U.S. Court Rules Trump's Tariffs Invalid (Full Text of the Judgment Attached)

Trump spoke in the Oval Office of the White House in Washington on May 28, 2025. Andrew Harnik/Getty Images

On May 28, 2025, the U.S. Court of International Trade (CIT) made an important ruling regarding the unilateral power of the U.S. President to impose tariffs. The ruling clearly stated that the global and retaliatory tariffs imposed by the President on goods from multiple countries, including China, under the International Emergency Economic Powers Act (IEEPA) are "illegal." If this ruling takes effect, the tariffs imposed on Chinese goods based on IEEPA will lose their legal basis and should theoretically be revoked, directly reducing the tariff burden on Chinese goods exported to the U.S., which would benefit relevant Chinese export enterprises. Currently, the White House has indicated that it will appeal this ruling, and the validity of the original executive order may become complicated.

I. Case Background and Core Disputes

This lawsuit stems from a series of tariff measures recently taken by Trump. Among them, the most representative is the global tariff measure announced by the president on April 2, 2025, through an executive order, aimed at addressing the so-called national emergency. This measure imposes universal tariffs on imported goods from almost all trade partners and sets higher retaliatory rates specifically for certain countries, including China (hereinafter referred to as "global and retaliatory tariffs"). In addition, the president has previously implemented specific tariff measures against countries such as Canada, Mexico, and China, citing the need to combat illegal immigration flows and the cross-border trafficking of synthetic opioids (hereinafter referred to as "trafficking-related tariffs").

The Trump administration argues that its power to impose these tariffs derives from the IEEPA, arguing that the U.S. trade deficit and the actions of specific countries pose an "unusual and exceptional threat," triggering a national emergency that gives the president the power to take appropriate economic measures. The administration also cited the 1971 Nixon President's court recognition of emergency tariffs (United States v. Yoshida Int'l. Inc., hereinafter referred to as Yoshida II) as a precedent and held that whether the President's reasons for declaring a state of emergency were in accordance with the law was a "political question" and that the court should not intervene.

However, a group of small businesses, including wine importer V.O.S. Selections, along with twelve state governments led by Oregon, have filed a lawsuit against this. The plaintiffs argue that the President's actions exceed the authority granted by the IEEPA, which does not give the President such broad and unrestricted powers to impose tariffs, and that the current trade situation and the actions of specific countries do not meet the strict standards of "unusual and extraordinary threat" as defined by the IEEPA. They point out that the U.S. Constitution primarily gives Congress the power to impose tariffs.

2. Key Court Rulings and Legal Basis

On May 28, 2025, the United States Court of International Trade issued a judgment opinion (Slip Op. 25-66) that provided an in-depth legal analysis of the president's tariff authority, ultimately supporting the main arguments of the plaintiffs.

Excerpt from the original judgment opinion "Conclusion" section

1. The scope of IEEPA's authorization and the legality of "global and retaliatory tariffs"

The court first examined the scope of authorization under IEEPA. The judgment clearly stated that IEEPA did not grant the president the power to impose tariffs "indefinitely" or "without constraints." The court found that the tariff-making authority claimed by the president in this case "is not limited in duration or scope," which "exceeds any tariff authority granted to the president under IEEPA." Therefore, the court ruled that the "global and retaliatory tariffs" imposed by the president under IEEPA are "ultra vires and contrary to law."

The court made a special distinction between the IEEPA and the Trading with the Enemy Act (TWEA). The court reviewed the legislative history of the IEEPA and pointed out that when Congress passed the IEEPA in 1977, its purpose was to limit the President's exercise of emergency economic powers in peacetime, making its scope more limited than that of the TWEA and subject to more procedural constraints. Although the Yoshida II case supported President Nixon's imposition of a 10% temporary import surcharge under the TWEA framework to address an international balance of payments crisis, the court emphasized that the tariffs in the Yoshida II case were clearly temporary and limited, and the legal context at that time differed from the legislative intent of the IEEPA. The court believed that the global tariffs imposed by President Trump lacked this inherent limitation, and their breadth and potential indefinite nature were inconsistent with the legislative spirit of the IEEPA.

2 "Abnormal and Special Threat" Clause and its Relevance to "Trafficking-Related Tariffs"

Regarding "trafficking-related tariffs," the court focused on the provisions of IEEPA Section 1701(b). This clause requires the President to exercise the powers granted by IEEPA must be "aimed at dealing with" the declared national emergency that constitutes an "unusual and extraordinary threat," and must not be used for other purposes.

The court believed that the tariffs imposed by the president on countries such as Canada, Mexico, and China, while claiming to address the threats posed by these countries' failure to effectively curb drug trafficking and illegal immigration, lacked a direct and substantive connection between the tariff measures and the threats they aimed to address. The court pointed out that the act of imposing tariffs itself does not directly 'address' the inaction of foreign governments in law enforcement. The ruling held that using tariffs as a means of 'pressure' or 'leverage' to compel other countries to change their domestic policies or enhance law enforcement is not equivalent to the direct 'response' required by IEEPA to identified threats. This indirect and strategic method of pressure exceeds the limitations on the purpose of power exercised under IEEPA Section 1701(b).

3 Constitutional Powers of Congress

The court reiterated the fundamental principle of the separation of powers in the U.S. Constitution in its ruling. According to Article I, Section 8 of the U.S. Constitution, the power to regulate and impose tariffs primarily belongs to Congress. Although Congress can delegate some powers to the executive branch through legislation, such delegation must be clear and limited. The court held that the president's interpretation and application of the IEEPA in this case constituted an erosion of Congress's core legislative powers.

*The full judgment can be found at:

III. Subsequent Impact

The ruling of the U.S. International Trade Court, if ultimately upheld, will have a direct and profound impact on the tariff landscape between China and the United States, particularly regarding the multiple tariffs imposed on Chinese goods by the Trump administration under the IEEPA.

1 The current IEEPA tariffs on Chinese goods are facing expiration.

According to the ruling, the two main tariffs imposed by the president on Chinese goods under IEEPA have been deemed illegal:

• "Trafficking-related tariffs": Court documents show that the President issued an executive order (Executive Order 14195) on February 1, 2025, imposing a 10% ad valorem tariff on Chinese goods on the grounds that China failed to adequately stop the flow of fentanyl precursor chemicals, which was later increased to 20% on March 3, 2025 (Executive Order 14228). The court found that such tariffs did not meet the requirement under IEEPA section 1701(b) that measures must "aim to address" specific threats.
• "Global and retaliatory tariffs": Trump's April 2, 2025, executive order (Executive Order 14257) imposes universal tariffs of 10% on almost all trading countries, including China. For China, the order and subsequent adjustments, such as Executive Order 14259 on April 8, 2025 and Executive Order 14266 on April 10, 2025, briefly increased the specific tax rate from 34% to 84% and even 125%. Although on May 12, 2025 (Executive Order 14298), as a result of consultations with China, this targeted high tariff was temporarily reduced to 10% (for a period of 90 days, on top of the original 10% general tariff and 20% "trafficking-related tariff"), the basis of its legality was also questioned by the courts. The court held that such tariffs were outside the scope of the IEEPA's authority because they lacked clear scope and term limits.

If this ruling takes effect, the tariffs imposed on Chinese goods based on IEEPA (whether the general 10%, targeted 20%, or the retaliatory tariffs that once reached as high as 125%) will lose their legal basis and should theoretically be revoked. This will directly reduce the tariff burden on Chinese goods exported to the United States, benefiting relevant Chinese export enterprises.

2 Restrict the unilateral use of tariff tools by the United States against China.

The core of the ruling lies in the strict judicial limitation on the President's power to unilaterally initiate overly broad tariff measures under IEEPA.

• Reasons for "national emergency" are limited: If the U.S. executive branch wishes to impose large-scale tariffs on Chinese goods through IEEPA under a broad "national emergency" (such as trade deficits, specific industrial policies, etc.) in the future, it will face higher legal thresholds and stricter judicial review. The court clearly stated that the trade deficit issue is more suitable for specific procedures and restrictions under non-emergency authorizations such as Section 122 of the Trade Act of 1974.
• Legal basis for "pressure" strategy weakened: The court has questioned the use of tariffs as a "pressure" or "leverage" tool to force China to change its policies in non-trade areas (such as the fentanyl issue), arguing that this does not meet the directness requirement of the IEEPA "intended to address" threats, limiting the U.S. government's use of IEEPA as a comprehensive pressure tool against China. Nevertheless, the following points should still be noted:

The White House has said it will appeal the ruling. The decision of the Court of Appeal will be final and conclusive. The issue of the validity of the original executive order may be complicated during the appeal period. Even if the IEEPA path is blocked, the U.S. government may still seek other legal grounds to impose trade restrictions on China, such as through congressional legislation, stricter application of Section 301 under the Trade Act of 1974 (although it itself faces compliance challenges), Section 232 (national security investigations), or trade remedies such as antidumping and countervailing duties.

In summary, the ruling of the U.S. International Trade Court on May 28, 2025, may directly result in reducing the tariff pressure on Chinese goods. The more important issue is the legal constraints on the U.S. President's unilateral use of the IEEPA as a tool in the trade war against China. However, considering subsequent issues such as the appeals process, the direction of tariffs remains uncertain.