In a landmark decision, the US Court of International Trade struck down every tariff President Donald Trump imposed under the International Emergency Economic Powers Act of 1977, ruling that “the Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president’s emergency powers.”
The decision instantly nullifies the so-called “Liberation Day” tariffs announced in early April and every subsequent IEEPA-based order issued since January.
The administration has already filed notice of appeal—but legal experts warn that “presidents cannot simply ignore a federal court’s injunction,” noting that defying the ruling could trigger “the biggest constitutional crisis of the past 70 years.”
If the appeal falters, the White House is poised to pivot to Section 232 of the Trade Expansion Act of 1962, which grants the president unilateral authority to impose import restrictions on national security grounds.
Another alternative is also highlighted: Sec. 338 of the Trade Act of 1930—unused since its enactment—permits tariffs up to 50% on imports from countries that discriminate against the US, albeit requiring no formal investigation.
Markets immediately cheered the prospect of rolling back Trump’s broad tariff threat. S&P 500 futures leapt over 100 points overnight.
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Beyond legal drama, the fiscal fallout could be immense: if upheld, Customs and Border Protection must refund roughly $10 billion in duties collected since April 2—about $3.5 billion owed to China alone.
Observers are making suggestions for the president’s next step, including bringing in Scott Bessent for damage control—“Blame the failure of tariffs on a ‘liberal New York judge’ and get it over with for good.”
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