A US federal trade court has struck down President Donald Trump’s sweeping tariffs on global imports, ruling they exceeded presidential authority under emergency powers and must be permanently halted.
In a unanimous decision delivered Wednesday (Thursday AEST), a three-judge panel of the US Court of International Trade found Trump’s “Worldwide and Retaliatory Tariff Orders” invalid under the 1977 International Emergency Economic Powers Act (IEEPA). The court also blocked separate tariffs on Canada, Mexico and China that Trump had imposed in response to drug trafficking concerns, finding they bore no clear link to the stated emergencies.
“The court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the panel wrote in a per curiam opinion, concluding that Trump’s actions violated the Constitution’s allocation of trade powers to Congress.
The court’s decision responded to two lawsuits: one brought by a coalition of 12 US states, led by Oregon, and another filed by five small businesses, including wine importer V.O.S. Selections, which said the tariffs threatened their viability. The ruling grants summary judgment to the plaintiffs, effectively voiding the tariffs and prohibiting any future modifications under the same justification.
Trump imposed the tariffs on April 2, declaring trade deficits a national emergency. A 10% baseline tariff applied to most imports, with steeper rates of up to 50% on dozens of countries. In justifying the measures, Trump invoked IEEPA, a statute typically used to block financial assets during national emergencies. The court found that neither the statute’s language nor its legislative history supported the use of tariffs in this manner.
Tariffs on Canada, Mexico and China—imposed earlier under the same law to address illegal drug trafficking—were also struck down. The court held that levies on lawful imports bore no connection to the cross-border threats cited.
The decision does not affect Trump-era tariffs implemented under different statutes, such as Section 232 tariffs on steel, aluminium and autos. However, it bars the use of IEEPA to impose tariffs going forward, setting a major precedent against unilateral trade actions.
The White House filed an immediate appeal and has 10 days to comply with the ruling. A spokesperson defended the tariffs, arguing that trade deficits pose “a national emergency that has decimated American communities” and said it is “not for unelected judges to decide how to properly address” such threats.
But Oregon Attorney General Dan Rayfield welcomed the decision as “a victory not just for Oregon, but for working families, small businesses, and everyday Americans.” Trade expert Jack Slagle called the ruling a “significant setback” but warned it may not end tariff uncertainty: “This is all far from over.”
Markets reacted positively to the news. Dow futures jumped more than 500 points, and the US dollar rose against the yen and Swiss franc. Oil prices also climbed amid improved investor sentiment, while gold prices fell as demand for safe-haven assets eased. Economists said the administration still has narrower legal tools it could use to impose tariffs, including Section 122 of the Trade Act of 1974, but such measures face time limits and require congressional follow-up.
The Supreme Court is widely expected to have the final say.
