The Court of International Trade in Manhattan has ruled against former President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to justify sweeping tariffs, marking a significant legal setback for his administration’s trade policies. The court was unequivocal in ruling the limits of Trump’s authority to impose tariffs. They found that the IEEPA, an obscure 1970s law, does not give him this authority over almost every country. A broad business coalition and several state attorneys general have filed two separate lawsuits against the legality of the tariffs. To that end, this decision was taken.
In 2019, Trump used the IEEPA to impose reciprocal tariffs. This step backfired by increasing duties on Chinese imports to close to 150% and reducing them to only 10% for all other countries. As John Leonard, a former senior official of U.S. Customs and Border Protection (CBP), recently commented, he noted the IEEPA was the legal basis used to impose tariffs on Mexico during the Trump administration. The court’s ruling is critical to understand because it underscores that what Trump did exceeded any authority that could permissibly be granted by the IEEPA.
The tariffs have been harshly criticized from all angles for their detrimental effects on American businesses and consumers. Letitia James, New York Attorney General, stated, “The law is clear: no president has the power to single-handedly raise taxes whenever they like.” She pointed out that these tariffs amounted to a massive new tax on working families and an unnecessary burden on American enterprises. That would have risked worsening inflation and triggering economic recession.
Gregory W. Meeks, the new chair and leading Democrat on the House Foreign Affairs Committee, lambasted Trump’s tariffs in no uncertain terms. He has called them an “illegal abuse of executive power.” He remarked, “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.”
To this day, Trump has sold his tariffs as essential. He thinks they help motivate Americans to purchase products made in America and increase tax dollars collected. He’s optimistic that these measures will trigger even larger investments that create jobs and opportunities in the U.S. economy.
While some officials criticize Trump’s approach, others defend it. Stephen Miller, one of Trump’s closest aides, condemned the ruling as a “judicial coup” and argued that it is “not for unelected judges to decide how to properly address a national emergency.” This gap in perception underscores the continued divide between Americans on trade policy here in the United States.
Importantly, the ruling does not nullify Trump’s steel and aluminum tariffs. Those tariffs would be legal under entirely different framework – known as Section 232. It does strike at the deeper legal underpinnings in which his administration sunk the premised of its myriad trade strategies.
Ilya Somin, co-counsel in the case, celebrated the court’s decision, asserting it “reaffirms that the president must act within the bounds of the law.” He articulated that the ruling clarifies that Trump’s claims of virtually unlimited power to impose tariffs were incorrect and unconstitutional.
Jeffrey Schwab, senior counsel at the Liberty Justice Center, highlighted that “It protects American businesses and consumers from the destabilizing effects of volatile, unilaterally imposed tariffs.” He reiterated the importance of legal accountability to enforce equitable trade practices.
Paul Chan commented on the ruling’s significance, suggesting it could “at least bring President Trump to reason” regarding his approach to trade policy.
As this legal battle continues, the underlying implications of the ruling go much deeper than just tariffs. This illustrates the growing scrutiny of executive power in trade policy. More importantly, it sets a strong precedent for how future administrations should take on big, complex issues.