What happens when a former U.S. president takes a wrecking ball to decades of trade policy and the courts call his bluff? In a dramatic twist worthy of a political thriller, Donald Trump’s controversial global tariffs once hailed as bold protectionism and condemned as reckless economic warfare have just been ruled illegal by a federal trade court. But wait within hours, a higher court hit the brakes, resurrecting the very tariffs that nations around the world were scrambling to dodge. What’s at stake? Only the future of America’s global trade relationships, the limits of presidential power, and billions of dollars in cross-border commerce. As the legal battle heats up and world leaders pause mid-negotiation, one thing is certain: this isn’t just about tariffs anymore it’s about who really controls the levers of global trade.
Court clash over presidential powers
A major legal showdown is unfolding in the United States over the legality of former President Donald Trump’s sweeping tariffs on global imports. Just hours after the US Court of International Trade deemed the tariffs illegal, the Federal Circuit Court in Washington, DC issued an emergency stay, allowing the levies to remain in place temporarily. The court has given the plaintiffs 12 states and five US-based companies until June 5 to respond. Legal experts believe this case is headed for the Supreme Court, marking a pivotal moment in the balance of trade powers between the US Congress and the White House.
IEEPA vs. section 232: The legal divide
The central question revolves around the use of the International Emergency Economic Powers Act (IEEPA), which Trump cited to impose broad tariffs. The trade court ruled unanimously that IEEPA does not allow for "unbounded tariff authority," especially in the absence of an "unusual and extraordinary threat". A trade deficit, the judges argued, does not meet that bar. However, tariffs under Section 232 which allows action in the name of national security still stand and could be extended to sectors like semiconductors and pharmaceuticals in the future.
State lawsuits and California’s key role
While the current challenge focuses on the IEEPA-based tariffs, another critical lawsuit is underway in California, filed by Governor Gavin Newsom. Legal observers suggest this case could further define the constitutional limits of executive authority in trade policy. Given Congress’ primary role in trade matters, Trump’s approach bypassing legislative oversight through emergency declarations is facing increasing scrutiny.
International ripples and India's dilemma
These legal uncertainties are already impacting global trade negotiations. US negotiators are expected in New Delhi on June 5–6, but Indian officials are reassessing their strategy following Trump’s 26% reciprocal tariff threat on April 2. The tariff, paused until July 8, complicates India’s aim of securing an interim trade deal. Meanwhile, the UK’s decision to finalize a deal retaining Trump’s base 10% tariff is being questioned, especially as the US runs a trade surplus with Britain. Nations like Japan and the EU remain cautious, preferring to wait out the legal storm.
The legal challenge to Trump’s tariffs marks a critical test of executive power in the United States. Until the courts and possibly the Supreme Court deliver a final ruling, the uncertainty is likely to stall global trade negotiations and complicate foreign policy planning.
