In a major blow to a key part of President Donald Trump’s economic policy, a US federal court has blocked a sweeping set of tariffs he imposed, ruling that he exceeded his legal authority.
The decision by the Court of International Trade strikes down key trade measures that were central to Trump’s "America First" agenda, reports BBC.
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The court, based in Manhattan, found that the emergency law cited by Trump — the International Emergency Economic Powers Act (IEEPA) of 1977 — does not authorise the president to unilaterally impose broad tariffs on nearly every country.
The ruling emphasised that the US Constitution grants Congress exclusive powers to regulate international commerce, which cannot be overridden by the executive branch under the pretext of economic safeguarding.
Within minutes of the decision, the Trump administration filed an appeal. The ruling also blocks a separate set of levies targeting China, Mexico, and Canada, which the administration reintroduced after returning to the White House, citing concerns over drug trafficking and illegal immigration.
"It is not for unelected judges to decide how to properly address a national emergency," White House deputy press secretary Kush Desai said in response.
"President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness," he added.
The lawsuit, spearheaded by the Liberty Justice Center on behalf of five small businesses that import goods from countries affected by the tariffs, marks the first major legal challenge to what the administration called "Liberation Day" tariffs.
Twelve US states, including New York, supported the legal challenge.
"The law is clear: no president has the power to single-handedly raise taxes whenever they like," said New York Attorney General Letitia James.
"These tariffs are a massive tax hike on working families and American businesses that would have led to more inflation, economic damage to businesses of all sizes, and job losses across the country if allowed to continue," she added.
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In its decision, the three-judge panel stated that Trump’s tariff orders exceeded the authority granted by the IEEPA.
"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 panel wrote.
The ruling is one of seven ongoing legal challenges against the Trump administration’s trade policies, including actions brought by 13 US states and various small business groups.