US Court Limits Trump’s Tariff Authority, But Allows Collection to Continue During Appeal

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Court Rules Against Sweeping Tariff Powers

In a significant legal setback to former US President Donald Trump’s trade agenda, the Court of International Trade has ruled that he exceeded his authority by imposing broad-based tariffs under emergency powers. The New York-based court found that the International Emergency Economic Powers Act (IEEPA), a 1977 statute invoked by Trump, does not grant the president unilateral authority to impose import taxes on nearly every trading partner globally.

The three-judge panel emphasized that the US Constitution gives Congress exclusive control over foreign commerce, and that power cannot be bypassed by invoking economic emergency. The ruling stemmed from two separate lawsuits—one filed by the Liberty Justice Center on behalf of small businesses, and another by a coalition of twelve states, including New York, challenging the legality of the sweeping tariffs introduced under Trump’s “Liberation Day” economic measures.

While the court struck down the broader use of emergency powers to impose tariffs, it allowed the existing duties to remain in place temporarily as the Biden administration appeals the ruling.

Tariff Fallout, Business Impacts, and What’s Next

The court also blocked a separate set of tariffs levied on imports from China, Canada, and Mexico, which had been introduced to address illegal immigration and drug trafficking. However, tariffs on specific goods—such as steel, aluminium, and automobiles—were not part of the ruling and remain unaffected.

Reactions have been mixed. Trump criticized the decision on Truth Social, arguing that presidents must retain the power to protect national economic interests. In contrast, New York Attorney General Letitia James welcomed the ruling, stating that “no president has the power to single-handedly raise taxes.”

Although the court’s decision limits Trump’s future tariff options under IEEPA, analysts note he may still leverage other trade laws to reintroduce tariffs if re-elected. The next hearing in the case is scheduled for June 5, and legal experts anticipate a possible escalation to the Supreme Court.

For now, businesses must continue paying tariffs, with refunds only likely if the appeal fails.