Court strikes down most of Trump’s tariffs, ruling them illegal

A federal court on Wednesday froze most of the sweeping tariffs imposed by President Trump on virtually every foreign nation, ruling the levies exceed the president’s legal authority.

(UPDATE: The ruling has been temporarily halted by an appeals court – read more here.)

The ruling — issued by a panel of judges on the U.S. Court of International Trade — halted the sweeping 10% tariffs Mr. Trump assessed on virtually every U.S. trading partner on “Liberation Day” last month, with higher tariffs threatened for dozens of countries. The court also blocked a separate set of tariffs imposed on China, Mexico and Canada by the Trump administration, which has cited drug trafficking and illegal immigration as its reasoning for the hikes.

Global markets rallied on the news.

The Trump administration has justified the tariffs by citing the International Emergency Economic Powers Act of 1977, or IEEPA, which gives the president the power to regulate imports during certain emergency situations. But the court on Wednesday rejected the government’s interpretation of the law, and said it would be unconstitutional for any law passed by Congress to give the president blanket authority to set tariffs.

“The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the judges wrote Wednesday.

The court said Mr. Trump’s global 10% tariffs aren’t authorized by IEEPA because they’re designed to deal with trade imbalances between the U.S. and the rest of the world, which the judges said should fall under non-emergency legislation. 

And the China, Canada and Mexico tariffs aren’t legal because they “do not deal with the threats set forth in those orders,” the court also found. 

The three judges who wrote Wednesday’s ruling were nominated to the bench by former President Ronald Reagan, former President Barack Obama and Mr. Trump in his first term.

“It’s great to see that the court unanimously ruled against this massive power grab by the President. 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.” Ilya Somin, a law professor at George Mason University involved in one of the lawsuits before the U.S. Court of International Trade, said in a statement.

Following the decision by the U.S. Court of International Trade, a federal district judge in Washington, D.C., ruled that Mr. Trump’s tariffs deriving from a series of executive orders invoking IEEPA are unlawful.

U.S. District Judge Rudolph Contreras found that the law “does not authorize the president to impose the tariffs set forth” in five of his orders and barred the Trump administration from collecting any tariff deriving from them from the plaintiffs in the case, two family-owned businesses based in Illinois. The judge paused his order for 14 days to give the Justice Department time to appeal to the U.S. Court of Appeals for the District of Columbia Circuit.

The case, Contreras wrote in a 33-page decision, “is about whether IEEPA enables the president to unilaterally impose, revoke, pause, reinstate, and adjust tariffs to reorder the global economy. The court agrees with plaintiffs that it does not.”

The Trump administration said in court papers with the trade court that it will appeal the ruling to the Federal Circuit Court of Appeals. The Justice Department has said that if the appeals court declines to provide interim relief in the coming hours, the U.S. will ask the Supreme Court to intervene Friday.

“Absent at least interim relief from this Court, the United States plans to seek emergency relief from the Supreme Court tomorrow to avoid the irreparable national-security and economic harms at stake,” the Justice Department filing said.

The department has also asked the U.S. Court of International Trade to pause enforcement of its ruling pending appeal. That court has given the states and small businesses until Friday at 12 p.m. to respond to the government’s stay request.

White House spokesperson Kush Desai responded to the ruling by defending the reasoning for the tariffs, saying the U.S.’s trade deficits with other countries have “created a national emergency that has decimated American communities.”

“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,” Desai said in a statement.

Tariffs are a signature part of Mr. Trump’s second-term agenda. He argues the levies are necessary to boost U.S. manufacturing and end what he views as unfair trade practices. But the moves have rattled financial markets and drawn rebuke from Democrats, as well as some Republicans.

Mr. Trump has stood by his tariff strategy but halted many of the levies while vowing to negotiate with U.S. trading partners. A set of so-called “reciprocal” tariffs on dozens of countries were paused in April for a period of at least three months. Goods that fall under the U.S.-Mexico-Canada Agreement were exempted from 25% tariffs. Massive tariffs on Chinese goods have also been cut back amid negotiations.

Meanwhile, the tariffs have drawn lawsuits from businesses, Democratic states and other parties. Wednesday’s ruling was linked to two lawsuits: One from a group of businesses that say they have been harmed by the tariffs, and one from several states.

Some of the lawsuits against the tariffs have raised legal doctrines long championed by conservative lawyers and judges to restrict the authority of executive branch agencies. Those include the major questions doctrine, which says Congress needs to give clear authorization for federal agencies to decide issues of major economic significance, and the nondelegation doctrine, which holds that Congress can’t delegate its legislative power to the executive branch.

“If this issue gets to the Supreme Court, which is a big if, and if it comes down to the major questions doctrine or the nondelegation doctrine, and those are big ifs as well, we believe the court’s precedent requires them to rule in our favor,” Somin told CBS News earlier this month.