US trade court nullifies Trump's biggest tariffs

What happened

The federal U.S. Court of International Trade Wednesday struck down President Donald Trump's sweeping tariffs against other countries. The bipartisan three-judge panel unanimously invalidated Trump's fentanyl-related and "Liberation Day" tariffs, and any other import taxes based on the International Emergency Economic Powers Act of 1977. His tariffs on steel, aluminum, cars and other specific industries, levied under a different law, are not affected by the ruling.

Who said what

The 1977 law "does not authorize the president to impose unbounded tariffs," the court said, and Trump's import taxes "exceed any authority granted" him by the law. The judges also agreed with the two sets of plaintiffs — a group of small businesses and 12 states — that trade deficits do not constitute an "unusual and extraordinary threat." No president had previously "sought to invoke" the emergency act "to impose tariffs on other nations," The New York Times said. The law "does not even mention tariffs."

"This ruling reaffirms that our laws matter, and that trade decisions can't be made on the president's whim," said Oregon Attorney General Dan Rayfield, who led the states' lawsuit. The decision "blows a giant hole through Trump's strategy to use steep tariffs to wring concessions from trading partners," Reuters said. That "may be a very dandy plan," Senior Judge Jane Restani, a Ronald Reagan appointee, said in oral arguments, "but it has to meet the statute."

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Wall Street cheered the decision, with the dollar strengthening and Asian markets and U.S. stock futures rising after it was handed down Wednesday evening. The White House immediately filed a notice of appeal. "It is not for unelected judges to decide how to properly address a national emergency," spokesperson Kash Patel said in a statement.

What next?

The New York-based trade court gave the Trump administration 10 days to order a halt to the tariffs. The government may also "have to pay back duties it has already collected," Politico said. The ruling can be appealed to the U.S. Court of Appeals for the Federal Circuit — a specialized court that deals largely with patent and trademark law — and ultimately to the Supreme Court.