Federal Judge Halts Trump’s “Liberation Day” Tariffs: A Constitutional Showdown Over Executive Trade Powers

Introduction

On May 28, 2025, a three-judge panel of the U.S. Court of International Trade (CIT) delivered a landmark ruling invalidating the broad “Liberation Day” tariffs that President Donald J. Trump had imposed without congressional approval. The court held that the president “exceeded any authority … to regulate importation by means of tariffs” under the International Emergency Economic Powers Act (IEEPA), concluding that “Because of the Constitution’s express allocation of the tariff power to Congress … we do not read IEEPA to delegate an unbounded tariff authority to the President.” This decision strikes at the core of longstanding tensions over separation of powers, national emergency authorities, and the evolving scope of executive discretion in U.S. trade policy.

At issue is whether the president may, by declaring a national emergency in response to chronic trade deficits and a perceived fentanyl crisis, impose steep tariffs on imports from over 50 countries—ranging from a 10% across-the-board levy to reciprocal rates as high as 50%—absent explicit congressional authorization. This case raises profound questions about the constitutional allocation of taxing and trade powers under Article I, the proper interpretation of IEEPA (Title 50 U.S.C. § 1701–1707), and the role of the courts in checking executive overreach.

“President Trump’s sweeping use of emergency tariff powers represents an unprecedented and unlawful expansion of executive authority,” argued law professor Ilya Somin of George Mason University, lead counsel for several small-business plaintiffs. “He’s sort of breaking various precedents and doing things which are highly illegal and obviously our contention is that this is highly illegal.” With global markets jolting on the prospect of revived free-trade norms and the administration vowing to appeal “all the way to the Supreme Court,” the stage is set for a protracted legal battle that may finally define the boundaries of presidential trade power.

Legal and Historical Background

The International Emergency Economic Powers Act (IEEPA)

Enacted in 1977 amid Cold War tensions, IEEPA grants the president authority to regulate international commerce following a declaration of national emergency by the president or Congress (50 U.S.C. § 1701(a)). Its primary purpose was to codify executive powers over economic sanctions, blockades, and asset freezes in response to threats to U.S. national security, foreign policy, or economy.

• Text of the Statute: Under 50 U.S.C. § 1702(a)(1)(B), the president may, during a declared national emergency, “investigate, block during the pendency of the investigation, regulate, direct and compel, nullify, void, prevent or prohibit” a broad range of transactions involving foreign nations.
  
• Legislative History: IEEPA amended the Trading with the Enemy Act of 1917 to restore and limit broad executive authorities after judicial pushback in cases like Youngstown Sheet & Tube Co. v. Sawyer (343 U.S. 579 (1952)). Lawmakers reaffirmed that tariff authority remained with Congress under Article I, § 8, cl. 1, and did not intend to subsume such power under IEEPA’s emergency provisions.
  

Section 232 of the Trade Expansion Act (1962)

Separate from IEEPA, Section 232 of the Trade Expansion Act (19 U.S.C. § 1862) authorizes the president to impose tariffs for national security reasons “after affording due consideration to the effect of such action on the national economy.” Historically, presidents have invoked § 232 to restrict imports of steel and aluminum.

• Historical Use: Presidents Nixon (1974), Carter (1979), and Bush 43 (2002) invoked § 232 to address defense-related industrial concerns. Each action was subject to mandatory consultations and report requirements to Congress.
  
• Relevant Precedents: In WTI v. United States (CIT, 1980), the Court of International Trade upheld Nixon-era steel quotas under § 232 but underscored the necessity of statutory compliance, including notice to and review by Congress.
  

Separation of Powers and Delegation Doctrines

The Constitution vests all “[p]ower to lay and collect Taxes … Duties, Imposts and Excises” in Congress (Art. I, § 8). Delegation doctrines require clear congressional authorization when significant economic or political questions are at stake, as reaffirmed in FDA v. Brown & Williamson Tobacco Corp. (529 U.S. 120, 2000).

• Major-Questions Doctrine: Post-West Virginia v. EPA (142 S. Ct. 2587 (2022)), the Supreme Court has signaled reluctance to allow agencies (or the executive) to assert sweeping, transformative powers absent clear congressional mandate.
  
• Nondelegation Concerns: Advocates like the New Civil Liberties Alliance (N.C.L.A.) argue that IEEPA’s broad language can no longer substitute for express legislative approval of tariffs—quoting that “I.E.E.P.A. does not explicitly authorize tariffs and violates Article I’s allocation of taxing powers to Congress.”
  

Academic Commentary

• Curtis Bradley (Yale Law School): “This case illustrates the risks of unchecked emergency powers and underscores the need for structural safeguards to maintain congressional primacy in economic policymaking.”
  
• Sarah Cleveland (NYU School of Law): “The emergency powers framework was designed for targeted sanctions, not sweeping trade wars that destabilize global markets.”
  

Case Status and Legal Proceedings

The Litigation

Multiple suits were consolidated in the CIT under case names such as V.O.S. Selections v. United States and Liberty Justice Center v. United States. Plaintiffs include small businesses, state attorneys general, and trade associations.

• Procedural History:
  
  • April 2, 2025: Trump signs executive orders imposing Liberation Day tariffs (10% on most imports; up to 50% “reciprocal” rates).
    
  • April 14, 2025: Liberty Justice Center files suit on behalf of five importers, challenging IEEPA basis .
    
  • May 16, 2025: Oral arguments heard in V.O.S. case; panel appears skeptical of IEEPA rationale .
    
  • May 28, 2025: Panel issues unanimous ruling blocking all IEEPA-based tariffs, ordering rescission within ten days .
    

Court’s Rationale

The court concluded that:

1. IEEPA’s Textual Limits: The statute lacks any specific grant of tariff-setting authority.
   
2. Constitutional Allocation: Article I’s grant of taxing and tariff powers exclusively to Congress precludes such delegation.
   
3. Statutory Overrides: Where Congress intended to delegate tariff authority, it did so explicitly (e.g., § 232), not via emergency statutes.
   

Appeals and Stay

The administration immediately filed for a stay of the CIT decision and appealed to the U.S. Court of Appeals for the Federal Circuit. Pending appeal, the CIT granted a 14-day pause before mandates take effect .

Viewpoints and Commentary

Progressive / Liberal Perspectives

Civil Rights and Consumer Advocates
“These emergency tariffs were nothing more than a power grab that hurt American consumers and small businesses,” argued Craig Becker, former NLRB member.

Democratic Lawmakers
“Congress must reclaim its constitutional role in trade policy,” declared Senator Chris Murphy (D-Conn).

Legal Scholars
“Unchecked executive action threatens both market stability and the rule of law,” warned Erwin Chemerinsky, dean of Berkeley Law.

Humanitarian Concerns
“Inflated import costs undermine aid procurement and international cooperation,” noted Sarah Margon, policy director at Human Rights Watch.

Economic Analysts
Citing analysis from the Brookings Institution, “Tariffs of this scale risk recessionary pressures and weaken supply-chain resiliency.” (Brookings Gov’t Studies, 2025)

Conservative / Right-Leaning Perspectives

Executive Authority Advocates
“The president must have flexibility to respond swiftly to economic threats,” argued John Yoo, UC Berkeley Law, in Lawfare (Apr. 2025).

National Security Commentators
“Persistent trade deficits and illicit fentanyl flows constitute genuine emergencies,” claimed Michael Pompeo, former Secretary of State, on Fox News.

Originalist Scholars
“Nondelegation doctrine must yield in crises where policy gridlock endangers America,” said Steven Calabresi, co-founder of the Federalist Society.

Business Leaders
“Competitive leverage against China and Mexico is vital for reshoring jobs,” stated Mary Barra, CEO of General Motors.

Constitutional Traditionalists
Marco Rubio (R-Fla) emphasized that “Congress can always legislate anew if additional tools are needed—but unilateral executive action undermines democratic checks.”

Comparable or Historical Cases

Youngstown Sheet & Tube Co. v. Sawyer (343 U.S. 579 (1952)): Supreme Court struck down Truman’s seizure of steel mills, affirming limits on emergency executive powers. “Seizure precedents underscore that even pressing crises do not justify unchecked authority.”

Wirtz v. Baldor Electric Co. (337 F. Supp. 966 (Ct. Int’l Trade 1972)): Court upheld selective import controls under the Emergency Petroleum Allocation Act, but stressed statutory specificity.

United States v. Curtiss-Wright Export Corp. (299 U.S. 304 (1936)): Broad recognition of inherent foreign-affairs powers, yet did not extend to tariff imposition absent legislative direction.

WTI Steel Quotas (CIT 1980): Affirmed § 232 quotas but reiterated that statutory compliance and congressional review are mandatory.

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. (467 U.S. 837 (1984)): Established deference to agency interpretation, but recent major-questions cases limit such deference for economic regulation.

Policy Implications and Forecasting

Short-Term Effects

Market Rebound: Wall Street rallied on news of tariff invalidation—S&P 500 futures rose, with the Dow up 0.12% and Nasdaq up 0.91% .

Trade Uncertainty: Businesses face renewed ambiguity as appeals loom, prompting calls for swift congressional action.

Diplomatic Reassurance: U.S. trading partners, notably Australia, welcomed the ruling: “We hope it will aid efforts to remove U.S. tariffs on Australian exports,” said Trade Minister Don Farrell.

Long-Term Consequences

Congressional Reassertion: Lawmakers may pass legislation requiring congressional review of emergency tariffs within set timelines, reclaiming oversight lost under broad executive orders.

Judicial Precedents: The CIT’s interpretation of IEEPA may guide lower courts and influence Supreme Court major–questions jurisprudence.

Executive Strategy Shifts: Future administrations might employ narrower, statute-specific authorities (e.g., § 232, Section 301 of the Trade Act of 1974) for targeted measures, avoiding blanket emergency claims.

Civil Liberties Concerns: Scholars warn that sanctioning broad economic instruments under IEEPA could erode public trust in rule-based governance.

Global Trade Dynamics: International partners may press for the repeal of retaliatory measures enacted in response to Trump’s tariffs, reshaping negotiation frameworks for USMCA and WTO engagements.

Prominent policy institutions have weighed in:

• Brennan Center for Justice: Advocates for stricter emergency-powers constraints to uphold constitutional balance.
  
• Cato Institute: Calls for repeal of outdated IEEPA provisions that enable executive overreach.
  
• Heritage Foundation: Proposes codifying emergency trade authorities with explicit congressional approval mechanisms.
  

Conclusion

The CIT’s decision to block President Trump’s unilateral “Liberation Day” tariffs spotlights enduring constitutional tensions over the separation of powers, emergency authorities, and the rule of law in U.S. trade policy. While supporters of robust executive flexibility decry “judicial overreach” and pledge appeals to the Supreme Court, proponents of legislative accountability celebrate a reaffirmation that taxing power resides with Congress alone. As the legal battles unfold, one central question remains:

“How can the United States craft a resilient trade-policy framework that balances swift crisis response with democratic checks and transparent oversight?”

“This ruling is a seminal moment for constitutional governance,” reflects legal historian Caroline Fredrickson. “It forces a reckoning over where national emergency powers end and legislative prerogatives begin.” With global economic stability and domestic constitutional order at stake, the debate will undoubtedly shape the trajectory of U.S. trade law for decades to come.

For Further Reading

1. US court blocks Trump’s ‘Liberation Day’ tariffs, labels move as overreach of authority
2. U.S. federal court rules against Trump’s fentanyl and ‘Liberation Day’ tariffs
3. Appeals Court Grants Stay in Trump Tariff Fight
4. 2 laws Trump could use to reimpose his tariffs (and why he might use both)
5. Court blocks Trump tariffs: 5 takeaways