A significant part of President Donald Trump’s broad tariff regime has been invalidated by the US Court of International Trade, undermining the administration’s invocation of emergency powers to fight a global trade war. In a decision handed down on Wednesday, a panel of three judges ruled that Trump overstepped his authority under the 1977 International Emergency Economic Powers Act (IEEPA), which he had used to impose sweeping tariffs on products from tens of nations, the Washington Post stated.
The court held that IEEPA does not allow the president to “impose unlimited tariffs on products from almost every nation in the world,” dismissing Trump’s legal rationale for a worldwide tariff policy that had shaken markets and tested international alliances.
Which tariffs have been suspended
The ruling freezes the 10 percent “reciprocal” tariffs Trump declared in April on imports from over 75 nations. It also stops the 25 percent levied on Mexican and Canadian products on the grounds of stemming illegal immigration and narcotics trafficking, and the 20 percent tariffs on Chinese products associated with fentanyl-related charges.
Notably, the ruling also appears to halt Trump’s order to revoke duty-free status for small-value shipments from China—a move that had threatened low-cost e-commerce giants like Shein and Temu. However, the exact implementation status of this rollback remains unclear.
Which tariffs remain in place
Tariffs imposed other than under emergency powers—such as those on aluminium, steel, and cars—are not touched. These were imposed under a 1962 trade law permitting US Commerce Department national security reviews and are likely to stand unless challenged independently.
Why the court intervened
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The lawsuit was brought by Democratic-state and impacted business plaintiffs alleging Trump abused emergency powers for economic coercion. The court ruled in favour of the plaintiffs, declaring Trump’s broad interpretation of IEEPA was a violation of constitutional restraints on executive power. Legal experts consider this decision to be a potential precedent to constrain such use of emergency powers for economic action in the future.
White House response and next steps
The White House has indicated that it would appeal. The US Justice Department indicated a few minutes after the ruling had been handed down that it would appeal the decision in the US Court of Appeals for the Federal Circuit. Experts indicate that an appeal will probably not reverse the decision, but warn that Trump might consider other avenues of law to reinstate tariffs.
This isn’t an absolute win,” University of Toronto economist Joseph Steinberg added. “It will be appealed.” But trade lawyer Michael J. Lowell thinks the court’s reasoning is solid and will
withstand appeals: “I think this will hold up. I think the administration understands that it will hold up.”
Investor and business reaction
Markets also responded positively to the news, and major indexes went up during after-hours trading. The rollback of tariffs is set to relieve import expenses for manufacturers and retailers, who have warned of higher prices and supply chain disruptions due to Trump’s trade policies.
Role of Court of International Trade
The New York-based US Court of International Trade hears cases related to customs and trade disputes. Judges hold lifetime appointments, and executive power decisions usually go before a panel of three judges. Decisions by this court can be appealed to the Federal Circuit and, further, to the US Supreme Court.