A panel of federal judges delivered a sharp blow this week to President Donald Trump’s aggressive tariff strategy, ruling that several of the duties he imposed exceed his legal authority. The decision, issued by the U.S. Court of International Trade, undermines a central pillar of the president’s trade agenda, which relies on unilateral tariffs to pressure foreign governments into new deals.

As reported by The New York Times, the court found that Trump had overreached by invoking the International Emergency Economic Powers Act of 1977 (IEEPA), a statute originally designed for embargoes and financial sanctions, not for global import taxes.

The ruling stated that the law does not grant the president “unbounded authority” to impose tariffs on virtually every country in the world. As a result, it struck down many of the duties Trump has enacted since taking office in January, including those targeting Canada, Mexico, and China under the pretext of a national emergency.

White House spokesman Kush Desai rejected the decision, claiming in a statement that “it is not for unelected judges to decide how to properly address a national emergency,” and insisted that Trump would continue using “every lever of executive power” to confront the trade crisis.

The administration immediately filed an appeal with the U.S. Court of Appeals for the Federal Circuit. The ruling gives the executive branch 10 days to complete the administrative steps required to suspend the tariffs in question.

Trump had attempted to reshape U.S. trade relations by announcing across-the-board 10% tariffs in April, with higher rates applied to key trading partners like China and the European Union. He also justified the measures by citing the flow of fentanyl into the U.S. and the country’s chronic trade deficit as grounds for emergency action.

But according to The New York Times, a coalition of 12 states, led by Oregon, and numerous import businesses challenged this rationale, arguing that the decades-old trade deficit does not qualify as a national emergency under IEEPA. Lawyers for the plaintiffs described the move as a “power grab,” and said that nothing in the law explicitly authorizes tariffs as a response.

Senior Judge Jane A. Restani, appointed by President Ronald Reagan, expressed skepticism during hearings. When a Justice Department lawyer defended Trump’s actions as necessary to bring partners to the negotiating table, Restani replied: “It may be a very dandy plan, but it has to meet the statute.”

While the court's decision was seen as a win for the plaintiffs, it does not affect tariffs imposed under separate authorities, such as those on steel, aluminum, cars, or proposed levies on pharmaceuticals and semiconductors.

Trade experts quoted by The New York Times warned that Trump still has legal avenues to pursue tariffs, either through other sections of U.S. law or with Congressional support. “This story is not finished,” said trade attorney Ted Murphy, who added that the government could request an emergency stay and initiate new duties under standard procedures.

Markets reacted quickly. Asian stocks rose sharply, and U.S. futures pointed to early gains. European markets were mixed, with London in the red and Paris and Frankfurt climbing.

China seized the opportunity to call for a full rollback. “We urge the United States to heed the rational voices from the international community and domestic stakeholders and fully cancel the wrongful unilateral tariff measures,” said commerce ministry spokeswoman He Yongqian.

The timing of the ruling is especially sensitive, as Trump’s administration is in the middle of negotiations with roughly 18 countries, using the threat of unlimited tariffs as leverage. According to former White House economic adviser Everett Eissenstat, the decision “dramatically impacts near-term dynamics surrounding the president’s tariff and trade agenda.”

With information from AFP