New York: A split three-judge panel of the United States Court of International Trade has ruled that former US President Donald Trump exceeded his authority in imposing temporary global tariffs, declaring the measures “invalid” and “unauthorised by law”.
The 2-1 ruling delivered by the court in New York stated that the 10 per cent worldwide tariffs imposed by the Trump administration under Section 122 of the Trade Act of 1974 were illegal.
According to the majority opinion, the authority exercised by the former president went beyond the tariff powers delegated by the US Congress under the law.
The court observed that the Constitution grants Congress the authority to impose taxes and tariffs, although limited powers can be delegated to the president under specific legal provisions.
However, one judge on the panel dissented from the ruling and argued that the law provided the president with broader authority to impose tariffs under certain circumstances.
Case centred on temporary 10 per cent tariffs
The legal dispute focused on temporary worldwide tariffs introduced by the Trump administration after the Supreme Court of the United States struck down broader double-digit tariffs earlier this year.
In February, the Supreme Court ruled that the administration could not rely on the International Emergency Economic Powers Act (IEEPA) of 1977 to justify sweeping tariffs imposed on nearly every country.
Following that setback, the administration invoked Section 122 of the Trade Act of 1974 to impose revised temporary tariffs of 10 per cent globally.
The tariffs were scheduled to remain in effect until July 24.
The administration had argued that the measures were necessary to address long-running trade imbalances and protect American manufacturing interests.
However, critics contended that the tariffs exceeded executive authority and imposed unnecessary financial burdens on businesses and importers.
Small businesses challenged tariff measures
The latest court challenge was brought forward by small businesses and importers affected by the tariff policy.
The ruling directly blocked tariff collection from three plaintiffs — the state of Washington, spice company Burlap and Barrel, and toy manufacturer Basic Fun!.
Basic Fun! CEO Jay Foreman welcomed the ruling and described it as a major victory for businesses challenging the tariffs.
“We fought back today, and we won, and we’re extremely excited,” Foreman told reporters after the judgment.
Jeffrey Schwab, litigation director at the Liberty Justice Center, which represented the two companies, said uncertainty remained over whether other businesses would continue paying the tariffs.
Trade experts said the ruling could encourage additional legal challenges and refund claims from importers affected by the measures.
Trade lawyer Dave Townsend noted that other importers may now seek broader legal remedies that extend beyond the current plaintiffs.
Trump administration expected to appeal ruling
The Trump administration is expected to challenge the ruling through an appeal process beginning at the United States Court of Appeals for the Federal Circuit in Washington.
Legal experts believe the dispute could eventually return to the Supreme Court for a final decision.
The ruling marks another legal setback for Trump’s trade policy, which relied heavily on tariffs as a central economic and political strategy during his presidency.
Despite the court decision, US trade authorities are continuing to explore alternative tariff and trade enforcement measures.
Officials from the Office of the United States Trade Representative are reportedly investigating whether 16 trading partners, including China, the European Union and Japan, are overproducing goods and harming American manufacturers by lowering market prices.
Authorities are also reviewing whether 60 economies accounting for nearly 99 per cent of US imports are taking adequate steps to prevent trade involving goods allegedly produced through forced labour.
The ongoing legal and policy battles underscore continuing divisions in the United States over trade policy, executive authority and the economic impact of tariffs on businesses and consumers.