The three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA) of 1977, which Trump relied on to impose the duties, does not authorize such widespread tariffs. The court emphasised that under the US Constitution, only Congress can regulate foreign commerce a power that cannot be bypassed by executive action.
The ruling addressed two consolidated lawsuits: one brought by the Liberty Justice Center on behalf of small businesses affected by the tariffs, and another by a coalition of 12 US states, including New York. These cases marked the first major legal challenge to Trump’s “Liberation Day” tariffs.
Reactions Across the Political and Economic Spectrum
The White House quickly condemned the decision and appealed shortly after the ruling. White House deputy press secretary Kush Desai stated, “It is not for unelected judges to decide how to properly address a national emergency,” affirming that the administration would continue using executive powers to prioritize American interests.
New York Attorney General Letitia James, representing one of the states involved in the lawsuit, praised the court’s decision. “The law is clear: no president has the power to raise taxes whenever they like single-handedly,” she said. James also warned that the tariffs would further fuel inflation, hurt businesses, and lead to job losses.
What Happens Next?
Although most of the contested tariffs have already been suspended, the administration now has ten days to initiate the process of formally removing them. However, the appeal process could delay any immediate changes. John Leonard, a former US Customs and Border Protection official, noted that if the appeal fails, businesses that paid the tariffs will be eligible for refunds, including interest.
Despite the court decision, tariffs remain in effect at the border for now. Analysts expect other countries to hold off on trade negotiations until the appeal is resolved. Paul Ashworth of Capital Economics said the ruling disrupts the Trump administration’s plans to quickly finalise trade deals during a temporary pause in tariff actions.
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