Federal Trade Court Blocks Trump’s ‘Reciprocal’ Tariffs, Appeal Promised

WASHINGTON — The U.S. Court of International Trade, a federal court that deals exclusively with trade issues, ruled Wednesday that President Donald Trump overstepped his authority last month when he imposed tariffs on imports from nearly every U.S. trading partner.

If the ruling stands, it would strike down all tariffs imposed on April 2 – a day the president called “Liberation Day” – as well as separate taxes imposed on goods from Canada, China and Mexico that he justified as a reaction to fentanyl trafficking.

The White House said it would immediately appeal the decision by the three-judge panel to the U.S. Court of Appeals for the Federal Circuit in Washington.

During the Rose Garden ceremony during which Trump announced his so-called “reciprocal tariff” strategy, the president said he was correcting decades of unfair trading relationships that had led to huge trade deficits and wrongly disadvantaged American workers and consumers.

As he sat down to sign the executive order imposing the tariffs, he called the document the nation’s “declaration of economic independence.”

He also predicted the day he signed the order would go down as “one of the most important days in American history.”

But in its ruling on Wednesday, in a case brought by 12 states and five businesses, the court held Trump had exceeded his authority by trying to impose tariffs under the International Economic Emergency Powers Act.

The act grants the president broad authority to regulate international commerce in response to declared national emergencies.

Typically those regulatory actions target foreign countries or individuals posing an unusual or extraordinary threat to national security or the economy and are confined to sanctions, the freezing of assets and tightly regulating bank or business transactions.

No president before Trump has ever cited the act as the justification for tariffs.

“Underlying the issues in this case is the notion that ‘the powers properly belonging to one of the departments ought not to be directly and completely administered by either of the other departments,’” the court wrote, citing former President James Madison writings in the Federalist Papers (Federalist No. 48).

“Because of the Constitution’s express allocation of the tariff power to Congress … we do not read IEEPA to delegate an unbounded tariff authority to the president. We instead read [the International Economic Emergency Powers Act]’s provisions to impose meaningful limits on any such authority it confers. Two are relevant here,” the panel continued.

“First, [the act]’s delegation of a power to ‘regulate … importation,’ read in light of its legislative history and Congress’s enactment of more narrow, non-emergency legislation, at the very least does not authorize the president to impose unbounded tariffs,” it said.

“Second, IEEPA’s limited authorities may be exercised only to ‘deal with an unusual and extraordinary threat with respect to which a national emergency has been declared … and may not be exercised for any other purpose.’ As the trafficking tariffs do not meet that condition, they fall outside the scope of [the act],” the court concluded. 

The White House responded by pushing back at the court’s authority over the matter.

“It is not for unelected judges to decide how to properly address a national emergency,” the administration said in a written statement. “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.”

Trump has already scaled back the reciprocal tariffs to 10%, ostensibly to give other countries time to offer the U.S. better trade deals, but the White House has continued to maintain that he could impose them at any time with as little as a declaration on social media.

While the stakes in the case are enormous and the decision a blow to the president, they didn’t eliminate all of the tariff’s Trump has imposed since taking office in January.

Industry-specific tariffs on aluminum and steel and cars and car parts made outside the U.S. remain in place as those were authorized under a different federal statute, Section 232 of the Trade Expansion Act of 1962. 

This section grants the president the authority to adjust imports into the U.S. if they threaten national security.

Trump has threatened to use the same statute to add additional tariffs on imported computer chips, prescription drugs and copper. 

In a statement, Colorado Attorney General Phil Weiser, one of the state attorneys general who filed the case on April 23, cheered the ruling.

“Today the U.S Court of International Trade struck down and permanently blocked the president’s illegal tariffs,” Weiser said. “As the court explained, the law does not give the president unbounded power to impose vast tariffs on goods from nearly every country in the world.

“We brought this lawsuit because this was yet another example of the administration acting as though it’s above the law,” he continued. “This lawless action harmed the state and Coloradans by creating economic chaos and driving up prices at a time when so many are stretching to meet budgets.” 

The case is led by Oregon Attorney General Dan Rayfield and Arizona Attorney General Kris Mayes. 

In a statement of his own, Rayfield said “”The court’s ruling is a victory not just for Oregon, but for working families, small businesses, and everyday Americans.”

“President Trump’s sweeping tariffs were unlawful, reckless, and economically devastating,” he added.

Separately, Mayes vowed to “continue to fight … against President Trump’s illegal abuses of power.”

Also joining the lawsuit were the attorneys general of Colorado, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Mexico, New York, and Vermont.

Dan can be reached at [email protected] and on X @DanMcCue