In a stunning rebuke to President Donald Trump’s trade strategy, the U.S. Court of International Trade ruled Wednesday that the president cannot use emergency powers to unilaterally impose sweeping tariffs, invalidating several key components of Trump’s “Liberation Day” tariff initiative introduced earlier this year.
The court ruled that Trump’s use of the International Emergency Economic Powers Act of 1977 (IEEPA) to enact tariffs on imports from dozens of countries — including China, Mexico, and Canada — exceeded the authority granted under that law.
“IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders,” the three-judge panel wrote. “The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder.”
The decision marks a significant legal and political setback for President Trump’s second-term economic agenda, which has leaned heavily on aggressive tariff use as both an economic tool and a foreign policy lever.
Trump Administration’s Broad Use of Emergency Powers Rejected
Trump’s “Liberation Day” tariffs — a central policy push this spring — were billed by the White House as a way to force trade concessions and realign global supply chains. The administration justified the action using IEEPA, a statute that allows the president to respond to national emergencies involving foreign threats, typically through sanctions or financial restrictions.
But the Court of International Trade concluded that tariffs do not fall within the intended scope of IEEPA, and that the president’s actions constituted an overreach of executive power.
The court’s ruling vacates the tariffs and permanently bars their enforcement.
Cases Brought by Businesses and States
The decision came in response to two lawsuits — one filed by affected U.S. businesses and another by a coalition of states — that challenged the constitutionality of Trump’s tariffs and his interpretation of IEEPA.
The plaintiffs argued that Congress retains authority over trade and tariffs under Article I of the Constitution, and that Trump’s use of IEEPA to bypass legislative input was illegal.
The court agreed, noting that while presidents have broad latitude in emergencies, that power has limits — particularly when it collides with core congressional functions like taxation and trade.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA,” the court found. “The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders.”
White House Reacts, Promises Appeal
The Trump administration responded swiftly and defiantly. In a post on X, senior Trump advisor Stephen Miller blasted the decision, calling it “a judicial coup” and accusing the judiciary of sabotaging the president’s lawful actions.
White House officials confirmed the Justice Department will immediately appeal the ruling, likely escalating the case toward the U.S. Supreme Court.
President Trump has not commented publicly yet but is expected to address the decision in upcoming speeches, particularly as he campaigns to defend his trade policies amid growing legal scrutiny.
Bipartisan Concern Over Executive Trade Power
The ruling may ignite new momentum in Congress to reassert its constitutional role in trade policy, which has gradually been delegated to the executive branch over the last several decades. Some conservative lawmakers have warned that Trump’s use of emergency powers sets a precedent future presidents could exploit.
“Presidents cannot invent emergencies to impose taxes,” said Sen. Mike Lee (R-UT), a longtime advocate for limiting executive trade powers. “This ruling rightly puts Congress back where it belongs — in charge of tariffs.”
Trump’s allies, however, argue that his aggressive trade approach has yielded results, with over 70 countries reportedly entering trade negotiations in response to the “Liberation Day” tariffs before they were halted by legal challenges.
Following market turmoil and business pressure, the White House had already issued a 90-day pause on the tariffs to allow time for negotiations — a move that may have preempted some of the economic fallout now averted by the court ruling.
What Comes Next?
If the ruling is upheld on appeal, it could permanently limit the ability of presidents to use IEEPA for tariff-based trade actions, closing a controversial avenue of executive power Trump revived during both of his terms.
Legal experts say the ruling may also influence how future administrations use emergency authorities across a range of economic issues.
“This is a defining moment in the ongoing tension between the executive and legislative branches,” said Georgetown law professor Monica Delgado. “It’s a reminder that even in the modern presidency, there are constitutional lines that cannot be crossed.”
