A federal court on Wednesday struck down President Donald Trump's sweeping tariffs on foreign imports, ruling the administration exceeded its legal authority under emergency economic statutes. The decision places a permanent injunction on many of the tariffs Trump imposed under the International Emergency Economic Powers Act (IEEPA), including the high-profile 10% "Liberation Day" duties.
A three-judge panel at the U.S. Court of International Trade in Manhattan unanimously concluded that Trump's use of IEEPA to levy tariffs lacked statutory grounding and represented an unconstitutional delegation of power. "The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder," the judges wrote.
The ruling applies to 10% universal tariffs, as well as targeted levies on Chinese, Canadian, and Mexican goods, including 30% tariffs on China and 25% duties on imports from America's neighbors. It does not affect separate tariffs imposed under Section 232 of the Trade Expansion Act, such as those on autos, steel, and aluminum.
The case was brought by the Liberty Justice Center and several small businesses, including wine-seller VOS Selections, alongside a coalition of 12 Democratic state attorneys general. The plaintiffs argued that IEEPA does not authorize tariff actions and that the administration's declarations of emergency were legally insufficient.
"We won - the state of Oregon and state plaintiffs also won," said Ilya Somin, a law professor at George Mason University and one of the plaintiff lawyers. "The opinion rules that entire system of liberation day and other IEEPA tariffs is illegal and barred by permanent injunction."
White House spokesperson Kush Desai defended the administration's rationale, stating: "It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First... the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness."
Stephen Miller, the White House deputy chief of staff for policy, posted on X: "The judicial coup is out of control."
Trump had invoked IEEPA on April 2 to launch a new wave of reciprocal tariffs, claiming the nation faced economic and drug trafficking emergencies. However, the court held that the threats cited did not align with the legal requirements under IEEPA and that tariffs are not among the remedies the statute permits.
"The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs," the panel ruled.
The decision triggered immediate market reaction, with Dow futures climbing nearly 500 points. The S&P 500 rose 1.4%, and Nasdaq futures gained 1.6% in after-hours trading.
"This is potentially... a significant policy pivot point should it hold up," said Joe Brusuelas, chief economist at RSM US, adding the ruling could provide relief for small businesses lacking the margins to absorb prolonged tariff costs.
The administration has filed a notice of appeal to the Federal Circuit Court, and observers believe the case could ultimately reach the U.S. Supreme Court.
"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. "The Constitution doesn't give any president unchecked authority to upend the economy."
