Federal Court Blocks Trump’s Tariffs, Appeals Court to Hear Arguments

A federal court blocked President Donald Trump from levying and enforcing his wide-ranging tariffs under the 1977 International Emergency Economic Powers Act (IEEPA).

Update 5/29: A federal appeals court paused Wednesday night’s ruling. The United States Court of Appeals for the Federal Circuit has ordered both sides in the case to provide written arguments by early next month, which is just days away. This new administrative stay on the ruling means that Trump’s Liberation Day tariffs, which two courts have deemed illegal, are reinstated for now. The original story continues below.

President Trump’s “Liberation Day” tariffs, announced in early April, have been widely criticized and chaotic, with some increasing dramatically in the days following the announcement and others being paused or reduced for upwards of 90 days. It has been extremely challenging for many photo companies, with big players like Sigma, Nikon, Sony, and Leica all having announced price increases in response to the tariffs. Nikon and Sony have also warned investors of potentially massive decreases in operating profit this fiscal year if Trump’s tariffs reached expected levels.

All that may be coming to an end. A three-judge panel at the New York-based U.S. Court of International Trade ruled late Wednesday that the majority of Trump’s tariffs overstepped his authority. The court ruled unanimously in favor of a junction, which brings most — but not all — of Trump’s tariffs to a screeching halt. This applies not only to Trump’s “Liberation Day” tariffs but also to earlier tariffs placed against China, Canada, and Mexico. The order does not impact Trump’s tariffs on automotive, automotive parts, steel, or aluminum, which were enacted under the Trade Expansion Act rather than the Emergency Powers Act.

This ruling, while immediate and technically permanent, is expected to be appealed, which could quickly send the case to the conservative-majority United States Supreme Court, which includes three justices appointed to the bench by President Trump during his first term. The ruling is the result of a lawsuit filed by a group of small business owners in mid-April.

Trump’s use of the International Emergency Economic Powers Act is at the crux of the matter. The law grants the President of the United States far-reaching authority to bypass Congress concerning economic issues, but it requires that the country faces a national emergency. However, IEEPA does not grant the President the power to enact tariffs.

“IEEPA does not authorize any of the worldwide, retaliatory, or trafficking tariff orders,” the panel of judges ruled on Wednesday. “The worldwide and retaliatory tariff orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs. The trafficking tariffs fail because they do not deal with the threats set forth in those orders.”

The ruling further stated that Trump’s tariffs had little to do with the problems they are said to address. The order also noted that American trade deficits are not a sudden or extreme emergency, as the country has had deficits for nearly 50 consecutive years, experiencing both periods of extreme economic growth and expected downturns.

Where Do Trump’s Tariffs Stand Now?

The majority of Trump’s tariffs are immediately and permanently paused. The court has ordered the Trump administration to issue new orders that reflect its ruling within 10 days.

As expected, the White House is displeased.

“It is not for unelected judges to decide how to properly address a national emergency. 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,” said White House spokesperson Kush Desai in a statement.

The Trump administration filed an appeal within minutes of the ruling, questioning the court’s authority.

While President Trump has been posting on Truth Social, he has not written anything concerning the ruling.

“Partners negotiating hard during the 90-day day tariff pause period may be tempted to hold off making further concessions to the U.S. until there is more legal clarity,” former U.S. trade official Wendy Cutler tells Associated Press. Cutler is the vice president of the Asia Society Policy Institute. Cutler added that the decision “throws the president’s trade policy into turmoil.”

Analysts and experts expect a couple of significant developments to occur now.

The Trump administration will, of course, explore all possible avenues to have the ruling overturned, including through the Supreme Court, and seek to restore Trump’s tariffs and his authority to wield them.

Many companies will likely respond to the ruling, including by (hopefully) reverting prices to pre-tariff levels and flooding the U.S. market with as many of their exports as possible to ensure that as much supply as possible reaches the market while tariffs are not in effect.

The price concern is an interesting one — there is no guarantee whatsoever that all companies will reduce prices to pre-tariff levels. It will be fascinating to see how photography companies react to Wednesday’s ruling, especially Sigma, as the company previously said it would increase its prices in the U.S. on June 2 because of the tariffs. That’s just around the corner.

Image credits: Header photo licensed via Depositphotos.