US trade court declares tariffs imposed by Trump illegal, sparks backlash

2025-05-29 15:34:00, Kosova & Bota CNA

A landmark ruling by the Court of International Trade in the United States has repealed a significant portion of tariffs imposed during the administration of former President Donald Trump, setting a new precedent on the limits of executive power in the field of international trade.

The ruling, handed down on May 28, considers illegal the former president's use of the International Emergency Economic Powers Act (IEEPA) to impose blanket tariffs on imports of foreign goods, including everyday consumer products.

The court found that such an action violates the US Constitution, as regulating international trade is an exclusive competence of Congress, not the president.

The lawsuit was filed by a group of five small manufacturing businesses and a coalition of 12 US states, which argued that the tariffs imposed through executive orders

Trump's actions had caused huge economic costs and damage to supply chains. The court ordered a review of the policy within 10 days, although Trump's legal team has warned of an immediate appeal of the decision.

According to the Financial Times, the decision does not affect tariffs imposed under other laws, such as those applied to steel and aluminum under Section 232 of the Trade Expansion Act, or those based on national security protections. However, analysts estimate that this decision could significantly limit the scope for unilateral intervention in trade by any future president.

Market reactions were positive. The S&P 500 and Dow Jones industrial averages closed slightly higher, while the dollar strengthened against the euro and yen. As Reuters reported, Wall Street analysts saw the decision as a welcome sign of increased trade stability, but also warned of continued uncertainty as the appeals process continues.

In an FT editorial, the decision is described as a “watershed moment,” one that gives hope to supporters of a rules-based trading order and sends a clear message to the US’s trading partners — that sudden and unilateral tariffs may be temporary, but not sustainable unless they enjoy a solid legal basis.

Politically, the decision has been seen as a challenge to Trump's unilateral and protectionist approach, which during his presidency used executive instruments to impose new trade barriers against China, the European Union and other countries. The current Biden administration has not completely repealed these tariffs, but the latest decision is expected to strengthen calls from the business community to review them more comprehensively./ Monitor Magazine