A United States federal court has halted the implementation of most of former President Donald Trump’s broad tariffs, delivering a legal setback to his efforts to reshape global trade through aggressive import levies.
Markets responded positively on Thursday, with major indexes climbing after the decision by the Court of International Trade, which ruled that Trump had overstepped his presidential authority.
“President Trump pledged to put America first, and the administration is committed to using every lever of executive power to address this crisis and restore American greatness,” said Trump spokesman Kush Desai, reacting to the ruling.
The court’s decision marks a significant challenge to Trump’s trade strategy, which relied heavily on tariffs to pressure foreign governments into renegotiating trade agreements.
Since returning to office in January, Trump has used national emergency powers to justify sweeping duties on imports from countries including China, Mexico, and Canada, arguing the trade imbalance and drug influx pose serious threats.
“The question in the two cases before the court is whether the International Emergency Economic Powers Act of 1977 (“IEEPA”) delegates these powers to the president in the form of authority to impose unlimited tariffs on goods from nearly every country in the world,” the three-judge panel wrote in its unsigned opinion.
“The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
According to court documents, the ruling determined that interpreting the IEEPA as granting “unlimited tariff authority is unconstitutional.”
The law allows the president to act during emergencies to combat “an unusual and extraordinary threat,” but the panel ruled that Trump’s actions fell outside those bounds.
The court gave the White House 10 days to begin the process of unwinding the tariffs.
The ruling came from two lawsuits, one filed by businesses, and another by a coalition of state governments, arguing that Trump had infringed on Congress’s constitutional authority over trade and spending.
The White House immediately filed an appeal, with top Trump ally Stephen Miller denouncing the ruling online as a “judicial coup” and claiming the courts were “out of control.”
“Unelected judges” have no right to weigh in on Trump’s handling of trade issues, the administration insisted.
Despite the legal setback, Trump has maintained that his tariff policies are already paying off.
He unveiled the sweeping new tariffs on April 2, setting a baseline rate of 10 percent, with much higher rates for targeted countries and sectors, including steep penalties on Chinese and European goods.
Earlier disruptions caused by the rollout were temporarily eased after Trump suspended some of the tariffs and introduced a 90-day delay on others to allow for negotiations.
Markets rebounded in response to the ruling. Asian stocks rallied, while U.S. and European markets showed early gains.
Japan’s chief trade negotiator, Ryosei Akazawa, said Tokyo would review the court’s decision as it headed into another round of talks in Washington.
“Trump’s declaration of a bogus national emergency to justify his global trade war was an absurd and unlawful use of IEEPA,” said Rep.
Gregory W. Meeks, the top Democrat on the House Foreign Affairs Committee.
“These tariffs are an illegal abuse of executive power.”
The Justice Department, defending Trump’s policies, argued that courts had limited oversight over presidential actions under the IEEPA, a claim that drew criticism from constitutional scholars and lawmakers who say the administration is encroaching on the authority of the legislative and judicial branches.
Trump, meanwhile, continues to frame his strategy as beneficial to Americans, citing early wins in trade talks with Britain and China.
However, economic analysts caution that the tariffs could backfire by raising consumer prices, fueling inflation, and prompting the Federal Reserve to maintain high interest rates, potentially slowing economic growth.
