Federal Courts Rule to Overturn Trump’s Unilateral Tariffs
States and small businesses filed lawsuits to overturn Trump’s tariffs, saying he has no authority to implement them without approval from Congress. The U.S. Court of International Trade Agrees.
NEW YORK — The U.S. Court of International Trade has ruled to block President Donald Trump’s unilateral implementation of tariffs on May 28.
The courts ruling stated that the emergency authority claimed by Trump in the April 2 executive order that imposed the tariffs exceeded the legal authority of the executive branch. It also mandated that any duties collected since the imposition of the tariffs have to be repaid.
“The law is clear: no president has the power to single-handedly raise taxes whenever they like,” said New York Attorney General Letitia James in response to the ruling. “These tariffs are a massive tax hike on working families and American businesses that would have led to more inflation, economic damage to businesses of all sizes, and job losses across the country if allowed to continue.” James added, “This decision is a major victory for our efforts to uphold the law and protect New Yorkers from illegal policies that threaten American jobs and economy.”
However, the Justice Department has already filed an appeal to the ruling, meaning that legal arguments regarding Trump’s tariff authority aren’t going away anytime soon.
The ruling comes in response to two separate lawsuits that were filed by a coalition of states and small businesses, which argued that Trump lacks the authority to implement tariffs without congressional approval.
James announced on April 23 that New York and 11 other states filed a lawsuit in the U.S. Court of International Trade, arguing that Trump overstepped his legal authority by using emergency powers to unilaterally impose what amounts to a massive tax hike on consumers.
The lawsuit brought by the coalition of state attorneys generals was filed a week after a separate lawsuit filed by a coalition of small businesses, which also sought a court order to overturn Trump’s “Liberation Day” tariffs, which imposed a blanket 10% tariff on imports from nearly every country, with tariff rates as high as 145% on Chinese goods.
While the White House temporarily paused the elevated tariff rates on April 9, the base tariffs remain in place, and plaintiffs argue the damage for small businesses and consumers is already done. Additionally, on May 23 Trump threatened to impose a 50% tariff on the European Union (EU) on June 1, only to reverse course two days later.
The inconsistency of Trump’s tariff policy has led to critics branding it as “TACO Trade.” The TACO stands for “Trump Always Chickens Out,” and the term was coined in response to the pattern of Trump announcing high tariffs on countries that send markets into a nosedive — only to then pause or lower those tariffs causing markets to rebound.
These fluctuations in global trace policy have helped some elites game the system through insider trading, but small businesses and working-class Americans have been hit with higher costs for basic goods. According to the Yale Budget Lab, Trump's tariffs could cost the average household up to $4,400.
“Donald Trump promised that he would lower prices and ease the cost of living, but these illegal tariffs will have the exact opposite effect on American families,” said James. “The president does not have the power to raise taxes on a whim, but that’s exactly what President Trump has been doing with these tariffs.”
The lawsuits argued, and the court agreed that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify the tariffs was unlawful. They say that the IEEPA, which was enacted in 1977 to limit presidential power during national emergencies, does not authorize the executive branch to unilaterally implement tariffs, nor does it permit the president to declare a national emergency based on routine trade conditions.
“The President has no authority under IEEPA to issue the tariffs,” the lawsuits stated. “IEEPA does not even mention tariffs.” The lawsuits further argue that there must be a genuine, extraordinary threat — something far more urgent than the long-standing U.S. trade deficit cited in the executive order — to impose tariffs. “The national emergency the President has declared — the existence of bilateral trade deficits with some countries — is not an emergency, nor is it unusual or extraordinary,” the filing reads.
The Liberation Day Order cites trade deficits and fentanyl imports as justification for invoking emergency powers. However, the plaintiffs note that the U.S. has run a trade deficit in goods with many countries for decades and that this economic condition alone does not meet the legal threshold for an “unusual and extraordinary threat” required under IEEPA.
“To refer to a state of affairs in existence for five decades as an ‘emergency,’ much less an ‘unusual and extraordinary threat,’ is to defy any reasonable understanding of the ordinary meaning of these common words,” the lawsuit states.
The lawsuit goes on to accuse Trump of using IEEPA to grab powers that belong to Congress, calling it an unconstitutional violation of the nondelegation doctrine. “If IEEPA allows the President to impose immediate worldwide tariffs at any rate, at any time, then it allows almost anything,” the lawsuit states. “Delegating this unreviewable, standardless discretion to the executive with no oversight endangers our economy, and ultimately the liberty guaranteed to each of us as citizens.”
While the U.S. Constitution grants Congress exclusive authority to impose tariffs and regulate international trade, some have argued that Congress has abdicated that role in recent months.
The continuing resolution (CR) passed in March to avoid a government shutdown included a provision tucked into the GOP-led House spending plan that effectively ceded tariff authority to the executive branch. The same bill also imposed a procedural rule blocking a vote on a resolution that would have allowed Congress to terminate Trump’s emergency declaration and reassert its constitutional powers over trade.
While Democrats like Elizabeth Warren and Bernie Sanders and even some Republicans like Rand Paul have advocated for Congress to reassert its authority over trade policy, the CR that ceded authority to the executive passed with the support of six Democrats in the Senate, including Chuck Schumer.
With both parties in Congress refusing to act to uphold their authority over trade policy the fight against Trumps unilateral imposition of tariffs is unfolding in the court system — and despite this court ruling the fight is not stopping anytime soon.