The US Court of International Trade in New York halted President Donald Trump's ambitious tariff plan late Wednesday, blocking his attempt to impose sweeping tariffs on imports from countries that export more to the US than they import from it.
In a unanimous decision by a three-judge panel, the court ruled that Trump exceeded his authority when he used the 1977 International Emergency Economic Powers Act (IEEPA) as a tool to impose tariffs, a move that, under the US Constitution, requires congressional approval.
At the heart of the ruling lies the "Day One Tariffs" initiative, which the Trump administration justified by claiming the persistent US trade deficit constituted an "extraordinary national threat" warranting emergency powers. The court dismissed this reasoning, concluding that the IEEPA does not authorize the president to bypass Congress in imposing such economic measures.
The lawsuit that led to the ruling was filed by the Liberty Justice Center on behalf of five small businesses directly harmed by the tariffs, including importers of wine and educational tools. The case joins six other challenges, including one by 13 US states and several trade groups.
According to reports, the Trump administration intends to appeal. White House spokesperson Kush Desai stated: "Unfair trade practices have devastated American communities, left our workers behind and weakened our defense industry, facts the court did not dispute. It is not unelected judges who should decide how to properly respond to a national emergency. President Trump will use every lever of executive power to address this crisis."
Meanwhile, global markets remain watchful. Trump's previously announced tariffs, targeting countries such as China, Canada and Mexico, have already triggered economic disruption and drawn criticism from economists, who argue they have hampered US growth. Market forecasts suggest an uptick is expected tomorrow, reflecting relief over the temporary removal of the threat of broad tariffs, which had raised fears of higher consumer prices and slower economic expansion.
Legal experts noted the decision is not only economically significant but also sets a major constitutional precedent, reinforcing the boundaries of executive power vis-à-vis Congress. The next battle is expected to unfold in the Court of Appeals, where the future of Trump's tariff plan will likely be determined.
