CNN
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A three-judge panel at the US Court of International Trade, a relatively low-profile court in Manhattan, ruled Wednesday to stop Trump’s global tariffs that he imposed citing emergency economic powers, including his “Liberation Day” tariffs imposed on April 2. It also prevents Trump from enforcing his tariffs placed earlier this year against China, Mexico and Canada, designed to combat fentanyl coming into the United States.
The court ruled in favor of a permanent injunction, grinding Trump’s global tariffs to a halt before “deals” with most other trading partners have even been reached. That means the bulk – but not all – of Trump’s tariffs are put in a standstill.
The order halts Trump’s 30% tariffs on China, his 25% tariffs on some goods imported from Mexico and Canada, and the 10% universal tariffs on most goods coming into the United States. It does not, however, affect the 25% tariffs on autos, auto parts, steel or aluminum, which were subject to Section 232 of the Trade Expansion Act – a different law than the one Trump cited for his broader trade actions.
Stock futures surged on the ruling. Dow futures rose nearly 500 points, or 1.1%. The broader S&P 500 futures were up 1.4%, and Nasdaq futures were 1.6% higher in afterhours trading.
The lawsuit was filed by the libertarian legal advocacy group Liberty Justice Center in April and represented wine-seller VOS Selections and four other small businesses that claimed they had been severely harmed by the tariffs. The panel came to a unanimous decision, publishing an opinion on the VOS suit and also one by twelve Democratic states brought against the Trump tariffs.
“We won – the state of Oregon and state plaintiffs also won,” Ilya Somin, a law professor at Scalia Law School, George Mason University and plaintiff lawyer, said to CNN immediately after the ruling. “The opinion rules that entire system of liberation day and other IEEPA tariffs is illegal and barred by permanent injunction.”
On April 2, Trump announced his “reciprocal” tariffs, imposing significant levies on imports from some of America’s closest trading allies – though he soon after implemented a 90-day pause on April 9. He left in place “universal” 10% tariffs on most goods coming into the United States.
Trump implemented these tariffs without Congress by invoking the International Emergency Economic Powers Act, which gives the president the authority to act in response to unusual and extraordinary threats.
Trump also cited IEEPA in his 20% tariffs on China and 25% tariffs on many goods from Mexico and Canada designed to target fentanyl trafficking into the United States.
But the Trump administration has not met that criteria for an emergency, the plaintiffs alleged. The lawsuit also alleges IEEPA doesn’t give the president the power to enact tariffs in the first place, and even if it was interpreted to, it “would be an unconstitutional delegation of Congress’s power to impose tariffs,” according to a statement.
The court concurred in its ruling that Trump lacked the authority to declare a national emergency in order to impose those tariffs.
“IEEPA does not authorize any of the worldwide, retaliatory, or trafficking tariff orders,” the panel of judges said in their order Wednesday. “The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The trafficking tariffs fail because they do not deal with the threats set forth in those orders.”
The White House did not immediately respond to a request for comment. White House spokesperson Harrison Fields previously said that trade deficits with other countries constitute a “national emergency.”
The Department of Justice lawyers argued that the tariffs are a political question – meaning it’s something that the courts can’t decide.
But the plaintiffs said IEEPA makes no mention of tariffs.
“If starting the biggest trade war since the Great Depression based on a law that doesn’t even mention tariffs is not an unconstitutional usurpation of legislative power, I don’t know what is,” Somin said in April.
Separately, and using similar arguments, twelve Democratic states sued the administration in the same court for “illegally imposing” tax hikes on Americans through the tariffs.
“We brought this case because the Constitution doesn’t give any president unchecked authority to upend the economy. This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Oregon Attorney General Dan Rayfield said in a statement Wednesday.
Lawyers warned that that the government may ask a higher court to block the implementation of the block while they appeal it. The immediate higher court is the federal circuit, though it could potentially go right to the Supreme Court.
The United States Court of International Trade is a federal court in Manhattan that handles disputes over customs and international trade laws.
This is a developing story and will be updated.
