Federal Court Blocks Most Trump Tariffs

Federal Court Blocks Most Trump Tariffs

U.S. President Donald Trump delivers remarks on tariffs at the White House on April 2, 2025.
U.S. President Donald Trump delivers remarks on tariffs at the White House on April 2, 2025. Carlos Barria/Reuters

Article by CFR.org Editors

May 29, 2025 10:44 am (EST)

U.S. President Donald Trump delivers remarks on tariffs at the White House on April 2, 2025.
U.S. President Donald Trump delivers remarks on tariffs at the White House on April 2, 2025. Carlos Barria/Reuters
Article
Current political and economic issues succinctly explained.

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A New York federal court struck down most of Trump’s tariffs yesterday, ruling that he lacked the authority to impose them. Trump announced plans to appeal and could try to enact new duties using different legal permissions. The ruling also casts uncertainty over recent U.S. trade negotiations with multiple countries. 

The ruling. The Court of International Trade decision ordered the reversal of levies that Trump imposed under the 1977 International Emergency Economic Powers Act (IEEPA), which had never before been used to implement a tariff. 

  • Trump used IEEPA to put tariffs on Canada, China, and Mexico, citing drug trafficking and the fentanyl trade. He also wielded it to impose sweeping “Liberation Day” tariffs on nearly every country around the world on April 2, saying the U.S. trade deficit constituted an unusual and extraordinary threat. Trump had since temporarily paused some of those duties.
  • The court ruled that tariffs on Canada, China, and Mexico did not directly address the purported emergencies and that the trade deficit was not an extraordinary threat. Furthermore, authority over tariffs lies with Congress, it said.

What now? The court gave the Trump administration up to ten days to enact its decision.

  • The White House rejected the ruling, with a spokesperson saying “the Administration is committed to using every lever of executive power to address this crisis” of trade deficits.
  • Not all of Trump’s tariffs were affected by the court’s decision, such as those on steel and aluminum enacted using an authority called Section 232. 
  • It was not immediately clear how the ruling would affect trade talks that are underway or have already yielded partial results, such as those with China and with the United Kingdom. Germany and the European Commission declined to immediately comment.

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“The normal [non-IEEPA] trade tools impose procedural hurdles, so the process tends to take time and thus it is a lot harder to raise the tariff from, say, 20 to 50 percent overnight (without notice and comment, etc). So if the Court of International Trade decision stands, the cadence of trade policy will change (massively so), but tariff threats won't be off the table.”

—CFR expert Brad Setser on X

Across the Globe

German weapons for Ukraine. Germany pledged $5.7 billion in new military support for Ukraine yesterday, including joint production of long-range missiles on Ukrainian soil. German Chancellor Friedrich Merz announced the commitments during Ukrainian President Volodymyr Zelenskyy’s visit to Berlin. Meanwhile, Ukraine said it would meet Russia for a next round of peace talks in Istanbul on June 2, but only if Russia shared a position memo ahead of time.

New U.S. visa scrutiny. The United States will “aggressively revoke” visas for Chinese students, including those linked to the Chinese Communist Party or studying unspecified “critical fields,” Secretary of State Marco Rubio announced yesterday. Applicants from Hong Kong would also be affected. Rubio said earlier in the day that a separate visa restriction policy would target foreign officials who censor the speech of U.S. citizens.

Curbs on tech sales to China. The U.S. government has told some companies to stop shipping chip design software and aviation equipment to China, multiple news outlets reported. The Commerce Department said it is “reviewing exports of strategic significance” and has suspended some export licenses as well as added new license requirements. China’s foreign ministry said the policy threatens to disrupt the stability of global supply chains.

West Bank settlement expansion. Israel’s government approved the establishment of twenty-two settlements in the West Bank, Finance Minister Bezalel Smotrich said today. Some already exist as unauthorized outposts. Israeli Defense Minister Israel Katz said the settlements would prevent “the establishment of a Palestinian state that would endanger Israel,” while a spokesperson for Palestinian Authority President Mahmoud Abbas called the move a “dangerous escalation.” 

Hamas leader in Gaza reported dead. Israel killed Gaza-based Hamas leader Mohammed Sinwar in a strike earlier this month, Israeli Prime Minister Benjamin Netanyahu said yesterday. Israel killed his brother, Yahya Sinwar—one of the architects of the October 7 attack on Israel—last year. Separately, as nascent aid distribution continues in Gaza, a crowd rush on a UN food distribution center wounded several people yesterday and may have killed two of them, a UN agency said.

U.S. security contractor in Haiti. Haiti’s interim government hired former Blackwater head Erik Prince to provide private security services in its fight against gangs, the New York Times reported yesterday. Prince’s services in recent months have helped Haitian forces deploy drones to target gang members, though no high-profile targets have been reported as killed or captured. One human rights worker said the drones have killed two hundred people since March. Prince and the Haitian government did not comment.

Iran weighs inspections. Tehran could permit the UN nuclear watchdog to send U.S. inspectors to monitor its nuclear sites if negotiations with Washington produce a deal, Iran’s nuclear chief said yesterday. He maintained that Iran’s demand to maintain uranium enrichment is a red line in the talks. Separately, Trump told reporters yesterday that he warned Netanyahu that striking Iran would be “inappropriate” while the United States is close to reaching an agreement.

EU plans on water use. A European Union plan would call on countries to reduce their water use by at least 10 percent by 2030 in response to increased droughts, according to a draft seen by the Financial Times. It would be the bloc’s first water efficiency target. Sweden has already banned watering gardens with a hose in some areas, and Greece’s largest water company has warned that Athens could run out of water in two years without a change in policy.

What’s Next

  • Today, early voting begins for South Korea’s snap election.
  • Today, the head of the European Council concludes a visit to Brazil.
  • Tomorrow, the Shangri-La Dialogue defense summit begins in Singapore.
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