Court Halts Trump's Tariff Policy, Citing Constitutional Limits

The United States Court of International Trade in Manhattan ruled on May 28 to halt the implementation of President Trump's tariff policy announced on April 2, "Liberation Day." The court determined that Trump had overstepped his authority by imposing a 10% minimum tariff on all trading partners and higher tariffs on certain countries. This decision marks the first significant legal challenge to Trump's tariff policies, initiated by the non-profit, non-partisan legal organization Public Justice Center on behalf of five small U.S. businesses affected by the tariffs.

The lawsuit, filed by the Public Justice Center, argued that Trump's tariff policy was unlawful and reckless, causing economic harm. The court agreed, stating that the U.S. Constitution grants Congress the power to regulate trade with other nations, and the president's claimed emergency powers do not supersede these constitutional rights. The court's decision underscores the delicate balance between executive power and legislative authority in trade policy. It also highlights the potential economic repercussions of unilateral tariff actions, which can disrupt global trade dynamics and provoke retaliatory measures from other nations.

The ruling serves as a reminder that trade decisions must adhere to constitutional principles and legal frameworks, ensuring that economic policies are implemented in a manner that respects the rule of law and promotes stability in international trade relations. The court's decision was based on the interpretation of the International Emergency Economic Powers Act (IEEPA), which was enacted in 1977. This law grants the president broad emergency powers to regulate foreign trade in response to "unusual and extraordinary" threats to national security or the economy. However, the law does not explicitly authorize the president to impose tariffs.

The plaintiffs argued that Trump did not have the authority to implement these tariffs. The non-partisan legal organization Public Justice Center's lawyers stated in the lawsuit that the IEEPA does not mention tariffs and pointed out that the U.S. trade deficit has persisted for decades without causing economic harm, indicating no emergency situation. The plaintiffs asserted that Congress cannot arbitrarily delegate legislative powers to the president. "If there are any constitutional limits on the authorization, this case applies—the executive branch claims to have nearly unlimited power to impose massive tax increases and launch a global trade war," the lawsuit stated.

The United States Court of International Trade has jurisdiction over tariff and trade disputes nationwide, but its operations have largely remained outside the public eye. The court's decision can still be appealed by the Trump administration to the United States Court of Appeals for the Federal Circuit in Washington, D.C., and ultimately to the United States Supreme Court. It is reported that the Trump administration has submitted a notice of appeal after the federal court halted the trade measures.

Regardless, Trump's defeat in the United States Court of International Trade is likely to disrupt much of his trade agenda and influence the negotiation strategies of other countries with the United States. Even if Trump is ultimately prevented from using the IEEPA to levy taxes, he may still resort to other regulations to achieve similar goals. However, it is unlikely that any other regulation will provide the same level of unlimited and broad authority that he claimed.