In a major rebuke to the White House, a three-judge panel from the U.S. Court of International Trade ruled Wednesday that President Donald Trump’s sweeping “Liberation Day” tariffs—imposed under emergency powers—are unconstitutional and must be permanently blocked. The ruling throws cold water on one of the administration’s boldest and most controversial economic maneuvers, reaffirming that trade policy remains firmly under the authority of Congress.
The decision centers on the International Emergency Economic Powers Act of 1977 (IEEPA), which Trump used to justify widespread tariffs on imports from dozens of countries. The administration claimed that America’s chronic trade deficits—stretching nearly five decades—constituted a “national emergency,” thereby empowering the president to act unilaterally.
The court, however, found no legal or constitutional basis for such a move.
“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the panel wrote.
Simply put, the court ruled that IEEPA does not give the president carte blanche to use tariffs as a blunt instrument of trade war. The law, originally designed to address genuine threats such as terrorism or cyberattacks, does not justify emergency action based on longstanding economic conditions like trade imbalances.
The ruling stems from a barrage of lawsuits filed by small businesses and a dozen states, led by Oregon. Plaintiffs included V.O.S. Selections, a wine importer whose owner said the tariffs were “crippling” to his business.
“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.
The decision underscores a rare but forceful example of judicial intervention in executive trade policy, typically considered a gray zone. Plaintiffs argued convincingly that Trump’s use of emergency powers was both legally unfounded and economically destabilizing.
The Trump administration did not issue an immediate statement but is expected to appeal the ruling, potentially escalating the battle to the U.S. Supreme Court. Trump and his allies maintain that trade deficits are a legitimate threat and that precedent exists in Richard Nixon’s emergency tariffs in 1971—though the legal context differs significantly.
In its defense, the administration argues that only Congress, not the judiciary, can determine whether an emergency is valid under the law—framing the issue as a “political question” beyond judicial review.
But the court decisively rejected that framing, signaling that emergency declarations used to reshape global trade policy must meet strict statutory criteria, not political expediency.
The “Liberation Day” tariffs formed the core of Trump’s aggressive trade nationalism, targeting countries as diverse as Canada, China, and Mexico. These tariffs were promoted as tools to pressure nations into cutting better deals, reduce the flow of illegal drugs and immigration, and reverse chronic trade imbalances.
But they also rattled global markets, drew sharp criticism from economists, and—despite their scale—had little measurable impact on U.S. GDP or employment, according to several nonpartisan reports. The World Bank and IMF both downgraded the U.S. economic outlook during their rollout.
While the political effect was rallying populist support, the legal framework never caught up with the administration’s ambitions—until now.
