Trump’s ‘Liberation Day’ Tariffs Halted by Court of International Trade

May 29, 2025

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by David J. Lynch and Cat Zakrzewski (Washington Post) Most of President Trump’s tariffs were halted late Wednesday by a US trade court in a sharp rebuke of the president’s signature trade war policy. -- A specialized federal court in New York on Wednesday ruled that most of President Donald Trump’s tariffs — including those on Chinese goods — are illegal, upending negotiations with more than a dozen nations and creating fresh uncertainty for countless American businesses that depend upon foreign suppliers.

The decision by the little-known Court of International Trade neuters the president’s signature trade initiative: the comprehensive flurry of import taxes he announced on April 2 under the banner of “Liberation Day.”

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The trade court’s ruling that Trump exceeded his authority in imposing tariffs on all imported goods brought an immediate, albeit perhaps temporary, halt to his signature trade war policy.

“The challenged Tariff Orders will be vacated and their operation permanently enjoined,” a three-judge panel ruled.

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Justice Department said in a federal court filing that it will appeal.

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The president invoked a 1977 law that granted him emergency powers over the economy, the International Emergency Economic Powers Act or IEEPA.

The trade court’s ruling also freezes separate tariffs on Mexican, Canadian and Chinese goods, which Trump imposed to coerce those governments into taking action to counter human and drug trafficking. But import taxes on specific products such as automobiles, auto parts, steel and aluminum will remain in effect.

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The court noted that IEEPA says the president may only use his emergency powers “to deal with an unusual and extraordinary threat with respect to which a national emergency has been declared.”

Trump pointed to the merchandise trade deficit that the United States has run each year since 1975 as the “emergency” justifying his sweeping tariffs.

Wednesday’s ruling also applies to other tariffs that the president imposed on Mexico and Canada, citing an emergency over illegal migration and drug trafficking, and China for its alleged role in facilitating production of the opioid fentanyl.

The trade court rejected those tariffs, saying they failed to meet the law’s requirement that they “deal with an unusual and extraordinary threat.” Instead of addressing the president’s stated objective of curbing illicit cross-border trafficking in people and drugs, the tariffs were designed to “create leverage” to get other governments to do so, the court said.

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The government argued that the economic emergency law’s language authorizing the president to “regulate … importation” granted him full powers over tariff rates. But the trade court disagreed, saying the law did not authorize “the President to impose whatever tariff rates he deems desirable.”

Legal experts have told The Post that the lawsuits are likely to succeed if they make it to the Supreme Court.

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“When the White House is itself touting this as the largest tax increase in American history, I think that’s going to make the justices sit back and think the Constitution gives Congress, and Congress alone, the authority to levy duties, impose tariffs and to regulate foreign commerce,” said (Tim) Meyer, who clerked for Supreme Court Justice Neil M. Gorsuch, a Trump nominee, when he served on the U.S. Court of Appeals for the 10th Circuit. READ MORE

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Excerpt from DTN Progressive Farmer: The ruling, at least temporarily, requires the administration to remove tariffs imposed on Canada, Mexico and China -- the three largest buyers of U.S. agricultural products.

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The ruling also blocks 25% tariffs Trump had imposed on Canada and Mexico over border security and fentanyl trafficking, as well as another 20% tariff on most products from China.

Effectively, the court's order removes a 30% tariff on China by blocking both sets of tariffs. Trump had declared tariffs on China would go as high as 145% but those were never set in place.

In announcing Liberation Day, Trump said at the time that his tariff policies "are standing up for farmers and ranchers" who are "brutalized by nations."

The court said, "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. This conclusion entitles plaintiffs to judgment as a matter of law; as the court further finds no genuine dispute as to any material fact, summary judgment will enter against the United States."

Stephen Vaden, President Trump's nominee to be Agriculture deputy secretary, sits on the International Trade Court, but he was not one of the judges who considered this case. The three judges who issued the ruling were Gary Katzmann, Timothy Reif and Jane Restani.

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Farm groups and agribusinesses have expressed concerns that Trump's tariffs on goods imported to the United States would lead to retaliation against U.S. products.

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Trump "might still be able to temporarily launch import taxes of 15% for 150 days on nations with which the U.S. runs a substantial trade deficit," the Associated Press said. "The ruling notes that a president has this authority under Section 122 of the Trade Act of 1974." READ MORE

Excerpt from Politico: The ruling on Wednesday came down in two cases — one filed by a group of small businesses and the other by 12 Democratic state attorneys general. There are at least five other cases challenging the tariffs pending at the Court of International Trade and other courts throughout the country (including one that dealt Trump another defeat Thursday), but Wednesday’s decision was importantly the first ruling on the merits that Trump had exceeded his authority in imposing such sweeping tariffs. It will also likely pave the way for a more definitive resolution — the administration quickly filed notices of appeal and moved to stay the ruling — perhaps going all the way up the Supreme Court.

There were recent signs of desperation on the part of the administration as the court’s skepticism became increasingly evident over the course of lengthy oral arguments in the two cases.

Late last week, Justice Department lawyers told the court that a ruling against the government would undermine the administration’s “leverage” and “unravel the complex and delicate foreign-affairs negotiations unfolding around the globe.” “Interfering with the negotiations in their present state,” DOJ added, “would create a foreign-policy disaster.”

The argument was backed by declarations from three Cabinet secretaries — Secretary of State Marco Rubio, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick — along with U.S. Trade Representative Jamieson Greer. The gambit — arguably a not-so-subtle form of political blackmail — evidently flopped with the three judges, who are appointees of Trump, Barack Obama and Ronald Reagan.

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To fully understand the legal headwinds that continue to face the administration, it is helpful to zero in on a 50-year-old decision that quickly emerged as a central point of contention among the parties — and that the Court of International Trade relied upon heavily in ruling against Trump.

The case in question is known as United States v. Yoshida International, which affirmed President Richard Nixon’s power to impose a 10 percent tariff on imports that he announced in August 1971, under a statute known as the Trading with the Enemy Act (TWEA). The TWEA was the predecessor statute to the International Economic Emergency Powers Act (IEEPA), which Trump invoked to support his tariffs.

Nixon justified the tariff by claiming that an overvaluation of the U.S. dollar at the time had contributed to a trade imbalance and a deficit in America’s “balance of payments” (a broader economic measure that includes both trade and capital flows). The tariff was short-lived — Nixon terminated it in December 1971 after negotiating a realignment of exchange rates with a group of developed countries — but in the meantime, U.S. importers that paid the additional tax challenged Nixon’s legal authority.

One of those companies was Yoshida — now known as YKK — which challenged the tariff on zippers imported from Japan. The company filed a lawsuit and won in the lower court, but the decision was overturned on appeal several years later. (The lower court was then known as the Customs Court, and the appellate court was known at the time as the Court of Customs and Patent Appeals. Those courts have since been renamed the Court of International Trade and the U.S. Court of Appeals for the Federal Circuit, respectively. As a result, the decision binds the current Court of International Trade.)

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The court concluded that the tariff was legally justified under the TWEA to address the trade imbalance and pointed to language in the statute that authorized the president to “regulate” the “importation” of foreign goods in the event of an emergency. That language was carried over into IEEPA as part of a much longer list of actions permitted by the president, though that list does not explicitly mention either tariffs or taxes (a point to which we will return).

In light of the parallel statutory language in TWEA and IEEPA, the Justice Department argued that Yoshida “continues to control today” and requires the Court of International Trade to rule in favor of the Trump administration.

As Wednesday’s decision makes clear, it was not so simple.

In several crucial respects, the Yoshida decision cut sharply against the administration’s position. That put the Justice Department in the awkward — and generally unenviable — position of having to pick and choose which parts of the decision that it likes, and which parts of the decision the courts should ignore.

For starters, the Yoshida decision rejected a key proposition that is at the heart of the government’s defense of Trump’s tariffs — the notion that courts have no power to review a president’s actions under IEEPA.

The court ruled in Yoshida that each presidential action under the statute “must be evaluated on its own facts and circumstances.” The court went on to emphasize that its ruling, while favorable to the Nixon administration, was not a blanket approval of “any future surcharge of a different nature, or any surcharge differently applied or any surcharge not reasonably related to the emergency declared;” that the president’s actions under the statute “must also bear a reasonable relation to the particular emergency confronted;” and that “emergencies are expected to be shortlived.”

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Nixon’s tariff was fixed at 10 percent and in place for less than five months. Trump’s tariff framework is far more ambitious, open-ended and has been all over the place since his inauguration — with the effective dates and applicable countries, rates, exceptions and concessions under seemingly constant revision.

And if Trump and some of his advisors are to be believed, there would be no end in sight. “If President Trump succeeds like he wants to succeed,” Trump’s trade adviser Peter Navarro said earlier this year, “we are going to structurally shift the American economy from one over-reliant on income taxes and the Internal Revenue Service, to one which is also reliant on tariff revenue and the External Revenue Service.” That is a far cry from a five-month, supplemental 10 percent tariff like what Nixon imposed.

Two other, subtler points in the Yoshida decision made things worse for the administration.

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Under the so-called major questions doctrine, when an executive action exceeds an undefined threshold of “economic and political significance,” the justices insist on a clear delegation of authority from Congress on the matter. That does not exist in the case of Trump’s claim to sweeping, open-ended and unreviewable tariff powers.

And in overruling the Chevron doctrine last summer, the court’s conservatives emphasized that judges should not simply defer to the executive branch’s interpretation of ambiguous statutes when evaluating legal questions. READ MORE

Excerpt from Politico: A federal appeals court has temporarily reinstated President Donald Trump’s sweeping “reciprocal” tariffs as it considers the administration’s request to leave the tariffs in place while litigation over their legality continues.

The Court of Appeals for the Federal Circuit issued an order Thursday afternoon granting “an immediate administrative stay” of a ruling Wednesday by the U.S. Court of International Trade that found Trump could not use emergency powers in an almost 50-year-old statute to impose tariffs on imports from countries around the globe.

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The decision temporarily reimposes Trump’s sweeping 10 percent global tariffs and the paused “reciprocal” tariffs that Trump imposed on more than 60 trading partners and has used as a leverage point in trade negotiations. It also applies to his 25 percent duties on Canadian and Mexican products and a 20 percent tariff on Chinese products in response to a purported national emergency on drug trafficking.

The appeals court said the temporary stay would remain in place until it rules on the administration’s motion for a longer-term pause of the lower court decision. The stay is likely to run through at least mid-June, according to a schedule laid out by the Federal Circuit judges.

In a separate case, a federal district judge also ruled against Trump’s tariffs on Thursday. That ruling — from U.S. District Judge Rudolph Contreras in Washington — is not covered by the Federal Circuit’s stay, and the Trump administration’s appeal of Contreras’ ruling will go to a different federal appeals court. But Contreras put his own ruling on hold for 14 days to give the administration time to appeal. He also restricted its ultimate effect to the two companies that filed the lawsuit. READ MORE

Excerpt from AgWeb: How could this ruling potentially impact trade? We asked Alan Brugler of Brugler Marketing that question before the appeals court weighed in. He says to answer that, you first need to ask two main questions.

“In the short run, not much. You have to assume the administration is going to appeal the ruling and the question is going to be ‘Will the appeals process result in a stay, either freezing the tariff implementation or allowing it to continue during the appeal process?’ That’s the first question,” Brugler says.

Brugler says his second question is how this could impact current trade negotiations. Just last week, treasury secretary Scott Bessent said he expects several large trade deals to be announced in the next couple of weeks.

“What does it do to the administration’s leverage on the deals that they said we were coming close to,” Brugler adds. “The EU is one example. For now, I think we have to take it with a grain of salt. We also need to remember that it does not affect some of the tariffs, such as the aluminum and steel. Those were implemented under a different section of law that had been used back in the 2017 and 2018 era. Those are still in place. So, it does offer some potential for a lot less aggressive tariff war. But again, this is probably just the first step in the overall process.” READ MORE

Excerpt from Argus Media: Formerly fast-rising flow

Before this year, renewable diesel and sustainable aviation fuel producers along the US Gulf and west coasts were expanding capacity and increasingly looking abroad for inputs. Waste feedstocks like used cooking oil and beef tallow are considered lower-carbon feedstocks than crops and thus generally fetch larger government subsidies — even if sourced from abroad. The US imported nearly 5.4bn lbs of used cooking oil in 2024, a record-high and with more than half that total coming from China.

But Trump's tariffs sharply reduced the incentive to import foreign feedstocks. Duties on Chinese products have varied significantly but were last at 30pc before the court ruling, adding to existing 15.5pc charges on Chinese used cooking oil. Reciprocal tariffs of 10pc on nearly every country added new costs to Australian and Brazilian tallow too.

US import data is only available through March, before Trump imposed his most far-reaching tariffs as part of an April "Liberation Day" announcement. But global feedstock traders more recently have said that the tariffs — and the unpredictability of future policy — have made global inputs riskier. While some tariffs are eligible for duty drawbacks, creating options for biofuel producers targeting foreign markets, US imports of Chinese used cooking oil were down 27pc in the first quarter compared to the same period last year.

Other barriers remain

Even if the court ruling holds, other policies could deter US biorefineries from relying too heavily on foreign feedstocks. For one, current government guidance around a new US clean fuel tax credit prevents refiners from claiming any subsidy for road fuels derived from foreign used cooking oil. Those rules also pin the carbon intensity of canola-based fuels as too high to claim any subsidy, choking off interest in Canadian canola oil imports that had been rising significantly before this year.

And farm groups, worried that foreign feedstocks are hurting demand for US crops, are lobbying regulators and lawmakers for more severe limits. A party-line budget bill that passed the House this month would restrict clean fuel tax credit eligibility to fuels derived from North American feedstocks, a win for US oilseed crushers but a major blow to refiners reliant on foreign tallow.

While that bill still needs Senate approval and changes would only kick in next year, the proposal is a clear signal from Republicans that refiners should start looking closer to home for renewable diesel inputs. READ MORE