Winning Bizness Desk
Mumbai. A US federal trade court has struck down former President Donald Trump's sweeping tariff order, calling it unconstitutional. Trump had declared April 2, 2025, as ‘Liberation Day’ and imposed new tariffs on goods imported from over 100 countries, claiming they were needed to strengthen the US economy. However, the Manhattan-based Federal Court of International Trade ruled that Trump exceeded his presidential powers and misused the International Emergency Economic Powers Act (IEEPA).
IEEPA misused, says federal bench
A three-judge bench at the trade court concluded that Trump invoked IEEPA without a legitimate national emergency. While the act allows presidents to act during global crises or threats, the court said Trump failed to justify economic emergency conditions necessary for such sweeping trade actions. The judges maintained that the Constitution gives Congress—not the president—exclusive authority to regulate international trade.
Lawsuits from small businesses, importers prompted ruling
Two lawsuits had been filed against the tariffs. One was led by Liberty Justice Center on behalf of five small American businesses, and another by 12 US importers. Both claimed the tariffs severely impacted them by raising the cost of imported goods. The court accepted their arguments and noted that the president lacked constitutional authority to impose tariffs at such a broad level without Congressional consent.
Trump administration to appeal the decision
The Trump administration responded by announcing plans to appeal the verdict. On his social media platform, Trump defended the tariffs, saying they were vital to “Make America Great Again.” The court, however, hinted that under Section 122 of the Trade Act of 1974, the president may impose limited tariffs (up to 15% for 150 days) if certain conditions are met, but emphasized that any such action must have a solid legal foundation.
Global trade impact and WTO concerns
The court’s ruling is likely to ease tensions in global markets. The World Trade Organization (WTO) had earlier warned that Trump's tariff policies could reduce global trade by up to 81%. The US court’s decision is expected to slow down this risk. Meanwhile, the earlier 90-day deferral Trump had offered on some tariffs now appears even more uncertain in light of the judgment.
Tariff specifics: Focus on China, India, and others
Initially, Trump had excluded China from the 90-day deferral, raising tariffs on Chinese imports up to 145%. Later, even China was offered some relief following trade talks. Trump had also targeted India, accusing it of imposing up to 52% tariffs on US goods. In response, he announced a 26% US tariff on Indian imports. He stated that tariffs wouldn’t be fully reciprocal but aimed to level the playing field in trade.
Understanding tariffs and reciprocal trade
A tariff is a tax imposed on imported goods. For instance, a Tesla Cybertruck priced at Rs 90 lakh in the US could cost nearly Rs 2 crore in India if a 100% tariff is applied. Reciprocal tariffs aim to balance import taxes between countries. Trump argued that the US should impose tariffs roughly half of what other nations charge the US, which, he said, was a fairer approach, though not strictly equal.
Key Highlights of the Story:
Trump’s April 2 tariff announcement targeted over 100 countries, calling it “Liberation Day.”
The Federal Court of International Trade declared the order unconstitutional.
Court ruled Trump misused IEEPA and exceeded his presidential powers.
Lawsuits by small US businesses and importers led to the judicial review.
Trump vowed to appeal, defending the move as essential for national growth.
WTO had warned of massive global trade drop due to such tariff policies.
India and China were among the countries most affected by the proposed tariffs.
