NEW YORK (Diya TV) — A federal court has delivered a major blow to former President Donald Trump’s trade agenda, ruling that he overstepped his authority in imposing sweeping tariffs on goods from China, Mexico, Canada, and other countries. The decision, handed down Wednesday by a three-judge panel from the U.S. Court of International Trade in Manhattan, places a permanent injunction on several of Trump’s tariffs, potentially reshaping the landscape of U.S. trade policy if upheld on appeal.

The court ruled that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose the tariffs was unlawful. In a unanimous opinion, the judges declared that the law does not give the president authority to levy import duties, stating that “IEEPA does not authorize any of the worldwide, retaliatory, or trafficking tariff orders.” 

Specifically, the injunction blocks Trump’s 30% tariffs on China, 25% duties on selected imports from Mexico and Canada, and a 10% universal tariff on most goods entering the United States. However, it does not affect tariffs on autos, auto parts, steel, and aluminum, which were enacted under a different statute—Section 232 of the Trade Expansion Act.

The lawsuit was originally brought in April by the Liberty Justice Center, a libertarian legal advocacy group representing VOS Selections, a wine importer, and four other small businesses. The plaintiffs argued that the tariffs raised their import costs substantially and lacked legal grounding. A second lawsuit from twelve Democratic-led states, including Oregon, joined the challenge, claiming the administration imposed unlawful tax hikes on Americans.

Jeffrey Schwab, lead attorney for the Liberty Justice Center, said the ruling was critical for American businesses. “They’re hopeful that these will be upheld by the appellate court so they can continue their businesses with certainty.”

The panel included judges appointed by presidents from both parties—Jane Restani (Reagan), Gary Katzmann (Obama), and Timothy Reif (Trump)—who together agreed that the Trump administration’s actions failed to meet the legal standard of an “emergency” required under IEEPA.

Trump had unveiled his so-called “Liberation Day” tariffs on April 2, citing national security and the fight against fentanyl trafficking as justification. He invoked emergency economic powers to bypass Congress. However, the court found no legitimate emergency under the law and ruled that such trade decisions must be based on congressional authority.

The White House responded sharply to the decision. Spokesperson Kush Desai said, “It is not for unelected judges to decide how to properly address a national emergency.” Trump adviser Stephen Miller went further, calling the decision a “judicial coup” in a post on X.

Still, the ruling was widely seen as a win for small businesses and a potential turning point in the U.S. trade debate. Stock markets reacted positively to the news, with Dow futures rising nearly 500 points and gains of over 1% seen in the S&P 500 and Nasdaq indexes.

“This is potentially a significant policy pivot point,” said Joe Brusuelas, chief economist at RSM US. “It would provide huge relief for small and medium-sized firms that lack the financial depth to absorb the tariffs on a sustained basis.”

Gary Clyde Hufbauer of the Peterson Institute for International Economics called the ruling “surprising and spectacular,” noting that previous legal challenges to executive trade authority have historically failed.

The case now moves to the U.S. Court of Appeals for the Federal Circuit and could ultimately reach the Supreme Court. Until then, a 10-day window has been granted for administrative procedures to implement the injunction, freezing most of Trump’s tariffs in place unless overturned on appeal.

As Oregon Attorney General Dan Rayfield put it, “This ruling reaffirms that our laws matter, and that trade decisions can’t be made on the president’s whim.”