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"Exceeded all authority," US trade court blocks Trump's tariffs

2025-05-29 09:19:15Kosova&Bota SHKRUAR NGA REDAKSIA VOX
"Exceeded all authority," US trade court blocks Trump's tariffs
Donald Trump

A US federal court has blocked President Donald Trump's sweeping tariffs, in a major blow to a key component of his economic policies.

The Court of International Trade ruled that an emergency law invoked by the White House did not give the president unilateral authority to impose tariffs on almost any country, the BBC writes.

The Manhattan-based court said the US Constitution gives Congress exclusive powers to regulate trade with other nations and this is not superseded by the president's mandate to protect the economy.

The Trump administration filed an appeal within minutes of the decision.

Who brought the case to court?

The lawsuit was filed by the Liberty Justice Center, a nonpartisan organization, on behalf of five small businesses that import goods from countries targeted by the duties.

This is the first major legal challenge to Trump's so-called "Liberation Day" tariffs.

A three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA), a 1977 law that Trump cited to justify the tariffs, does not give him the power to impose sweeping import taxes.

The court also blocked a series of specific tariffs that the Trump administration imposed on China, Mexico and Canada, in response to what it called an unacceptable flow of drugs and illegal immigrants into the US.

However, the court was not asked to address tariffs imposed on certain specific goods such as cars, steel and aluminum, which fall under a different law.

How is the decision being awaited?

The White House has criticized the decision, although Trump has yet to comment directly.

"It is not the job of unelected judges to decide how to properly address a national emergency," White House deputy press secretary Kush Desai said in a statement.

"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," he added.

But Letitia James, the attorney general of New York, one of the 12 states involved in the lawsuit, welcomed the decision.

"The law is clear: no president has the power to raise taxes on his own whenever he wants," said Letitia James.

"These tariffs are a massive tax increase for working families and American businesses that would have led to more inflation, economic damage to businesses of all sizes, and job losses across the country if they had been allowed to proceed," she added.

Global markets have responded positively to the decision. Asian stock markets rose on Thursday morning, U.S. stock futures also rose and the U.S. dollar posted gains against safe-haven rivals including the Japanese yen and the Swiss franc.

What happens now?

The White House has 10 days to complete the bureaucratic process of halting the tariffs, although most of them are currently suspended anyway.

The case must go through the appeals process. If the White House is unsuccessful in its appeal, the US Customs and Border Protection Agency (CBP) will issue guidance to its officers, John Leonard, a former senior CBP official, told the BBC.

However, a higher court may be friendlier to Trump.

But if all courts uphold the ruling, businesses that paid tariffs will receive refunds for the amounts paid, with interest. These include so-called reciprocal tariffs, which were reduced to 10% across the sector for most countries and increased to 145% for Chinese products, now 30%.

Leonard said there will be no changes to the border at this time and fees will still have to be paid.

The market reactions indicated, in part, that investors were “taking a deep breath after weeks of immediate volatility caused by the fiery politics of the trade war,” Stephen Innes at SPI Asset Management wrote in a commentary.

Innes said the American judges sent a clear message: "The Oval Office is not a trading desk and the Constitution is not a blank check."

The decision is “a structural shift in the narrative: from tariffs of the strong to institutional protectors,” he said.

“Exceeding executive control may finally have reached its limit. And with it, a new dose of macro stability – at least until the next headline.”

How did we get here?

On April 2, Trump unveiled an unprecedented global tariff regime by imposing import taxes on most of the US's trading partners.

A base tariff of 10% was imposed on most countries, along with higher reciprocal tariffs imposed on dozens of nations and blocs, including the EU, the United Kingdom, Canada, Mexico and China.

Trump argued that comprehensive economic policy would boost American manufacturing and protect jobs.

Global markets have been in turmoil since the announcement and later after Trump's decisions were reversed and tariffs suspended, as foreign governments sat down at the negotiating table.

Adding to the turmoil was a protracted trade war with China, as the world's two economic superpowers engaged in a steady escalation of tariffs, culminating in a 145% US tax on Chinese imports and a 125% Chinese tax on US imports.

The world's two largest economies have since agreed to a truce, with US tariffs on China being reduced to 30% and Chinese tariffs on some US imports being reduced to 10%.

The UK and the US have also announced an agreement on lower tariffs between the two governments.

Trump threatened a 50% tariff from June on all goods coming from the EU after expressing frustration with the pace of trade talks with the bloc - but then agreed to extend the deadline by more than a month after EU Commission chief Ursula von der Leyen said more time was needed.

 


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