A US federal court has blocked President Donald Trump’s sweeping global trade tariffs, in a major blow to a key component of his economic policies.
The Court of International Trade ruled that an emergency law invoked by the White House did not give the president unilateral authority to impose tariffs on nearly every one of the world’s countries.
The New York-based court said the US Constitution gave Congress exclusive powers to regulate commerce with other nations, and that this was not superseded by the president’s remit to safeguard the economy.
The Trump administration said it would appeal within minutes of the ruling.
The ruling was based on two separate cases. The nonpartisan Liberty Justice Center brought one case on behalf of several small businesses that import goods from countries that were targeted by the duties, while a coalition of US state governments also challenged the import taxes.
The two cases mark the first major legal challenges to Trump’s so-called “Liberation Day” tariffs.
A three-judge panel ruled that the International Emergency Economic Powers Act (IEEPA), a 1977 law that Trump cited to justify the tariffs, did not give him the power to impose the sweeping import taxes.
The court also blocked a separate set of levies the Trump administration imposed on China, Mexico and Canada, in response to what the administration said was the unacceptable flow of drugs and illegal immigrants into the US.
However, the court was not asked to address tariffs imposed on some specific goods like cars, steel and aluminium, which fall under a different law.
The White House has criticised the ruling, though Trump has not yet commented directly.
“It is not for unelected judges to decide how to properly address a national emergency,” White House deputy press secretary Kush Desai said in a statement.
“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.
But Letitia James, the attorney general of New York, one of 12 states involved in the lawsuit, welcomed the decision.
“The law is clear: no president has the power to single-handedly raise taxes whenever they like,” Letitia James said.
“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.
Global markets have responded positively to the ruling. Stock markets in Asia rose on Thursday morning, US stock futures also jumped and the US dollar made gains against safe-haven peers, including the Japanese yen and Swiss franc.
