A major legal setback hit Donald Trump after a federal trade court in New York City ruled that key global tariffs imposed during his administration were not authorised under US law.
In a divided 2-1 decision, a three-judge panel of the United States Court of International Trade said the Trump administration had exceeded the tariff powers granted to the president by Congress.
The majority opinion described the tariffs as “invalid” and “unauthorised by law,” while one judge dissented, arguing that the law provided broader emergency powers to the president on trade matters.
Court Examined 10% Worldwide Tariffs
The case focused on temporary 10 per cent tariffs that had been imposed globally after an earlier round of broader Trump tariffs was struck down by the Supreme Court of the United States earlier this year.
The Trump administration had relied on Section 122 of the Trade Act of 1974 to continue the tariffs, which were set to remain in effect until July 24.
However, small businesses challenged the move in court, arguing that the administration had overstepped its authority.
Small Businesses Celebrate Victory
The ruling directly stopped tariff collection involving three plaintiffs, including the state of Washington, spice company Burlap and Barrel, and toy manufacturer Basic Fun!.
Jay Foreman welcomed the decision and said businesses had finally pushed back successfully against the tariff policy.
Legal representatives for the companies also said the judgment could encourage more importers and businesses to challenge the tariffs and seek refunds.
Earlier Supreme Court Decision Played Key Role
The dispute is linked to Trump’s earlier attempt to use the International Emergency Economic Powers Act to justify sweeping tariffs by declaring America’s trade deficit a national emergency.
In February, the Supreme Court ruled that the law did not grant the president such broad tariff authority.
Under the US Constitution, the power to impose taxes and tariffs primarily belongs to Congress, although lawmakers can delegate limited authority to the president under specific conditions.
Trump Team Expected To Appeal
The Trump camp is expected to challenge the latest ruling through the appeals process.
The case will likely move to the United States Court of Appeals for the Federal Circuit in Washington, D.C. and could eventually return to the Supreme Court.
Despite the legal setback, US trade officials are reportedly exploring alternative tariff measures involving major trading partners such as China, the European Union and Japan.
