Trump’s ‘Liberation Day’ Tariffs Halted by Court of International Trade
Most of President Trump’s tariffs were halted late Wednesday by a US trade court in a sharp rebuke of the president’s signature trade war policy.
May 28, 2025 at 8:32 p.m. EDT
President Donald Trump speaks during an event to announce new tariffs in the Rose Garden last month. (Brendan Smialowski /AFP via Getty Images)
By David J. Lynch and Cat Zakrzewski, Washington Post
A specialized federal court in New York on Wednesday ruled that most of President Donald Trump’s tariffs — including those on Chinese goods — are illegal, upending negotiations with more than a dozen nations and creating fresh uncertainty for countless American businesses that depend upon foreign suppliers.
The decision by the little-known Court of International Trade neuters the president’s signature trade initiative: the comprehensive flurry of import taxes he announced on April 2 under the banner of “Liberation Day.”
Those tariffs sent the value of U.S. stocks, bonds and the dollar into sharp decline, causing global investors to rethink their habitual faith in the United States and raising questions about the U.S. economic outlook.
The trade court’s ruling that Trump exceeded his authority in imposing tariffs on all imported goods brought an immediate, albeit perhaps temporary, halt to his signature trade war policy.
“The challenged Tariff Orders will be vacated and their operation permanently enjoined,” a three-judge panel ruled.
Futures contracts on the S&P 500 stock index jumped 1.4 percent on the news. But a few hours later, the Justice Department said in a federal court filing that it will appeal.
The trade court’s decision in a pair of lawsuits filed last month against the government applies to the 10 percent tariffs Trump imposed on all foreign products as well as the much higher levies applied to goods from several dozen nations. The president invoked a 1977 law that granted him emergency powers over the economy, the International Emergency Economic Powers Act or IEEPA.
The trade court’s ruling also freezes separate tariffs on Mexican, Canadian and Chinese goods, which Trump imposed to coerce those governments into taking action to counter human and drug trafficking. But import taxes on specific products such as automobiles, auto parts, steel and aluminum will remain in effect.
“He took a big gamble doing this under emergency powers. That gamble lost,” said Peter Harrell, a former Biden administration attorney who helped draft a brief from 148 House members supporting one of the lawsuits, which was filed by a group of 12 states.
The states, all with Democratic governors, said they suffered “direct financial harm” from the tariffs, which made imported goods used to provide public services more expensive.
The court ruling also applied to a case filed by five owner-operated businesses that said they had been harmed by the president’s inappropriate use of executive power. The businesses — V.O.S. Selections, Genova Pipe, MicroKits, FishUSA and Terry Cycling — cited problems with sourcing and cash flow in the wake of the president’s April tariffs.
That case was filed by the Liberty Justice Center, a nonpartisan organization in Austin.
“It is great to see that the court unanimously ruled against this massive power grab by the President,” said Ilya Somin, co-counsel in the case and a law professor at George Mason University’s Scalia Law School. “The ruling emphasizes that he was wrong to claim a virtually unlimited power to impose tariffs, that IEEPA law doesn’t grant any such boundless authority, and that it would be unconstitutional if it did.”
The court noted that IEEPA says the president may only use his emergency powers “to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared.”
Trump pointed to the merchandise trade deficit that the United States has run each year since 1975 as the “emergency” justifying his sweeping tariffs.
Wednesday’s ruling also applies to other tariffs that the president imposed on Mexico and Canada, citing an emergency over illegal migration and drug trafficking, and China for its alleged role in facilitating production of the opioid fentanyl.
The trade court rejected those tariffs, saying they failed to meet the law’s requirement that they “deal with an unusual and extraordinary threat.” Instead of addressing the president’s stated objective of curbing illicit cross-border trafficking in people and drugs, the tariffs were designed to “create leverage” to get other governments to do so, the court said.
Shortly after the decision was made public, the White House responded.
“Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits. These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base — facts that the court did not dispute. It is not for unelected judges to decide how to properly address a national emergency. 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 Kush Desai, a White House spokesman.
End of carousel
No other president has used IEEPA to impose tariffs, and Trump’s novel use of the authority sparked a wave of litigation. As small businesses from across the country lined up to sue, multinational corporations such as Apple opted to seek relief from the White House through private meetings and phone calls.
The government argued that the economic emergency law’s language authorizing the president to “regulate … importation” granted him full powers over tariff rates. But the trade court disagreed, saying the law did not authorize “the President to impose whatever tariff rates he deems desirable.”
Legal experts have told The Post that the lawsuits are likely to succeed if they make it to the Supreme Court. Tim Meyer, the co-director of the Center for International and Comparative Law at Duke University Law School, said the president is “overwriting” legislation that Congress passed to levy tariffs.
“When the White House is itself touting this as the largest tax increase in American history, I think that’s going to make the justices sit back and think the Constitution gives Congress, and Congress alone, the authority to levy duties, impose tariffs and to regulate foreign commerce,” said Meyer, who clerked for Supreme Court Justice Neil M. Gorsuch, a Trump nominee, when he served on the U.S. Court of Appeals for the 10th Circuit.
The ruling adds fresh uncertainty to the world of American importers and more than one dozen ongoing U.S. trade negotiations, including those with the European Union and China.
The Trump administration is certain to appeal the decision and could seek an emergency stay, which would reinstate the tariffs at least temporarily.
The president’s trade team also could try to impose the same tariffs using more traditional legal avenues, according to Simon Lester, author of the international economic law and policy blog. Relying on other provisions of trade law would take time and require the government to complete various procedural steps.
“There are other tariff statutes available, and I’m sure the Trump administration is prepared to use them,” he said.
Another challenge to the president’s tariff authority also is working its way through the courts.
Right after Trump raised U.S. import taxes to their highest level in more than a century, the New Civil Liberties Alliance, a nonprofit that has previously received financial support from conservative donor Charles Koch’s foundation, filed a lawsuit in federal court in Florida challenging Trump’s authority.
Last week, Judge T. Kent Wetherell II, a federal judge in Florida, said he agreed with the federal government’s argument that IEEPA allows the president to issue tariffs.
But Wetherell transferred that case, on behalf of Simplified, a planner company that manufactures its products in China, to the trade court in New York, meaning he will not be the one to decide the matter.
source https://panafricannews.blogspot.com/2025/05/trumps-liberation-day-tariffs-halted-by.html
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