Trade regulator rejects multiple tariffs imposed by Trump administration

A three-judge panel at the U.S. Court of International Trade ruled against numerous tariffs implemented by President Donald Trump on international trading partners, finding that his actions exceeded the authority granted by the federal government.

In the ruling handed down on Wednesday, the court argued that Trump's tariffs, which have been applied to various trading partners, lacked "any identifiable limits," and violated the International Emergency Economic Powers Act (IEEPA). The court determined that the law did not grant the President "an unbounded tariff authority."

"We instead read IEEPA's provisions to impose meaningful limits on any such authority it confers," the court wrote.

The decision effectively blocks many of the tariffs that Trump imposed during his second term, including the 10% rate on most trading partners and the duties on China. It also affects the fentanyl-related levies imposed on Canada and Mexico.

The ruling followed two separate lawsuits concerning Trump's tariffs. One lawsuit was led by a group of states, including Arizona and Oregon, who argued that the President exceeded his authority. The other lawsuit was filed by several small businesses, making a similar claim.

Arizona Attorney General Kris Mayes, a Democrat, expressed concern that the tariffs would be detrimental to Arizona's economy, stating in a statement, "They were poised to devastate our state's economy."

The White House responded by stating that trade deficits have created a national emergency, and the administration disagreed with the court's decision. Kush Desai, a White House spokesman, argued that it was not for the court to decide how to address the national emergency.

Following the court's ruling, equity futures showed strong gains in early evening trading. The Nasdaq futures jumped nearly 2%, the S&P 500 futures rose about 1.7%, and the Dow Jones Industrial Average futures surged 520 points, or nearly 1.2%. These gains followed a series of market fluctuations in recent weeks. The 30-stock Dow remains slightly negative since the president announced his tariff plan in April, but the broad S&P 500 is up 3.8% and the tech-heavy Nasdaq has risen 8.5% throughout the period. The Russell 2000, which tracks smaller companies, is up 1% since April.

The court's decision highlights the limits placed on presidential authority when imposing tariffs. Previous administrations, such as that of President Nixon, imposed more targeted and limited tariffs with clear statutory and practical limits compared to Trump's tariffs, which lacked such constraints, making them unlawful. The constitutionally established power to impose tariffs lies with Congress, and any delegation of tariff authority to the President must be clear, specific, and bounded by specific Congressional limits to be lawful and avoid excessive presidential power. Opponents argue that Trump’s tariffs have damaged the U.S. economy and triggered retaliatory measures, increasing prices and creating an unfair burden for American families, small businesses, and manufacturers.

The court's ruling on Wednesday blocked many tariffs imposed by President Trump during his second term, including those on various trading partners, China, and Canada and Mexico, affecting their respective economies.
The decision follows two separate lawsuits, one led by a group of states who argued that the President exceeded his authority, and another by small businesses making a similar claim.
After the court's ruling, equity futures showed strong gains in early evening trading, with the Nasdaq futures jumping nearly 2%, the S&P 500 futures rising about 1.7%, and the Dow Jones Industrial Average futures surging 520 points, or nearly 1.2%.
Previous administrations, such as that of President Nixon, imposed more targeted and limited tariffs with clear statutory and practical limits compared to Trump's tariffs, which lacked such constraints, making them unlawful. The constitutionally established power to impose tariffs lies with Congress, and any delegation of tariff authority to the President must be clear, specific, and bounded by specific Congressional limits to be lawful and avoid excessive presidential power.