U.S. President Donald Trump holds up a chart while speaking during a “Make America Wealthy Again” trade announcement on April 2, 2025 in Washington, DC.
Chip Somodevilla | Getty Images News | Getty Images
A federal court ruled Wednesday that President Donald Trump exceeded his authority with his reciprocal tariffs, dealing a blow to a major tenet of the president’s economic agenda.
A three-judge panel at the Court of International Trade ruled that the International Emergency Economic Powers Act, a 1977 law that Trump invoked to justify the tariffs, does not actually give the president the power to unilaterally implement the sweeping duties.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the judges wrote in their ruling.
“The Trafficking Tariffs fail because they do not deal with the threats set forth in those orders,” they continued.
Dow futures jumped 400 points Wednesday on news of the ruling.
Implementing tariffs typically requires congressional approval, but Trump chose to bypass Congress by declaring a national economic emergency, and using the purported emergency as justification for invoking the tariffs on his own.
The Trump administration swiftly appealed the ruling Wednesday.
“Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits,” White House spokesperson Kush Desai said in a statement after the order.
“These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base – facts that the court did not dispute.”
“It is not for unelected judges to decide how to properly address a national emergency,” Desai added.
The ruling — and subsequent Trump administration appeal — likely sets up a bitter legal battle that could wind up at the Supreme Court.
The suit was brought on behalf of five U.S. businesses that rely on imports from the U.S. to some extent. The judges said that Trump’s tariff orders were “unlawful as to all,” not just the plaintiffs, so there would be “no question here of narrowly tailored relief.”
The judges ordered the challenged tariffs to be “vacated and their operation permanently enjoined.”
Trump, on April 2, announced sweeping reciprocal tariffs on imports from nations around the world. Days later, on April 9, he issued a 90-day pause, but kept in place the 10% baseline tariffs on most products entering the country.
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