A US trade court has blocked Donald Trump’s tariffs from going into effect in what is a significant setback for the US president.
The Manhattan-based Court of International Trade on Wednesday ruled that the US president overstepped his authority by imposing across-the-board duties on imports from nations that sell more to the United States than they buy.
The court said the US Constitution gives Congress exclusive authority to regulate commerce with other countries that is not overridden by the president’s emergency powers to safeguard the US economy.
“The court does not pass upon the wisdom or likely effectiveness of the president’s use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it,” a three-judge panel said in the decision.
The Trump administration minutes later filed a notice of appeal.
The ruling quashes duties that Mr Trump imposed on Canada, Mexico and China separately using those emergency powers.
It came in a pair of lawsuits, one filed by the non-partisan Liberty Justice Center on behalf of five small US businesses that import goods from countries targeted by the duties and the other by 13 US states.
The companies, which range from a New York wine and spirits importer to a Virginia-based maker of educational kits and musical instruments, have said the tariffs will hurt their ability to do business.
The White House and lawyers for groups that sued did not immediately respond to requests for comment.
Stephen Miller, a White House deputy chief of staff and one of Mr Trump’s lead policy advisers, rebuked the court in a brief social media post, writing: “The judicial coup is out of control.”
At least five other legal challenges to the tariffs are pending.
Oregon Attorney General Dan Rayfield, a Democrat whose office is leading the states’ lawsuit, called Mr Trump’s tariffs unlawful, reckless and economically devastating.
“This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim,” Mr Rayfield said in a statement.
Mr Trump has claimed broad authority to set tariffs under the International Emergency Economic Powers Act (IEEPA), which is meant to address “unusual and extraordinary” threats during a national emergency.
The law has historically been used to impose sanctions on enemies of the US or freeze their assets. Mr Trump is the first US president to use it to impose tariffs.
The Justice Department has said the lawsuits should be dismissed because the plaintiffs have not been harmed by tariffs that they have not yet paid, and because only Congress, not private businesses, can challenge a national emergency declared by the president under IEEPA.
Mr Trump unveiled sweeping tariffs on most trading partners on April 2, at a baseline 10 per cent, plus steeper levies on dozens of economies, including China and the European Union. Many of those country-specific tariffs were paused a week later.
The US president had called the trade deficit a national emergency in order to justify his 10 per cent across-the-board tariff on all imports.
The Trump administration on May 12 then said it was temporarily reducing the steepest tariffs on China while working on a longer-term trade deal. Both countries agreed to cut tariffs on each other for at least 90 days.