What happens to Trump's tariffs now that a court has ruled against them?

Time of India

29-05-2025

A federal court in New York dealt a major blow to US President Donald Trump on Wednesday, blocking his sweeping plan to impose hefty
tariffs on imports
from nearly every country in the world.
A three-judge panel of the
U.S. Court of International Trade
ruled that Trump exceeded his authority when he used the 1977
International Emergency Economic Powers Act
(IEEPA) to declare a national emergency and justify the wide-ranging levies.
The tariffs — which reached as high as 50% on countries with U.S.
trade deficits
and 10% on others — had disrupted global commerce, unnerved financial markets, and sparked concerns about inflation and recession both in the U.S. and globally, AP reported.
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What did the court say?
The court's ruling invalidates the tariffs Trump imposed last month on nearly all trading partners, as well as earlier levies on China, Mexico, and Canada. However, other Trump-era tariffs, such as those on steel, aluminum, and autos, remain intact since they were enacted under a different statute that requires a Commerce Department investigation.
According to AP, the court consolidated two of the at least seven lawsuits filed against the tariffs — one by five small businesses and another by 12 U.S. states. The ruling emphasized that longstanding trade deficits do not constitute a sudden emergency and noted that the tariffs did little to address the issues they were meant to fix.
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Trump's reciprocal tariffs
Trump had invoked the IEEPA in April to impose "reciprocal" tariffs, claiming that persistent trade imbalances amounted to a national emergency. In February, he had used the same law to justify duties on Canada, Mexico, and China, citing illegal immigration and drug trafficking as threats.
The U.S. Constitution grants Congress the power to set tariffs, but lawmakers have long ceded increasing authority to the executive branch. Trump's use of emergency powers to unilaterally impose tariffs tested the limits of that authority, AP noted.
Trump admin on tariffs
The administration had argued that similar emergency powers had been used by President Richard Nixon in the 1970s under the earlier Trading with the Enemy Act. But the court rejected the comparison, finding Trump's tariffs too sweeping and disconnected from the issues they were purportedly meant to address.
Trump's policy into turmoil
Wendy Cutler, a former U.S. trade negotiator and vice president at the Asia Society Policy Institute, told AP the decision 'throws the president's
trade policy
into turmoil.'
'Partners negotiating hard during the 90-day tariff pause may be tempted to hold off making further concessions to the U.S. until there is more legal clarity,' Cutler said.
Businesses, too, may adjust their operations and supply chains in anticipation of potential reinstatement should the administration appeal. The court's decision can be challenged in the U.S. Court of Appeals for the Federal Circuit and potentially reach the Supreme Court.
Eswar Prasad, a trade policy professor at Cornell University, told AP that the ruling undermines the Trump administration's core justification for using emergency powers to impose tariffs.
'The ruling makes it clear that the broad tariffs imposed unilaterally by Trump represent an overreach of executive power,' Prasad said.
While the ruling limits Trump's use of the IEEPA, the court noted he still retains narrower tariff authority under the 1974 Trade Act — but only up to 15% and for no longer than 150 days.