#TrumpTariffs On May 28, 2025, the U.S. Court of International Trade issued a significant ruling that blocked former President Donald Trump's "Liberation Day" tariffs, declaring them unconstitutional and an overreach of executive authority. This decision marks a pivotal moment in the ongoing debate over the limits of presidential power in trade policy.
What Were the "Liberation Day" Tariffs?
Announced on April 2, 2025, through Executive Order 14257, the "Liberation Day" tariffs aimed to impose a 10% baseline duty on all imports, with higher rates—up to 25%—on goods from countries with significant trade surpluses with the U.S., such as China, the European Union, and even allies like Australia and Nigeria. The Trump administration justified these tariffs under the International Emergency Economic Powers Act (IEEPA), citing persistent trade deficits as a national emergency.
The Court's Decision
In the case of V.O.S. Selections, Inc. v. United States, a three-judge panel unanimously ruled that President Trump exceeded his authority under the IEEPA. The court found that:
The economic conditions cited did not constitute an "unusual and extraordinary threat" as required by the IEEPA.
The tariffs represented an improper exercise of legislative power by the executive branch, violating the nondelegation doctrine.
Such sweeping economic measures on trade policy require explicit congressional authorization, aligning with the "major questions" doctrine.
As a result, the court permanently enjoined the enforcement of these tariffs and ordered U.S. Customs and Border Protection to cease their collection.
Global and Economic Implications
The court's ruling had immediate effects on global markets. U.S. stock futures surged, with the S&P 500 E-mini futures rising by 1.5%, and the U.S. dollar appreciated against safe-haven currencies like the yen and Swiss franc. However, the decision does not affect existing tariffs imposed under other statutes, such as Section 232 (national security tariffs on steel and aluminum) or Section 301 (tariffs on Chinese goods due to unfair trade practices).
Impact on African Economies
Nigeria, along with several African nations, was subject to these tariffs, facing a 14% duty on exports to the U.S. The tariffs threatened to nullify the benefits of the African Growth and Opportunity Act (AGOA), which provides preferential trade terms to sub-Saharan African countries. The court's decision offers temporary relief, but the uncertainty surrounding U.S. trade policy continues to pose challenges for African exporters.
The Trump administration has appealed the ruling, and the case may ultimately reach the U.S. Supreme Court. Legal experts suggest that the Supreme Court might uphold the decision, reinforcing the principle that tariff authority lies with Congress. In the meantime, businesses and international partners remain cautious, awaiting clarity on the future direction of U.S. trade policy.