On May 28, 2025, the U.S. Court of International Trade (USCIT) in New York ruled that President Trump exceeded his authority when he imposed tariffs on goods from multiple countries. By blocking both the Worldwide and Retaliatory Tariffs Order and the Trafficking Tariff Order, the court dealt a major setback to the administration’s trade policy. The sections below explain the court’s reasoning and offer commentary on its decision.

Photo Illustration by Victoria Sunday/The Daily Beast/Getty Images.

1. How the Court Had Authority to Block the Tariffs

1.1. USCIT’s Jurisdiction Under U.S. Law

• • 28 U.S.C. § 1581(b): Grants the USCIT exclusive jurisdiction over civil actions “contesting any law of the United States providing for … tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than raising revenue.”
  • Administrative Procedure Act (APA), 5 U.S.C. § 706: Allows courts to “set aside agency action … that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Although the Supreme Court has ruled that the President himself is not an “agency” under the APA – and therefore not directly subject to APA review – the USCIT sidestepped this by naming the subordinate officials who actually carried out the President’s tariff orders. In other words, instead of suing President Trump directly, plaintiffs challenged the implementing agencies and officials.

1.2. Why the Court Rejected the Administration’s Defense

President Trump invoked the International Emergency Economic Powers Act (IEEPA) of 1977, which authorizes the President to regulate commerce once a “national emergency” is declared. The administration argued that persistent U.S. trade deficits qualify as such an emergency. The court disagreed for two main reasons:

1. Tariff Authority Belongs to Congress, Not the President
   • Constitution, Art. I, § 8: Gives Congress the exclusive power to “lay and collect Taxes, Duties, Imposts, and Excises.” In other words, setting tariff rates is Congress’s job.
   • IEEPA’s Text: 50 U.S.C. § 1701 allows the President to “regulate importation” during a declared emergency, but it does not say the President can pick and choose any tariff rates he wants. If it did, it would upend the Constitution’s clear division of powers.
2. Trade Deficits Do Not Meet IEEPA’s “National Emergency” Standard
   • IEEPA requires the President to declare an emergency caused by an “unusual and extraordinary” threat to national security, foreign policy, or the economy – “solely supported” by factors largely outside the U.S.
   • The court noted that U.S. trade deficits have existed every quarter (except one) since mid-1976, making them neither “unusual” nor “extraordinary”.
   • Moreover, the Trade Act of 1974 (15 U.S.C. § 1862(a)) already authorizes a 15 percent tariff for up to 150 days to address “large and serious” balance-of-payments deficits. Because Congress had already covered trade deficits under that Act, declaring them an IEEPA emergency would conflict with the Trade Act’s clear purpose.

2. Commentary on the Court’s Judgment

2.1. USCIT’s Jurisdictional Stretch

• APA’s Scope vs. Presidential Actions: The APA explicitly covers “agency action,” but the President is not an “agency.” By targeting lower-level officials, the USCIT effectively reviewed presidential policy—something the Supreme Court has said is not allowed under the APA.
• Practical Implication: Any major executive policy is carried out by agencies or officials. If courts can always sue those subordinates, then in practice, the President’s actions become fair game, even though Supreme Court precedent says otherwise.

2.2. What “National Emergency” Really Means Under IEEPA

• IEEPA, 50 U.S.C. § 1701: Defines a “national emergency” as an “unusual and extraordinary threat” to national security, foreign policy, or the economy. This threat must “originate in whole or substantial part outside the United States.”
• Historical Context:
  • Most IEEPA emergencies last for years—often decades. For example, the Iran-related emergency declared in 1979 is still in effect today.
  • The court reasoned that trade deficits, which are persistent and longstanding, do not constitute an “unusual or extraordinary” event.
• Political Question Doctrine:
  • Other courts (e.g., when reviewing Reagan’s 1985 Nicaragua emergency) have refused to second-guess a presidential emergency declaration, citing the “political question” doctrine. They recognized that assessing national security threats—like whether Nicaragua posed a sufficient danger—requires expertise and policy judgments better left to the political branches.

Photo by CNN.

2.3. Why IEEPA Does Not Authorize Tariffs

• Major Questions Doctrine: When an executive action has “vast economic and political significance,” courts expect Congress to speak clearly if it intends to delegate that power.
• IEEPA’s Text vs. Tariff Power: IEEPA authorizes the President to “block … regulate, direct and compel… importation.” But it never says “impose or raise tariff rates.” Without an express or implied delegation from Congress, the President’s tariff action under IEEPA conflicts with the constitutional requirement that only Congress may set tariffs.

3. Reactions and Next Steps

3.1. Trump Administration’s Appeal

• Immediately after the USCIT decision, the administration appealed to the U.S. Court of Appeals for the Federal Circuit in Washington, D.C.
• On June 2025, that court stayed (paused) the USCIT’s injunction while it considers the appeal. Plaintiffs must respond by June 5, and the government by June 9.

Political Impact:

• Even before the appeal is decided, other countries will be wary of negotiating under uncertain tariffs. If there is a chance the courts will strike down the tariffs, foreign partners will hesitate to make concessions.
• The administration’s swift appeal shows it is determined to preserve its tariff strategy.

3.2. Possible Alternative Trade Authorities

• Section 232 of the Trade Expansion Act:
  • Permits the President to impose tariffs if imports are found to “threaten to impair national security.”
  • Requires a formal investigation by the U.S. Department of Commerce, which can take several months before a presidential proclamation can issue.
• Likely Outcome:
  • Unless an investigation finds a bona fide national-security risk, unilateral tariff action—even under Section 232—could face legal challenges similar to those under IEEPA.

3.3. Historical Note on Defying Court Orders

• In July 1861 (before the APA existed), President Lincoln effectively ignored a court ruling and explained his actions directly to Congress.
• Takeaway: While it is rare, presidents have at times defied judicial decisions—though doing so raises serious separation-of-powers questions.

In summary, the USCIT concluded that President Trump lacked the authority under IEEPA to impose broad tariffs based on trade deficits alone. By blocking the Executive Orders, the court reaffirmed that tariff-setting is explicitly a Congressional power and that invoking a “national emergency” requires a genuine, extraordinary threat—something trade deficits do not qualify as. The administration’s ongoing appeal means the final outcome is still pending, but this ruling already injects uncertainty into U.S. trade policy and future negotiations.

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