A federal trade court in Manhattan, the United States Court of International Trade, issued a landmark ruling on Wednesday, blocking President Donald Trump’s sweeping “Liberation Day” import tariffs from taking effect.

The court determined that the President had exceeded his authority by imposing broad-based duties on imports from countries that export more to the United States than they import, a move that Trump justified using the International Emergency Economic Powers Act (IEEPA).

The IEEPA is designed to grant the president powers to address “unusual and extraordinary” threats during a national emergency, but the court found that these powers do not extend to the unilateral imposition of global tariffs.

The three-judge panel emphasised that the U.S. Constitution vests Congress, not the president, with the exclusive authority to regulate commerce with foreign nations. This constitutional division of powers cannot be overridden by the president’s emergency authority to safeguard the American economy.

The court explicitly rejected the Trump administration’s argument that the IEEPA provided “unbounded” or unlimited authority to impose tariffs, stating that any such interpretation would be unconstitutional. The judges highlighted that while the IEEPA permits the president to impose necessary economic sanctions in response to genuine emergencies, it does not authorise sweeping tariff measures unrelated to specific threats.

The administration had argued before the court that the legal challenge could disrupt delicate trade negotiations, including ongoing efforts to broker truces with China and even to influence the geopolitical situation between India and Pakistan.

Specifically, officials claimed that Trump had leveraged his tariff authority to help broker a ceasefire between India and Pakistan following a terror attack in Jammu and Kashmir’s Pahalgam in April.

The court, however, rejected these arguments, ruling that the president’s use of tariffs as leverage—regardless of its wisdom or effectiveness—was impermissible under federal law. The judges underscored that “an unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government”.

The ruling was the result of two major lawsuits: one filed by the non-partisan Liberty Justice Center on behalf of five small U.S. businesses importing goods from countries affected by the tariffs, and another by a coalition of 13 U.S. states.

The affected businesses, which range from a New York wine and spirits importer to a Virginia-based producer of educational kits and musical instruments, had argued that the tariffs would severely harm their operations. Additionally, at least five other legal challenges to the tariffs remain pending in courts.

President Trump had unveiled the “Liberation Day” tariffs on April 2, targeting the United States’ largest trading partners with a baseline 10% duty and higher rates for countries with the biggest trade deficits, such as China and the European Union. Many of these tariffs were paused shortly after their announcement due to market volatility, and the administration later announced a temporary reduction in steepest tariffs on China while negotiating a longer-term trade deal.

In response to the court’s decision, the Trump administration swiftly filed a notice of appeal. The White House and legal representatives for the plaintiffs did not immediately respond to requests for comment, but Stephen Miller, a senior White House adviser, criticised the ruling in a social media post as a “judicial coup,” reflecting the administration’s frustration with the judicial rebuke.

The court’s ruling is significant not only for its immediate impact on U.S. trade policy but also for reaffirming the constitutional principle that Congress, not the president, holds ultimate authority over the regulation of foreign commerce. The decision underscores that even in times of perceived national emergency, the executive branch may not unilaterally rewrite trade laws or impose sweeping tariffs without explicit congressional authorisation.

Agencies