Markets rose and fell this week after courts struck down Trump’s tariffs—and brought them back. On May 28, the US Court of International Trade struck down 17 executive orders and ruled that Trump overstepped his authority by using the International Emergency Economic Powers Act (IEEPA) to justify his global tariffs. Less than 24 hours later, the Court of Appeals for the Federal Circuit kept the tariffs in effect while it considers a more permanent stay. That same day, the D.C. Circuit court also found that the tariffs were unauthorized. While these decisions might be a setback for the Trump administration, the courts laid out a clear alternative path for legal enactment of tariffs. Trump will not chicken out of his entire tariff agenda. He is already preparing for it to continue in a different form. The court rulings pave the way for Trump to declare a political victory–and for Congress to make democracy great again.
Trump Justified His Tariffs By Economic “Emergency”
President Trump uses IEEPA to justify his worldwide universal tariffs, as well as tariffs related to the national emergencies he has declared since taking office in 2025. Congress enacted IEEPA in 1977 to allow the President to regulate international commerce after declaring a national emergency in response to “unusual and extraordinary threats” to the national security, foreign policy, or economy of the United States. Past presidents have used IEEPA to impose sanctions or restrict financial transactions in response to specific threats. For example, President Biden used IEEPA to impose sweeping sanctions on Russia within hours of its 2022 invasion of Ukraine. Before Trump, no president had used IEEPA to impose broad tariffs based on general economic concerns.
The Court of International Trade held that IEEPA did not authorize the President to impose such sweeping tariffs. The Constitution grants Congress power over interstate commerce, and Congress did not delegate the power to enact broad tariffs to the President under the guise of an economic emergency when it enacted IEEPA. The tariffs are also not tailored to deal with the specific threats set forth in Trump’s executive orders. The D.C. district court case followed similar logic. Three other cases are currently pending in federal courts that challenge Trump’s authority to impose tariffs under IEEPA. The courts’ decisions this week suggest that other cases are likely to succeed.
How Trump Tariffs Can Continue
However, tariffs are not dead yet. The Court of International Trade decision outlined several alternatives for the Trump administration to pursue its tariff agenda. Thee different statutes would allow the Trump administration to advance its goals, subject to procedural checks on its power. Section 232 of the Trade Expansion Act of 1962 allows the President to impose tariffs or other trade restrictions based on national security concerns. The Department of Commerce must first investigate whether specific imports threaten to impair US national security. The Trump administration used this statute to implement 25% tariffs on steel and aluminum in March. The Trump administration has already asked the Department of Commerce to investigate threats to national security from imports of copper, semiconductors, critical minerals and derivative products, and pharmaceuticals.
Section 301 of the Trade Act of 1974 authorizes the U.S. Trade Representative to retaliate against unfair foreign trade practices. Procedurally, the USTR investigates and consults with the foreign government, and then the president can impose tariffs or retaliate. The first Trump administration used this act to tariff Chinese goods after finding that China engaged in unfair intellectual property practices. On his first day in office, President Trump directed the USTR to review a Biden Administration report on technology transfer, intellectual property, and innovation and consider additional tariffs accordingly. In April, the USTR concluded an investigation into China’s policies targeting the maritime, logistics, and shipbuilding sectors, leading to fees aimed at restoring American competitiveness in these industries. The Trump administration could potentially impose additional tariffs based on these findings.
The Court of International Trade also mentioned a never-used provision of the Trade Act of 1974 with significant relevance for Trump’s agenda. Section 122 allows the president to impose tariffs for 150 days in the event of a balance of payments deficit—the rationale behind many of Trump’s tariffs. Extensions beyond 150 days would require an act of Congress. This provision would allow the President to act quickly to impose tariffs and time to convince Congress that extensions are necessary. The current Congress would be likely to authorize an extension.
Not mentioned in the CIT decision—and likely riskier—is section 338 of the Tariff Act of 1930. This nearly 100-year-old law allows the president to impose tariffs up to 50% on countries that have “discriminated against commerce of the United States” via their domestic laws as compared to the commerce of other foreign countries. The U.S. International Trade Commission must first conduct an investigation. The provision has never been used to impose tariffs, and has not been discussed in public records since the 1940s. Section 338 tariffs would likely run afoul of U.S. commitments to the World Trade organization and existing trade agreements.
The Trump administration had hoped that IEEPA would allow it to block a broad swath of transactions without procedural hurdles or time-consuming investigations. However, the court rulings have made clear that the President can still enact much of his tariff agenda without IEEPA. Moreover, the Trump administration has wisely already set the gears into motion to remake the tariffs under the alternative, trade-focused statutes. By the time the courts decide the IEEPA cases, Trump may have tariffs in place on more solid legal ground.
Trump Tariffs Court Loss Is A Political Win
Paradoxically, the administration’s loss in the CIT allows President Trump to still claim victory. When the 90-day universal tariff pause ends on July 9, the President can claim that while the judges he hates are slowing him down, he’s not chickening out. He’s finding new ways to fulfill his agenda in spite of them. Issuing more narrow, targeted tariffs under the alternative trade-focused statutes will likely be less economically disruptive than enacting the universal tariffs and broader tariffs under IEEPA. Narrower tools can also better target real national security threats.
More important, limiting the president’s authority to impose tariffs under IEEPA would be a victory for the rule of law. Trump has declared more emergencies than any other modern president—eight since he entered office in January. Three remain ongoing from his prior administration. In a constitutional democracy, declaring an “emergency” cannot give the president unlimited power. The courts are calling on Congress to use its authority, or to more clearly define the scope of the authority it delegates to the President. It’s up to Congress to answer the call.
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