Court Delivers Blow to Trump's Tariffs

UPDATE - 30.5.25  A Federal Appeals Court has granted the request from the White House to temporarily suspend the US Court of International Trade's decision, pending the appeal.  This decision means that President Trump will not have to remove the baseline tariff rate of 10% as per the original judgement.  The next hearing has reportedly been scheduled for 5th June.

On 28th May the US Court of International Trade deemed that the International Emergency Economic Powers Act of 1977 (IEEPA) “does not authorise any of the worldwide, retaliatory, or trafficking tariff orders.” due to the fact that these orders “any authority granted to the President by IEEPA”. 

This ruling directly impacts Trump’s retaliatory tariffs which included the baseline 10% that was introduced on April 5th, and the follow-up additional tariff measures which impacted 57 countries, and ranged from 11-50% which had initially been paused until 9th July.  To clarify, this judgement does not impact tariffs on automobiles, steel or aluminium.  

The judgement was quickly followed by an appeal by the President to the U.S. Court of Appeals for the Federal Circuit.  Ultimately, the matter could eventually be heard by the U.S. Supreme Court. 

It is important to note that the tariffs do, currently, remain in place so we have seen no immediate change.  However, it adds further unpredictability to not only businesses but also nations around the globe.  For example, the Trump administration has continuingly pushed the need for countries to negotiate with the U.S. prior to the 9th July deadline.  However, countries are now going to be less obliged to do so when the tariffs they are negotiating to be removed/ reduced, may have to be removed anyway due to a court ruling.  

In all likelihood, President Trump will continue to fight the matter and hope to see a judgement in his favour from a higher court.  Another option may be for Trump to shift the legal footing for his retaliatory tariffs. We may see a move away from IEEPA and the use of a different piece of legislation to argue that the President has the authority and power to unilaterally make these decisions.  

Either way, the picture is going to continue to change, and the ruling has added an additional layer of uncertainty for businesses.  This ruling just highlights the pressure that the White House is under, both domestically as well as internationally, to rethink its trade policy.   

This certainly won’t be the end. 

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