U.S. Court strikes down Trump trade tariffs

A federal court in the United States has delivered a significant setback to former President Donald Trump's trade agenda by ruling that his administration overstepped its authority in imposing sweeping tariffs on global imports.

The U.S. Court of International Trade, based in Manhattan, held that the White House misapplied emergency powers when it imposed tariffs on a broad range of countries. The three-judge panel stated that the U.S. Constitution grants Congress—not the President—exclusive authority to regulate foreign trade, and that this legislative power cannot be overridden by executive actions aimed at economic protectionism.

The Trump administration quickly appealed the decision, defending its use of the International Emergency Economic Powers Act (IEEPA), a 1977 statute originally intended to respond to threats against national security. The court, however, concluded that the tariffs exceeded the legal bounds of that act.

In addition to nullifying the global tariffs, the court also blocked targeted duties placed on imports from China, Mexico, and Canada. These levies had been introduced under the Trump administration’s renewed claim of a national emergency tied to drug trafficking and illegal immigration.

Reacting to the decision, White House Deputy Press Secretary Kush Desai stated, “It is not for unelected judges to decide how to handle a national emergency. President Trump remains committed to restoring American greatness and will use every executive tool available.”

The lawsuit was initiated by the Liberty Justice Center, a nonpartisan legal group representing five small businesses affected by the tariffs. The plaintiffs argued that the duties acted as an unauthorized tax on American companies and consumers.

New York Attorney General Letitia James, whose state was one of twelve involved in the suit, welcomed the ruling, saying: “The Constitution is clear—no president has the authority to impose taxes unilaterally. These tariffs would have worsened inflation, harmed small businesses, and cost American jobs.”

The decision is one among at least seven legal actions launched against the administration’s trade policy by U.S. states, trade associations, and business groups.

In its opinion, the court clarified that Trump’s "Worldwide and Retaliatory Tariff Orders" did not fall within the intended scope of the IEEPA, noting that the law does not empower the president to impose broad economic penalties unless directly tied to a specific and immediate threat.

Following the decision, financial markets responded with optimism. U.S. stock futures saw an uptick, signaling investor confidence ahead of market openings. In Asia, Japan’s Nikkei 225 index rose by 1.5%, while Australia’s ASX 200 also posted gains. Meanwhile, the U.S. dollar strengthened against traditional safe-haven currencies such as the Japanese yen and Swiss franc.

As the legal battle continues, the ruling raises important questions about the limits of executive power in shaping international trade and reinforces the constitutional role of Congress in economic policymaking.