FnF News
U.S. Trade Court Strikes Down Trump’s ‘Liberation Day’ Tariffs, Citing Executive Overreach(BBC)
By Khadija | FNF News | May 29, 2025
In a landmark decision on Wednesday, the U.S. Court of International Trade in Manhattan ruled that former President Donald Trump exceeded his constitutional authority by imposing sweeping tariffs under the guise of emergency powers. The court’s unanimous decision invalidated the so-called “Liberation Day” tariffs, marking a significant setback for Trump’s trade policy.(The Economic Times)
The three-judge panel determined that Trump’s use of the 1977 International Emergency Economic Powers Act (IEEPA) to justify tariffs on a broad range of imports was unlawful. The IEEPA, designed to address “unusual and extraordinary threats,” does not grant the president unchecked authority to impose tariffs without congressional approval. The court emphasized that trade deficits do not constitute a national emergency warranting such measures. (Barron’s, 6abc Philadelphia, AP News)
The ruling came in response to lawsuits filed by a coalition of 13 Democratic-led states and several small businesses, including V.O.S. Selections, Inc., a wine importer adversely affected by the tariffs. The plaintiffs argued that the tariffs disrupted supply chains, increased consumer prices, and harmed small enterprises. (Wikipedia, Business Insider)
The court’s decision permanently enjoins the enforcement of the “Liberation Day” tariffs, which had imposed a baseline 10% rate on imports from numerous countries, including China, Canada, and Mexico. However, tariffs related to national security concerns, such as those on steel, aluminum, and automobiles under Section 232, remain unaffected. (Barron’s, AP News)
The Trump administration announced plans to appeal the ruling, asserting that the tariffs were necessary to address national economic threats posed by trade imbalances. White House spokesperson Kush Desai stated, “It is not for unelected judges to decide how to properly address a national emergency.” (Business Insider, 6abc Philadelphia)
Legal experts view the court’s decision as a reinforcement of the constitutional separation of powers, emphasizing Congress’s exclusive authority to regulate commerce with foreign nations. The ruling may influence ongoing global trade negotiations and set a precedent limiting executive overreach in trade policy. (Fox Business, Barron’s)
Financial markets responded positively to the ruling, with the S&P 500 and Treasury yields experiencing modest gains, reflecting investor optimism over reduced trade tensions. (Barron’s)
As the legal battle continues, the case underscores the ongoing debate over the scope of presidential powers in shaping U.S. trade policy.
Tags:
- Executive Authority
- Trade Policy
- Court Ruling
- Liberation Day Tariffs