A federal court in the US has struck down the new global tariffs imposed by President Donald Trump, delivering another major setback to his administration after an earlier Supreme Court defeat on the issue.
In a 2-1 ruling on Thursday, theย three-judge panel of the Court of International Trade in New York said the 10 per cent worldwide tariffs were illegal and exceeded the authority granted to the president by Congress.
The court declared the tariffs “invalid”ย and “unauthorised by law”, siding with small businesses that had challenged the measures. However, one judge dissented, arguing that the law gives the president broader powers over tariffs.
What it means
The Trump administration is expected to appeal the ruling. The case would first go to the US Court of Appeals for the Federal Circuit in Washington and could eventually reach the Supreme Court again.
The dispute centres on temporary 10 per cent global tariffs introduced under Section 122 of the Trade Act of 1974 after the Supreme Court, in February, struck down even steeper tariffs Trump had imposed last year on nearly every country. The current tariffs were due to expire on July 24.
The latest ruling directly applies only to three plaintiffs, the state of Washington, spice company Burlap & Barrel, and toy maker Basic Fun!. Legal experts said it remains unclear whether other businesses would still be required to pay the tariffs.
“We fought back today, and we won, and weโre extremely excited,”ย Basic Fun! CEO Jay Foreman said after the verdict.
Blow to Trump administration
The decision marks another legal blow to Trumpโs efforts to protect the US economy through sweeping import taxes.
Last year, Trump had invoked the 1977 International Emergency Economic Powers Act (IEEPA), declaring Americaโs longstanding trade deficit a national emergency in order to justify broad tariffs. However, the Supreme Court ruled on February 28 that the law did not authorise such measures.
Under the US Constitution, Congress has the power to impose taxes and tariffs, though it can delegate limited authority to the president.
Despite the setbacks, Trump is widely expected to pursue alternative ways to reintroduce tariffs. The administration is currently conducting two trade-related investigations that could pave the way for fresh import duties.
One investigation by the Office of the US Trade Representative is examining whether 16 trading partners, including China, the European Union and Japan, are overproducing goods and unfairly hurting American manufacturers.
Another probe is reviewing whether 60 economies, ranging from Nigeria to Norway and accounting for 99 per cent of US imports, are doing enough to prevent the trade of goods made through forced labour.
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