Federal Court Invalidates Most Trump Tariffs, Impacting Economic Agenda

A federal court, the Court of International Trade (CIT) based in New York, has invalidated most of the tariffs imposed by President Donald Trump, significantly impacting his economic agenda. The CIT ruled that Trump overstepped his authority by using the 1977 International Economic Emergency Powers Act (IEEPA) to justify tariffs on Canada, Mexico, China, and over 50 other nations. Typically handling obscure and technical trade issues, the CIT rarely addresses cases of this magnitude. The court, composed of nine judges, usually handles cases with a single judge, but a three-judge panel considered this challenge due to its broad implications. The decision can be appealed to the Court of Appeals for the Federal Circuit and then to the Supreme Court. The Trump administration has announced its intention to appeal. White House press secretary Karoline Leavitt criticized the ruling, arguing that the court overstepped its authority. However, trade and legal experts believe parts of the CIT’s ruling, particularly those concerning Trump’s 10% universal tariffs and reciprocal tariffs on over 50 countries, are likely to withstand appeal. These tariffs were intended to counter trade deficits, but Congress specified that duties to address trade imbalances must be applied under a different law, which allows a maximum 15% tariff for up to 150 days. Some of Trump’s tariffs on steel, aluminum, and cars remain in place as they rely on separate laws. Economists suggest Trump could re-impose many tariffs under other authorized laws, though this would typically involve a legal process taking several months.