As Expected, Federal Trade Court Blocks Trump From Imposing Tariffs Under Emergency Powers Law

A federal court on Wednesday blocked President Donald Trump from imposing tariffs on imports under an emergency declaration, upending, for now, his ambitious economic agenda.

The ruling was not unexpected, as a very knowledgeable source told American Greatness two weeks ago that the fix was in at the United States Court of International Trade (USCIT) in lower Manhattan.

The president declared a national emergency in his April 2 executive order imposing a set of reciprocal tariffs, calling trade deficits a threat to the nation’s national security and economy. Last month, five domestic businesses filed a lawsuit in the little known trade court in New York challenging Trump’s “Liberation Day” tariffs, arguing he had exceeded his authority.

A three-judge panel at the USCIT heard arguments in the case earlier this month, and reportedly “appeared skeptical” of the president’s arguments.

According to the well-placed source, rather than drawing the panel at random, Chief Judge Mark Barnett, an Obama appointee, “fixed” the outcome by selecting three judges whom he knew would “overrule the president” and render his tariffs “null and void.”

“We are living under a judicial tyranny,” White House Deputy Chief of Staff for Policy Stephen Miller commented on X Thursday, in response to the ruling.

The three judges selected to hear the case were Judge Gary S. Katzmann, an Obama appointee; Judge Timothy M. Reif, a Democrat appointed by Trump in 2019; and Senior Judge Jane A. Restani, appointed by President Reagan in 1983.

The same panel also heard arguments in a parallel case brought by a dozen state attorneys general on May 21.

“The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the judges wrote in their decision.

The International Emergency Economic Powers Act (IEEPA), enacted in 1977, authorizes the President to regulate economic transactions when declaring a national emergency, including sanctions and economic embargoes.

The Trump administration has already filed notice of appeal in the United States Court of Appeals for the Federal Circuit in Washington D.C.  Further appeals could then be taken to the Supreme Court of the United States.

According to the Associated Press, the court’s ruling “left in place any tariffs that Trump put in place using his Section 232 powers from the Trade Expansion Act of 1962.”

He put a 25 percent tax on most imported autos and parts, as well as on all foreign-made steel and aluminum. Those tariffs depend on a Commerce Department investigation that reveals national security risks from imported products.

The AP reports that Trump may “still be able to temporarily launch import taxes of 15 percent for 150 days on nations with which the U.S. runs a substantial trade deficit.” The judges note that presidents have this authority under Section 122 of the Trade Act of 1974.

The president’s tariffs are central to his economic agenda and designed to reduce the trade deficits between the United States and other world powers.

Trump has repeatedly said the tariffs would force manufacturers to bring back factory jobs to the U.S. and generate enough revenue to reduce federal budget deficits. He used the tariffs as a negotiating cudgel in hopes of forcing other nations to negotiate agreements that favored the U.S., suggesting he would simply set the rates himself if the terms were unsatisfactory.

White House spokesperson Kush Desai responded to the ruling in a statement Thursday, insisting that America’s trade deficits have devastated our economy and amount to a national emergency.

Foreign countries’ nonreciprocal treatment of the Unites States has fueled America’s historic and persistent trade deficits. These deficits have created a national emergency that has decimated American communities, left our workers behind, and weakened our defense industrial base — facts that the court did not dispute. It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness.”

Desai added that the administration remains “committed to using every lever of executive power to address this crisis and restore American Greatness.”

In a separated case Thursday, another Obama-appointed federal judge issued a preliminary injunction blocking Trump’s tariffs, ruling they are unlawful under the IEEPA.

US District Judge Rudolph Contreras said his preliminary injunction only applies to the two companies that filed suit, however, his ruling is likely to open the door to more widespread injunctions.

Trump is facing at least seven lawsuits challenging his tariffs.

Update:

White House Press Secretary Karoline Leavitt commented on the trade court’s ruling during the White House Press briefing, Thursday.

“Last night, the Trump Administration faced another example of judicial overreach,” Leavitt said. “These judges are threatening to undermine the credibility of the United States on the world stage.”

“Ultimately, the Supreme Court must put and end to this, for the sake of our Constitution and our country,” she added.

Update:

The federal appeals court has granted a pause on the lower court’s ruling, preserving Trump’s sweeping tariffs on China and other U.S. trading partners—for now.

Via the New York Times:

In a filing submitted Thursday, the Justice Department said the new order invalidating its claims of sweeping trade powers was “rife with legal error.” The government warned it would hamstring Mr. Trump’s efforts “to eliminate our exploding trade deficit and reorient the global economy on an equal footing.”

The appeals court ultimately intervened, and while it did not rule directly on the government’s request or the merits of Mr. Trump’s tariffs, the panel still temporarily spared the administration from having to halt the levies it has used as political leverage in dozens of trade negotiations.

In effect, it means that Mr. Trump can, for now, maintain many of the tariffs he has imposed on China, Canada and Mexico and preserve the threat of “reciprocal” rates, which he announced on most nations and then suspended in early April. But it is not the final word in the legal saga, which is expected to land at the Supreme Court.