Tariff Crackdown: Trump’s Legal Limits Exposed by Court Ruling

A federal court ruling has cast serious doubt on Donald Trump’s ability to reimpose sweeping global tariffs, signalling that future trade action may need firmer legal or legislative footing.

On May 28, 2025, the U.S. Court of International Trade ruled that Trump had overstepped his authority under the IEEPA by using it to justify global tariffs intended to narrow the U.S. trade deficit. The court emphasised that trade imbalances do not qualify as national emergencies under the law.

The court’s injunction takes effect within 10 days, forcing U.S. Customs to stop collecting the invalidated duties. However, sector-specific tariffs under Section 232 — covering cars, steel, and aluminium — remain active and legally justified.

Trade experts say fallback legal options are scarce. Section 122 of the 1974 Trade Act allows only 150-day tariffs capped at 15%. Section 338 and Section 301 offer narrowly defined powers, such as responding to foreign discrimination or IP violations.

Some observers speculate that Trump’s recent, and short-lived 50% tariffs on EU goods, may have been an early attempt to invoke Section 338. But a broader reset may require Congress.

Trade lawyers argue that the administration’s most effective strategy may now lie in changing the law itself. There are already efforts to attach new tariff authority to Trump’s tax bill, currently under review in the Senate.

We’ll continue tracking the legal and legislative manoeuvring closely, keeping you up to date on how it affects trade policy and the wider economic outlook.