US federal court rules Trump's 10 percent global tariff is illegal, in a fresh blow to administration trade policy
A US federal court has ruled that the Trump administration's 10 percent global import tariff, imposed in February, also exceeds presidential constitutional authority. The decision finds that the new tariff — structured to replace an earlier reciprocal tariff that the same court had already struck down — suffers from the same constitutional defect.
The court is the US Court of International Trade (CIT), and the three-judge panel in New York held that the president does not have authority to use the 1977 International Emergency Economic Powers Act (IEEPA) for this purpose. The court found that IEEPA was designed for limited economic responses to specific emergent threats, and could not serve as the legal basis for a globally applicable tariff regime.
In practical terms, the ruling came in response to a lawsuit brought by 21 European and Asian companies. Among the lead plaintiffs, the Dutch precision manufacturer ASML claimed it had paid more than 200 million dollars in additional tariffs on the semiconductor production equipment it exports to the United States. With the ruling now applied, such tariff payments could lead to refund claims of up to 4.8 billion dollars by the end of the year.
The Trump administration announced it will appeal. White House spokesperson Karoline Leavitt described the ruling as "an example of judicial overreach" and said the president would "exercise his power to protect our economy in a different way." The administration's alternatives include declaring fresh tariffs under Section 232 (national-security threat) or Section 122 (balance-of-payments crisis); both authorities have narrower scope.
The decision did not produce a marked move in US stock-index futures overnight. Technically, however, it was announced after the equity-market close, which means the real market response will be visible at Monday's open. The critical question for investors is which sectors stand to benefit most from refund claims.
The technology sector is widely seen as one of the first to feel the effect of the ruling. Apple, Dell and Intel had announced price increases over the past three months, citing the new US tariff. Apple is reported to have adjusted prices on certain products manufactured in India and Vietnam; those prices may be rolled back in the coming weeks.
The European Union's first reaction was positive. EU Trade Commissioner Maroš Šefčovič described the ruling as "respect for the rule of law" and said the EU could "depending on US decision-making" reconsider its retaliatory tariffs. The EU had introduced retaliatory tariffs on bourbon, Harley-Davidson motorcycles and various agricultural products immediately after the US global tariff was imposed.
China's response was more cautious. The Chinese Ministry of Commerce said the ruling could "present an opportunity" for the resumption of US-China trade talks, but did not yet table a concrete new offer. China had introduced targeted tariffs on US soybeans and large-tech products in response to the US 10 percent tariff.
The ruling's implementation timeline is complicated. The court said the order takes effect in 14 days, but if the administration appeals, the Third Circuit Court of Appeals could stay enforcement. Legal scholars say the case will eventually go to the Supreme Court and that the outcome there will, for the first time, comprehensively define the scope of the president's tariff authority under IEEPA.
This process represents a particular test for the Supreme Court's conservative majority. In previous major executive-power cases the majority has tended to grant the president broad authority; on questions of economic authority, however, the "major questions doctrine" has emerged over the past three years as the most significant constraint. The case's final outcome could be defining for the structure of US trade policy over the next decade.