US court blocks Trump’s global tariffs, reining in executive trade powers - Trade Treasury Payments

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US court blocks Trump’s global tariffs, reining in executive trade powers

A US federal court has struck down President Donald Trump’s sweeping tariff regime, ruling that the administration overstepped its legal authority by imposing global levies under emergency powers. The decision, handed down by the Court of International Trade in New York, nullifies two pillars of Trump’s trade policy: the across-the-board “reciprocal” tariffs and a set of tariffs tied to a fentanyl-related national emergency.

The court found that Trump’s actions exceeded the limits set by the International Emergency Economic Powers Act (IEEPA), a 1977 statute typically used for sanctions and targeted economic measures during genuine crises. By applying it to justify broad-based tariffs on nearly all trading partners, the court said, the administration invoked emergency powers in ways not supported by law or precedent. 

The ruling reinforces the long-standing principle that Congress, not the executive, holds the constitutional authority to regulate foreign commerce.

Constitutional overreach and legal limits

At issue was whether IEEPA allows the president to implement tariffs without clear legislative backing. The court said it does not. The fentanyl-related tariffs on Canada, Mexico, and China were rejected on the grounds that they did not directly address the stated emergency. Instead, the administration admitted they were designed to gain leverage, an objective the court said fell outside the legal definition of “dealing with” an emergency.

In a broader rebuke, the judges ruled that the reciprocal tariffs imposed under the banner of addressing trade deficits also lacked legal justification. IEEPA does not mention tariffs, and the court said relying on its general language about regulating imports could not support what it described as an “unbounded” assertion of tariff authority. Invoking the “major questions doctrine,” the decision reinforced that significant shifts in policy (especially those with major economic consequences) require explicit congressional consent.

The ruling permanently blocks enforcement of the tariffs and gives the administration ten days to comply. While the White House has pledged to appeal, legal analysts say the court’s arguments are likely to be tested at the Supreme Court, where the doctrine limiting executive authority in major economic matters has gained traction in recent years.

Trade policy in flux

For importers, the court’s decision introduces a temporary reprieve, and a new wave of uncertainty. Cross-border shipments are expected to spike in the coming days, as businesses try to take advantage of the removal of duties before a higher court rules. Canadian exporters, in particular, are expected to see an immediate uptick in trade flows. Goods are already queued at the border.

The decision also casts doubt over ongoing trade negotiations. With the legal foundation of Trump’s tariffs undermined, trading partners may be less inclined to engage in talksnow that the administration’s strategy of unilateral tariff escalation faces procedural and legal constraints. 

While the White House could pivot to other legal tools (such as Section 232 or the 1974 Trade Act) these mechanisms are narrower in scope and require a more structured process. The 1974 law allows temporary tariffs of up to 15% for 150 days in cases of balance-of-payments crises, and longer-term measures require public consultation and investigation.

The administration has indicated it will pursue all legal avenues, but analysts suggest the ruling may prompt a broader rethink of how US trade policy is formulated and enforced. With businesses, state governments, and now the judiciary pushing back, the use of emergency powers as a lever for broad economic policy faces growing institutional resistance.

For now, the ruling introduces a rare moment of legal clarity in what has been a volatile and politically charged trade environment. Whether that clarity holds will depend on how quickly the appellate courts respond, and whether the executive branch chooses to adjust or double down.