A U.S. trade court on Wednesday blocked former President Donald Trump’s proposed tariffs in a sweeping ruling that found he had overstepped his authority by imposing across-the-board duties on imports from countries running trade surpluses with the United States.

The Court of International Trade ruled that the U.S. Constitution grants Congress exclusive authority to regulate commerce with foreign nations—authority not overridden by the president’s emergency powers under existing law.

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel stated in its decision. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”

The Trump administration swiftly filed a notice of appeal, challenging the court’s authority. The Manhattan-based Court of International Trade, which handles cases involving customs and international trade laws, issues decisions that may be appealed to the U.S. Court of Appeals for the Federal Circuit and, ultimately, the U.S. Supreme Court.

Tariffs on foreign imports were a cornerstone of Trump’s trade policy, which aimed to reduce the U.S. goods trade deficit, encourage domestic manufacturing, and pressure trading partners into concessions. However, critics argue the approach disrupted global trade and created uncertainty for businesses navigating supply chains, production planning, staffing, and pricing.

A White House spokesperson responded to the ruling, saying trade deficits represent “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,” spokesperson Kush Desai added in a statement.

Financial markets reacted positively to the ruling. The U.S. dollar surged against the euro, yen, and Swiss franc, while Wall Street futures and Asian equities climbed.

If upheld, the decision could significantly undermine Trump’s strategy of using tariffs—ranging from 10% to 54%—under the International Emergency Economic Powers Act (IEEPA), which permits action during “unusual and extraordinary” threats to national security. Without the authority to impose immediate tariffs, future administrations would be forced to rely on slower, more traditional trade law mechanisms for enforcement.

The ruling came in response to two lawsuits—one filed by the nonpartisan Liberty Justice Center on behalf of five small U.S. businesses affected by the tariffs, and another brought by 13 U.S. states. The businesses, including a New York-based wine and spirits importer and a Virginia manufacturer of educational kits and instruments, argued the tariffs would harm their ability to operate.

“There is no question here of narrowly tailored relief; if the challenged Tariff Orders are unlawful as to Plaintiffs, they are unlawful as to all,” the court wrote in its opinion.

At least five other legal challenges to the tariffs remain pending. (Reuters)