U.S. Federal Court Overturns Trump’s Tariffs and Duties

A pivotal ruling from the U.S. Court of International Trade declared that the extensive trade tariffs imposed by Donald Trump were unconstitutional. This decision specifically blocked a 30% tariff on imports from China, a 25% tariff on select goods from Mexico and Canada, and a general 10% tariff on most imports into the United States. This ruling marked a significant setback for Trump’s economic strategy, which relied heavily on tariffs as leverage against trading partners. However, tariffs on automobiles, steel, and aluminum, imposed under a different legal framework, remain unaffected.

The White House has been given a 10-day window to adhere to the ruling, but the Justice Department has already initiated an appeal, indicating that the matter may ultimately reach the Supreme Court.

The court’s decision arose from two lawsuits filed by various U.S. companies and a coalition of 12 states, spearheaded by Democratic attorneys general. The plaintiffs contended that Trump overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) of 1977 to enact these tariffs. The court concurred, asserting that IEEPA does not empower the president to impose such significant tariffs without Congressional approval, which the U.S. Constitution reserves exclusively for regulating foreign trade. The court also emphasized that the tariffs aimed at addressing drug trafficking from Mexico, Canada, and China were not justified by the alleged threats, noting that the universal tariffs intended to reduce the trade deficit did not align with the definition of an emergency.

Trump had announced the tariffs to take effect on April 2, 2025, dubbing it “Liberation Day.” Following the ruling, financial markets reacted positively, with the Dow Jones Industrial Average climbing 500 points, although uncertainty persists due to the ongoing appeal, as highlighted by trade experts, who described the ruling as “a significant defeat for the administration.” Trump defended the tariffs by arguing they were necessary to tackle the U.S. trade deficit, which he labeled a national security threat, and to combat the influx of fentanyl across the border. However, The court deemed these justifications inadequate, concluding that the long-standing trade deficit, existing since 1975, did not represent an “unusual and extraordinary threat.”