The United States Court of International Trade delivered a significant blow to President Donald Trump’s sweeping tariff program on Wednesday, May 28, 2025, ruling that the administration exceeded presidential authority in imposing global trade levies. However, the Trump administration quickly secured temporary relief from an appeals court on Thursday.
A three-judge panel at the New York-based court ruled that Trump’s tariff orders “exceed any authority granted to the president” under the International Emergency Economic Powers Act. The court issued a permanent injunction blocking the 10 percent global tariff, additional duties on China, Canada and Mexico, and reciprocal tariffs implemented through emergency powers.
The original ruling gave the White House 10 days to halt tariff collection operations and issue administrative notices regarding the permanent injunction. However, on Thursday afternoon, the U.S. Court of Appeals for the Federal Circuit granted the administration’s request for an emergency stay, allowing the tariffs to remain in place while the appeal proceeds. Plaintiffs are required to respond to the government’s motions by June 5, 2025.
Multiple lawsuits challenging the tariffs were consolidated before the trade court, with plaintiffs including several states and small businesses. Illinois toy importers were among those who successfully argued that Trump overstepped his authority by claiming trade deficits constituted a national emergency justifying sweeping tariffs.
White House Press Secretary Karoline Leavitt characterized the initial ruling as judicial overreach, stating that judges had brazenly abused their power to usurp presidential authority. She indicated the administration would take the case to the Supreme Court if necessary. White House economic adviser Kevin Hassett told Fox News that three trade deals were nearly completed despite the court ruling.
The court’s decision specifically targeted tariffs imposed under the IEEPA, a 1977 law designed to address unusual and extraordinary threats during national emergencies. Trump had invoked this statute to bypass congressional approval typically required for tariffs, allowing him to implement sweeping trade levies across most countries.
Financial markets responded positively to the initial court ruling. Asian markets climbed Thursday, with Japan’s Nikkei 225 index rising 1.9 percent, Hong Kong’s Hang Seng gaining 1.1 percent, and South Korea’s Kospi advancing 1.8 percent. European markets also rallied, with Germany’s Dax climbing 0.9 percent and France’s Cac 40 rising one percent.
The ruling did not affect all of Trump’s trade policies. Tariffs on automobiles, steel and aluminum products remain in place because they were implemented under Section 232 of the Trade Expansion Act, which addresses national security concerns. The court also did not address industry-specific tariffs imposed under different statutory authorities.
Economists at Goldman Sachs noted that the administration has several alternative legal pathways to reimpose tariffs. Options include Section 122 of the Trade Act of 1974, which could allow up to 15 percent tariffs for 150 days without congressional approval, and Section 301 investigations targeting specific trading partners, though these processes would require several weeks to implement.
Legal experts indicated the speed of the administration’s appeal was unusual and suggested officials worked through the night to prepare emergency motions. Trade lawyer Michelle Schulz noted that alternative tariff mechanisms would require investigations by the Commerce Department and other agencies, potentially taking months to complete.
The court ruling also affected Trump’s elimination of the de minimis exemption for imports from China and Hong Kong, which was implemented under the same emergency powers authority. Plans to extend this policy to other countries are now in question pending the appeals process.
Deputy Chief of Staff Stephen Miller criticized the decision on social media, claiming “the judicial coup is out of control.” White House spokesperson Kush Desai argued that unelected judges should not determine how to address national emergencies.
A separate Washington D.C. district court judge also ruled against the tariffs in a related case brought by Illinois toy importers, issuing a preliminary injunction on tariff collection. This represents the first federal court opinion to substantially address constitutional challenges to Trump’s emergency tariff authority.
The legal battle highlights tensions between the executive branch and federal courts over presidential trade authority. The case may ultimately reach the Supreme Court, which would determine the constitutional limits of presidential emergency powers in trade policy.