Federal Court Overturns Trump’s Recent Tariffs Following Supreme Court Defeat
In a significant legal development, a federal court has invalidated the global tariffs imposed by former President Donald Trump after the Supreme Court handed him a notable defeat. The Court of International Trade in New York, in a split decision, ruled against the 10% tariffs that targeted international markets.
The three-judge panel ruled 2-1 that President Trump had exceeded the authority granted to him by Congress under the existing trade laws. The majority opinion stated that the tariffs were “invalid” and “unauthorized by law.” However, one judge dissented, arguing that the president had broader discretion to impose such tariffs.
Should an appeal be pursued, the case would first be heard by the U.S. Court of Appeals for the Federal Circuit in Washington, and potentially reach the Supreme Court afterward.
These tariffs, which were temporary and global, were introduced following a Supreme Court decision in February that struck down broader tariffs Trump had previously imposed. The new tariffs were established under Section 122 of the Trade Act of 1974 and were set to expire on July 24.
The court’s ruling specifically stopped tariff collections from three plaintiffs: the state of Washington and two businesses, Burlap & Barrel, a spice company, and Basic Fun!, a toy company. Jeffrey Schwab, director of litigation at the Liberty Justice Center, which represented the businesses, noted that it remains uncertain whether other businesses will have to continue paying the tariffs.
Jay Foreman, CEO of Basic Fun!, expressed his satisfaction with the decision, saying, “We fought back today and we won, and we’re extremely excited.”
This decision is another legal hurdle for Trump’s administration, which aimed to protect the U.S. economy with tariffs. Previously, Trump had invoked the 1977 International Emergency Economic Powers Act (IEEPA) to label the U.S. trade deficit a national emergency, justifying the tariffs.
The Supreme Court, however, ruled that the IEEPA did not permit these tariffs. While Congress holds the constitutional power to impose taxes, including tariffs, it can delegate this authority to the president.
Trade lawyer Dave Townsend from Dorsey & Whitney indicated that this ruling might encourage more companies to seek the nullification of tariffs and the reimbursement of payments. He cautioned that the case still has the potential to escalate to the Supreme Court.
Meanwhile, Trump is exploring new tariff strategies following the Supreme Court’s January decision to strike down earlier tariffs. The administration is conducting investigations that could lead to further tariffs.
The U.S. Trade Representative’s Office is examining whether 16 trading partners, including China, the European Union, and Japan, are overproducing goods, thereby lowering prices and disadvantaging U.S. manufacturers. Additionally, it is investigating if 60 economies are adequately preventing the trade of goods made with forced labor.
