In a stunning rebuke to President Donald Trump’s economic agenda, the U.S. Court of International Trade ruled on May 28, 2025, that his sweeping “Liberation Day” tariffs are illegal, declaring that the president lacked authority to impose blanket duties on all imported goods. The unanimous decision by a three-judge panel, appointed by Presidents Reagan, Obama, and Trump himself, invalidated tariffs enacted under the International Emergency Economic Powers Act (IEEPA), citing a violation of Congress’s exclusive power over commerce. The ruling, a major defeat for Trump’s trade war strategy, sparked a market rally but deepened political divisions as the administration vowed to appeal.
Announced on April 2, 2025, as “Liberation Day,” Trump’s tariffs imposed a 10% universal levy on imports, with rates as high as 54% on Chinese goods and 49% on Cambodian imports, targeting 57 countries. Trump declared a national emergency, claiming a $1.2 trillion trade deficit justified using IEEPA, a 1977 law meant for extraordinary threats. The tariffs, intended to boost U.S. manufacturing and reduce deficits, instead triggered a stock market plunge, with the Dow dropping 1,200 points on April 14, per Bloomberg, and economists warning of stagflation. The Cato Institute labeled them a “recipe for recession,” citing parallels to the 1930 Smoot-Hawley Tariff Act that deepened the Great Depression.
The court’s ruling, prompted by lawsuits from 12 Democratic-led states and five small businesses, including a New York wine importer, found that IEEPA does not grant “unbounded tariff authority.” The judges, including Trump appointee Timothy Reif, wrote, “The Constitution’s express allocation of tariff power to Congress cannot be overridden.” The decision halted the 10% global tariff and higher levies on China, Mexico, and Canada, though industry-specific tariffs on steel, aluminum, and autos under Section 232 of the Trade Expansion Act remain unaffected. Oregon Attorney General Dan Rayfield called the ruling a “victory for working families,” arguing the tariffs inflated prices and disrupted supply chains.
Markets reacted swiftly, with Dow futures jumping 520 points and S&P 500 futures rising 1.4%, reflecting relief among investors. Posts on X, like
@Vic_Turbendian’s, noted the market surge, while
@MDBitcoin hailed the ruling as a “bitch slap” to Trump’s policy. Critics, including Sen. Ron Wyden, celebrated, stating the tariffs “jacked up prices on groceries and cars.” Economists like Joe Brusuelas of RSM US told CNN the decision could shield small businesses from tariff burdens, though global trade talks now face uncertainty.
The White House, defiant, filed an immediate appeal to the U.S. Court of Appeals for the Federal Circuit, with spokesperson Kush Desai arguing, “It’s not for unelected judges to decide how to address a national emergency.” Stephen Miller called the ruling a “judicial coup” on X, while Trump insisted tariffs would restore “American Greatness.” Supporters on X, like
@PamBondiNewsX, echoed his claim that trade deficits decimate communities, citing his 52% “right track” Rasmussen poll rating. Yet, legal experts like Tim Meyer told The Washington Post the case could reach the Supreme Court, where Trump’s 6-3 conservative majority might not guarantee a win, given the Constitution’s clear stance on congressional authority.
The ruling leaves Trump’s trade war in limbo, with fears of inflation and recession eased but his leverage in negotiations weakened. As appeals loom, the decision marks a pivotal challenge to Trump’s economic vision, exposing tensions between executive power and constitutional limits.
