A federal court on Wednesday blocked former President Donald Trump’s sweeping global tariffs, ruling that he overstepped his authority under emergency economic powers. The decision, issued by the U.S. Court of International Trade in Manhattan, halts key levies on goods from China, Mexico, and Canada and casts doubt on the future of Trump’s controversial trade agenda.
A three-judge panel unanimously declared that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose import duties was unlawful. The ruling targets the so-called “Liberation Day” tariffs and other emergency measures enacted earlier this year to curb fentanyl trafficking and retaliate against trade partners.
“The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA,” the court wrote in its opinion, issuing a permanent injunction to block their enforcement. A 10-day window was granted for administrative adjustments.
The administration quickly appealed the decision Wednesday night, leaving the status of the tariffs in limbo and signaling a likely legal battle that could reach the Supreme Court.
The court’s decision does not affect tariffs on autos, steel, aluminum, or other items imposed under separate trade laws. However, the halted duties—30% on China, 25% on select Mexican and Canadian goods, and 10% across most imports—had weighed heavily on both businesses and consumers.
Stock markets surged after the news. Dow futures climbed 500 points in afterhours trading, with broader indices also showing gains.
The lawsuit was led by libertarian legal group Liberty Justice Center and brought on behalf of small businesses, including wine importer VOS Selections. A parallel suit by twelve Democratic-led states, including Oregon, challenged the constitutionality of Trump’s unilateral tariff actions.
“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” said Oregon Attorney General Dan Rayfield.
Legal experts were surprised by the verdict. “The reason it’s a surprise is that plaintiffs almost never win in challenges to presidential emergency powers,” said Gary Clyde Hufbauer of the Peterson Institute for International Economics.
Critics of the decision called it judicial overreach. “The judicial coup is out of control,” wrote Trump adviser Stephen Miller on X.
Still, the ruling was hailed as a potential turning point for small and mid-sized businesses struggling under rising import costs. “They want certainty,” said Jeffrey Schwab, lead attorney for Liberty Justice Center. “This decision offers that hope.”
The case now moves to the U.S. Court of Appeals for the Federal Circuit. If upheld, it could significantly rein in executive power on trade and reshape U.S. tariff policy for years to come.
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