In a landmark decision, the U.S. Court of International Trade has struck down former President Donald Trump’s sweeping global tariff policy, ruling that the White House overstepped its authority. The verdict delivers a significant blow to a cornerstone of Trump’s economic strategy.
Court Ruling: Presidential Power Checked
The court determined that the 1977 International Emergency Economic Powers Act (IEEPA), which Trump cited as justification, does not grant the president unilateral power to impose broad tariffs. The panel emphasized that the U.S. Constitution vests exclusive authority to regulate foreign trade in Congress.
The ruling halts tariff increases on imports from nearly every global trading partner, including a separate set of levies on China, Mexico, and Canada, imposed over concerns about drugs and illegal immigration. However, tariffs on specific goods like steel, aluminum, and cars—covered under different laws—remain unaffected.
Who Brought the Lawsuit?
Two major legal challenges prompted the decision:
Liberty Justice Center, representing small U.S. importers affected by the tariffs.
A coalition of U.S. states, led by New York, that argued the administration exceeded its legal limits.
This marks the first significant judicial rebuke of Trump’s so-called “Liberation Day” tariffs.
Reactions and Market Impact
The White House swiftly condemned the ruling and announced plans to appeal. “It is not for unelected judges to decide how to address a national emergency,” said deputy press secretary Kush Desai.
New York Attorney General Letitia James praised the decision, saying, “No president has the power to single-handedly raise taxes at will.”
Markets responded positively. Asian stocks rose, U.S. futures climbed, and the dollar strengthened against safe-haven currencies like the yen and Swiss franc. European markets opened steady.
What’s Next?
The administration has 10 days to begin the process of suspending the tariffs, though many were already paused. If the appeal fails, U.S. Customs and Border Protection (CBP) will issue formal instructions to cease collection, and affected businesses could receive tariff refunds with interest.
However, former CBP official John Leonard noted that tariffs remain in effect during the appeals process, and border procedures will not immediately change.
Analyst Stephen Innes of SPI Asset Management remarked, “The Oval Office isn’t a trading desk, and the Constitution isn’t a blank cheque,” noting investor relief after weeks of volatility.
Backdrop: How We Got Here
Trump introduced the global tariffs on April 2, applying a base 10% rate on most imports, with steeper penalties for nations like China, Canada, the UK, and EU. His administration claimed the move would bolster U.S. manufacturing and jobs.
What followed was international backlash, disrupted markets, and escalating trade wars—especially with China, leading to tit-for-tat tariff hikes peaking at 145% on Chinese goods and 125% on U.S. exports.
Temporary truces were eventually reached, including reduced tariffs between the U.S. and China, and new bilateral deals with the UK.
Implications for the UK-US Trade Deal
Earlier this month, the U.S. and UK agreed to reduce tariffs on key exports such as steel, cars, and aluminum. This part of the deal remains unaffected by the court ruling.
However, the broader 10% blanket tariff on most UK goods is now in question, casting uncertainty on the full implementation of the trade agreement.
The UK government has not officially commented on the ruling but confirmed efforts are ongoing to ensure British businesses benefit from the deal swiftly.
Credit: BBC
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