed by Reagan), and Judge Gary Katzmann (appointed by Obama) — showing rare bipartisan unity in limiting presidential power.
The Trump administration quickly appealed the decision Wednesday night.
Two lawsuits challenged the tariffs. One was brought by small businesses hit hard by the import taxes. The other came from Democratic state attorneys general, led by Oregon, who argued Trump had gone far beyond the limits of his legal authority.
Trump’s legal team tried to argue the case wasn’t for the courts to decide, claiming it was a “political question.” But the judges didn’t buy it.
“This reliance on the political question doctrine is misplaced,” the court wrote.
