Judicial Blow to Trump’s Trade Policy: Powers Overstepped, Says Court

United States President Donald Trump’s aggressive trade policies suffered a significant setback when the U.S. Court of International Trade blocked his administration’s decision to impose tariffs under the controversial “Liberation Day” initiative. The court determined that President Donald Trump had exceeded his constitutional authority in this matter. Notably, the judiciary dismissed the administration’s argument that the tariffs had helped reduce tensions between India and Pakistan.

The Trump administration had intended to impose these tariffs on countries with substantial trade surpluses with the United States. Government lawyers argued that the president held extensive powers under the International Emergency Economic Powers Act (IEEPA), which they claimed allowed him to impose such measures in the face of "unusual and extraordinary threats" during a national emergency. To support their case, the administration cited the U.S. trade deficit with China and the tensions between India and Pakistan.

The legal team contended that following a Pakistan-sponsored terrorist attack in Pahalgam, Jammu & Kashmir, on April 22, and subsequent diplomatic strain, the ceasefire agreement reached between the two nuclear nations in May was partly achieved through President Donald Trump’s use of tariff threats as leverage. They submitted to the court that these actions contributed to de-escalation and requested the judiciary not to interfere with the tariff negotiations, which were at a critical stage and set to conclude by July 7.

However, a three-judge panel in Manhattan decisively rejected the administration’s arguments. The bench ruled that the IEEPA does not grant “unlimited” powers to the president, emphasizing that the act authorizes financial restrictions only under specific, extraordinary threats during emergencies. The court asserted that only the U.S. Congress holds constitutional authority to regulate commerce and protect the American economy, and the president's emergency powers cannot override this mandate.

“The court is not evaluating the wisdom or effectiveness of the president’s use of tariffs as leverage. This decision stems not from a belief that such use is unreasonable or ineffective, but because federal law does not authorize it,” the bench stated. The judiciary further noted that international political developments, such as the India-Pakistan ceasefire, cited by the administration, were not considered relevant to the court’s ruling and were excluded from its legal rationale.

Following the judgment, the Trump administration reportedly filed a notice of appeal. The tariffs, initially announced on April 2, were part of President Donald Trump’s broader objective to revive American manufacturing. The ruling was delivered in response to two lawsuits filed by five small American businesses and thirteen U.S. states, who claimed they were harmed by these tariffs. International observers are viewing the verdict as a significant legal challenge to both Trump’s trade strategies and the broader use of presidential powers.