U.S. Federal Court Blocks Trump’s Emergency Tariff Powers, Citing Legal Overreach

 New York, May 28 – A federal trade court has struck down former President Donald Trump’s attempt to impose sweeping tariffs under emergency powers, ruling that such actions exceeded the authority granted by U.S. law. The decision, issued by a three-judge panel of the U.S. Court of International Trade in New York, marks a significant legal blow to the cornerstone of Trump’s trade strategy.

At the center of the dispute is the 1977 International Emergency Economic Powers Act (IEEPA), a statute intended to grant the President authority to respond to “unusual and extraordinary threats” during a national emergency. The court ruled that the tariffs, some ranging from 10% to 54% and applied to dozens of countries, were not legally justified under this law.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the panel stated in its ruling. “This use is impermissible not because it is unwise or ineffective, but because federal law does not allow it.”

The ruling does not evaluate the policy wisdom of using tariffs as economic leverage, but clearly limits the President’s legal power to do so unilaterally. In response, the Trump administration has filed a notice of appeal, setting the stage for a broader judicial battle that could eventually reach the U.S. Supreme Court.

White House Pushback and Market Reaction

The White House quickly criticized the decision, arguing it encroaches on executive authority in times of national crisis.

“It is not for unelected judges to decide how to properly address a national emergency,” said Kush Desai, a White House spokesperson, in a statement to Reuters.

Financial markets, however, welcomed the ruling. The U.S. dollar strengthened sharply against major currencies including the euro, yen, and Swiss franc. Equities rose on Wall Street and across Asian markets, as investors responded positively to the removal of uncertainty surrounding U.S. trade policy.

Legal, Political, and Economic Implications

The decision casts serious doubt over one of Trump’s signature economic tools—using unilateral tariffs to extract trade concessions and reduce the U.S. trade deficit, which stands at approximately $1.2 trillion. The ruling also underscores the limits of executive power in the face of Congressional oversight.

Without the emergency tariff mechanism, any future administration would likely need to pursue lengthier trade investigations under standard U.S. trade law, slowing the pace and impact of economic retaliation.

The Trump administration contends that its interpretation of the IEEPA mirrors that of President Richard Nixon’s in 1971, a precedent that it believes supports executive latitude. It has also argued that trade deficits themselves constitute a national emergency—an assertion the court clearly rejected.

Wider Legal Challenge and States’ Opposition

The court's decision is one of at least seven legal challenges mounted against the Trump tariffs. Among the plaintiffs is VOS Selections, a small wine importer, which claims the levies threaten its survival. A coalition of twelve states led by Oregon has also filed suit.

“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” said Oregon Attorney General Dan Rayfield.

While the court refrained from assessing the economic consequences of the tariffs, many economists have warned that Trump’s policies had disrupted global markets without delivering the intended manufacturing revival. Despite the tariffs, U.S. economic indicators have shown minimal impact on industrial job growth.

Trump Allies Respond

Some in Trump’s circle reacted sharply to the court’s decision. Stephen Miller, White House Deputy Chief of Staff for Policy, posted on social media, claiming “the judicial coup is out of control.” Trump himself did not immediately respond on his platform Truth Social, instead commenting on a separate legal victory involving his lawsuit against the Pulitzer Prize Board.

What’s Next?

The ruling can be appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., and potentially the Supreme Court. Its outcome may define the limits of presidential authority in shaping trade policy for years to come.

As the legal process continues, the decision has already reasserted a fundamental constitutional principle: trade policy, especially when involving broad economic consequences, must remain grounded in law—not in executive discretion.