Federal trade court blocks Trump's emergency tariffs

US President Donald Trump

A federal court struck down on May 28 many of the tariffs imposed by US President Donald Trump, describing them as “illegal”.

A three-judge panel at the US Court of International Trade in Manhattan issued its ruling early Wednesday morning, marking a victory for Democratic-led states and a group of small businesses.

In their lawsuit, these companies and states claimed that Trump misused the emergency law to justify the tariffs. However, the Republican President’s administration can still appeal the decision before the federal court.

This ruling is considered one of the biggest legal and political defeats Trump has faced so far, amid a wave of lawsuits challenging the executive orders he has issued since taking office in January.

Global markets witnessed prolonged volatility when Trump announced the blanket tariffs on April 2, wiping out trillions of dollars in market value before recovering weeks later following the suspension of the higher tariffs and the beginning of trade negotiations.

The court ruled that President Trump did not have the authority to impose blanket tariffs on most countries around the world — a decision that nullifies the tariffs that sparked a global trade war and threatened to destabilize the global economy.

In its decision, the court noted that it does not find that the International Emergency Economic Powers Act (IEEPA) confers such absolute authority and nullifies the challenged tariffs imposed thereunder.