The U.S. Court of International Trade said the president had overstepped his authority under the federal emergency powers law he invoked.
A panel of federal judges on Wednesday blocked President Trump from imposing some of his steepest tariffs on China and other U.S. trading partners, finding in two cases that he vastly overstepped his ability to issue those expansive duties under federal law.
The ruling, by the U.S. Court of International Trade, delivered an early yet significant setback to Mr. Trump in his campaign to strike a series of agreements that reorient the nation’s trading relationships, setting up a legal fight that could soon reach the Supreme Court.
The cases centered on the president’s use of a 1977 federal economic emergency law to issue many of his steep duties, including some of his tariffs on Canada, Mexico and China, and his “reciprocal” rates on much of the rest of the world, which Mr. Trump announced and then suspended in April.
The law does not specify tariffs as a tool available to the president to protect the United States from economic threats. But Mr. Trump has invoked its powers anyway, citing a need to take drastic action in response to a wide variety of urgent matters — including the flow of fentanyl into the United States, for example, and the country’s persistent trade deficit with much of the world.
In two separate lawsuits, a group of businesses and a coalition of state officials argued that Mr. Trump’s strategy had overstepped the authorities of his office, resulting in a global trade war that had saddled them with steep financial losses. The Court of International Trade agreed, finding in a single ruling that the law “does not authorize” the president to use the emergency powers law to issue tariffs.
Kush Desai, a White House spokesman, sharply rebuked the court for its ruling, saying in a statement that unfair trade relationships had “decimated American communities, left our workers behind and weakened our defense industrial base — facts that the court did not dispute.”