Court strikes down most of Trump's tariffs, ruling them illegal
A federal court on Wednesday froze most of the sweeping tariffs imposed by President Trump on virtually every foreign nation, ruling the levies exceed the president's legal authority.
The ruling — issued by a panel of judges on the U.S. Court of International Trade — halted the sweeping 10% tariffs Mr. Trump assessed on virtually every U.S. trading partner on "Liberation Day" last month, with higher tariffs threatened for dozens of countries. The court also blocked a separate set of tariffs imposed on China, Mexico and Canada by the Trump administration, which has cited drug trafficking and illegal immigration as its reasoning for the hikes.
Global markets rallied on the news.
The Trump administration has justified the tariffs by citing the International Emergency Economic Powers Act of 1977, or IEEPA, which gives the president the power to regulate imports during certain emergency situations. But the court on Wednesday rejected the government's interpretation of the law, and said it would be unconstitutional for any law passed by Congress to give the president blanket authority to set tariffs.
"The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder," the judges wrote Wednesday.
The court said Mr. Trump's global 10% tariffs aren't authorized by IEEPA because they're designed to deal with trade imbalances between the U.S. and the rest of the world, which the judges said should fall under non-emergency legislation.
And the China, Canada and Mexico tariffs aren't legal because they "do not deal with the threats set forth in those orders," the court also found.
The three judges who wrote Wednesday's ruling were nominated to the bench by former President Ronald Reagan, former President Barack Obama and Mr. Trump in his first term.
The Trump administration said in court papers that it will appeal the ruling to the Federal Circuit Court of Appeals.
White House spokesperson Kush Desai responded to the ruling by defending the reasoning for the tariffs, saying the U.S.'s trade deficits with other countries have "created a national emergency that has decimated American communities."
"It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness," Desai said in a statement.
Tariffs are a signature part of Mr. Trump's second-term agenda. He argues the levies are necessary to boost U.S. manufacturing and end what he views as unfair trade practices. But the moves have rattled financial markets and drawn rebuke from Democrats, as well as some Republicans.
Mr. Trump has stood by his tariff strategy but halted many of the levies while vowing to negotiate with U.S. trading partners. A set of so-called "reciprocal" tariffs on dozens of countries were paused in April for a period of at least three months. Goods that fall under the U.S.-Mexico-Canada Agreement were exempted from 25% tariffs. Massive tariffs on Chinese goods have also been cut back amid negotiations.
Meanwhile, the tariffs have drawn lawsuits from businesses, Democratic states and other parties. Wednesday's ruling was linked to two lawsuits: One from a group of businesses that say they have been harmed by the tariffs, and one from several states.
Some of the lawsuits against the tariffs have raised legal doctrines long championed by conservative lawyers and judges to restrict the authority of executive branch agencies. Those include the major questions doctrine, which says Congress needs to give clear authorization for federal agencies to decide issues of major economic significance, and the nondelegation doctrine, which holds that Congress can't delegate its legislative power to the executive branch.
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