Could President Trump’s “reciprocal tariffs” simply disappear in 10 days? They will if the Court of International Trade gets its way. On Wednesday, a three-judge panel from the federal trade court declared that Trump did not have the power to impose the tariffs he introduced on April 3 or those imposed separately on Mexico, Canada and China earlier in the year, multiple sources report.
The ruling gives the Trump administration 10 days to end the tariffs, but the Trump administration immediately filed a notice saying it plans to appeal, making it likely that the Supreme Court will end up having the final say in the matter.
According to the court, the emergency law Trump invoked to impose the tariffs — the International Emergency Economic Powers Act of 1977 — does not allow Congress to delegate “unbounded tariff power” to the President and further, the U.S. trade deficit doesn’t meet the law’s definition of an “extraordinary threat.”
No President prior to Trump has ever used the law to impose tariffs, according to the New York Times. In fact, the law doesn’t even mention tariffs and instead is primarily focused on trade embargoes and sanctions.
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For the moment, the immediate impact of the ruling will likely be even further uncertainty for businesses around the world that have spent the past two months scrambling to adapt to Trump’s aggressive trade policies.
“Ultimately, this court ruling introduces new uncertainties,” said Lauren Saidel-Baker, an economist at ITR Economics in comments shared with Retail TouchPoints. “The Trump administration has already appealed, thereby extending the timeline to finally having settled trade policy in effect. If this ruling holds, the Republican-controlled Congress may take up the tariff issue, as international trade policy is their purview.”
Trump Administration Maintains Trade Deficit is National Emergency
The court was cautious not to pass judgement on the tariffs themselves in its ruling, saying it “does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” and adding that their ruling only declares that Trump’s use of the aforementioned law “is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”
White House spokesperson Kush Desai refuted the court’s ruling in a statement, saying that U.S. trade deficits with other countries do in fact qualify as “a national emergency that has decimated American communities, left our workers behind and weakened our defense industrial base — facts that the court did not dispute.
“It is not for unelected judges to decide how to properly address a national emergency,” Desai added.
Counter to the Trump administration’s “national emergency” argument, Saidel-Baker pointed out that “the U.S. has run a trade deficit since 1976. During the 12 months through March, the trade deficit equated to 3.99% of GDP. In comparison, the trade deficit neared 6% of GDP during the early 2000s, peaking at 5.9% in 2006.”
Analysts at Goldman Sachs also pointed out that Trump has other avenues at his disposal to institute the tariffs that have become the signature policy of his second term: “This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major U.S. trading partners,” analyst Alec Phillips wrote in a client note highlighting that the ruling that does not, for example, bar sector-specific tariffs.
Trade Court Includes 3 Trump-Appointed Justices
A lesser-known federal entity, the Court of International Trade hears all cases related to international trade and customs law, with a geographical jurisdiction that covers the entire U.S. The court consists of nine judges appointed by the President and confirmed by the Senate who, like the justices on the U.S. Supreme Court, are appointed for life. The current panel of nine judges includes three justices appointed by Trump during his first term in office, as well as four appointed by President Obama in 2016 and two appointed by President Biden in 2024.
