Donald Trump’s trade war strategy just took a major hit, as his tariffs were blocked by federal judges.
A U.S. federal court has ruled that the former president overreached by imposing sweeping tariffs on imported goods using emergency powers, specifically, the International Emergency Economic Powers Act (IEEPA). The court called it out plainly: Trump’s use of IEEPA to issue broad tariffs was unconstitutional and outside presidential authority.
The Court of International Trade, in a unanimous decision from a three-judge panel, issued a permanent nationwide injunction that blocks most of Trump’s IEEPA-based tariff orders, including the controversial plan announced in April for a 10% blanket tariff on nearly all imports. Tariffs aimed at specific countries, like 54% on Chinese goods, were also challenged.
So, what does this ruling actually do? It immediately nullifies all orders issued under IEEPA since January, including those targeting countries with high trade deficits and blanket tariffs across the board. It does not, however, touch industry-specific tariffs, like those placed on steel, aluminum, solar panels, or vehicles, which are issued under different trade laws (like Section 232 of the Trade Expansion Act).
The court emphasized that while IEEPA allows the president to freeze assets and restrict financial transactions during national emergencies, it does not authorize the imposition of tariffs. This was a sharp rebuke of how Trump attempted to leverage emergency powers to reshape U.S. trade policy unilaterally.
The administration has already filed a notice of appeal, likely taking this legal battle to the U.S. Court of Appeals for the Federal Circuit and possibly even the Supreme Court. But for now, the injunction stands.
The ruling came after a pair of lawsuits filed earlier this year. One came from the Liberty Justice Center, representing five small businesses:
- A New York wine importer
- A Virginia educational kit supplier
- An Oregon-based technology accessory company
- And others whose operations were severely impacted by the sudden tariff hikes.
The second suit was brought by 12 U.S. states, led by Oregon Attorney General Dan Rayfield, who called Trump’s actions a “reckless and unlawful abuse of power” that would devastate the economy. In his words:
“Trade law is not something the President gets to ignore. It is Congress’s job, not the President’s, to impose tariffs.”
Judge Mark A. Barnett, writing for the panel, agreed, stating:
“The trade deficit does not constitute an unusual and extraordinary threat… The President’s declaration of a national emergency and the associated imposition of tariffs are not supported by IEEPA.”
The ruling also compels the government to issue corrective orders within 10 days. In other words, the Trump administration must formally undo its tariff orders as they stand, at least unless an appeals court steps in with a stay.
The White House, unsurprisingly, pushed back hard. Kush Desai, a senior Trump administration spokesperson, responded:
“It’s not for unelected judges to decide how to address a national emergency… America’s massive trade deficit has decimated our industrial base and threatens our national security.”
He insisted the President was well within his rights to act and would continue to do so.
Despite the political firestorm, Wall Street cheered the decision.
- Dow futures and S&P 500 futures climbed.
- The U.S. dollar surged, especially against the euro, yen, and Swiss franc.
- Asian markets rallied, with equities across Japan, Hong Kong, and Taiwan gaining ground.
This investor optimism reflects relief from the uncertainty and chaos Trump’s broad tariffs introduced into global trade flows. Businesses hit hardest by these tariffs, especially importers and small companies, now have legal breathing room.
For context, Trump’s now-blocked April plan was part of a broader strategy to pressure countries with large trade surpluses, including China, Germany, Japan, and Mexico. The idea was that a universal tariff floor would create negotiating leverage. However, this move instantly triggered outcry from economists, trade partners, and lawmakers, including some Republicans, warning it could ignite inflation and disrupt global supply chains.
This court decision doesn’t mean all of Trump’s trade tools are off the table. Tariffs enacted under laws like Section 301 (used against China) or Section 232 (for national security) are untouched, for now. But it sends a crystal-clear message: the president cannot treat trade laws like a blank check.
In its closing, the court wrote:
“The IEEPA grants authority only within limits clearly set by Congress. To allow otherwise would upset the constitutional balance of powers.”
With at least five additional lawsuits pending against Trump’s tariff regime and appeals already in motion, the legal war over how far a president can go in reshaping U.S. trade continues.
But for now, Trump’s biggest economic weapon, blanket tariffs via emergency powers, has been stripped away.
Leo Cruz brings sharp insights into the world of politics, offering balanced reporting and analysis on the latest policies, elections, and global political events. With years of experience covering campaigns and interviewing world leaders, Leo ensures readers are always informed and engaged.
