In a setback to US President Donald Trump’s trade strategy, a US federal court has blocked his sweeping “Liberation Day” tariffs, ruling that he overstepped his authority in using emergency powers to impose hefty levies on all US trading partners.
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“The court does not read [the International Emergency Economic Powers Act] to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” a three-judge panel of the New York-based US Court of International Trade said in its verdict in a lawsuit brought by five American businesses.
This marks the first major legal challenge to Trump’s tariffs, and the unfavourable ruling potentially upends his broader trade strategy.
In April, Trump invoked IEEPA, which allows the president to impose economic measures during a national emergency, to address an “unusual and extraordinary threat”.
In statements related to a similar case before the same panel on Friday, US Commerce Secretary Howard Lutnick and Secretary of State Macro Rubio urged the court to uphold the tariffs, arguing that striking them down would embarrass the US and motivate other countries to retaliate.
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