A court strikes down Trump's tariffs, for now

In a bombshell ruling that threw trade policy into chaos, the US Court of International Trade (CIT) struck down the administration’s sweeping across-the-board tariffs on 28 May, declaring the use of emergency powers under the International Emergency Economic Powers Act (IEEPA) an unconstitutional overreach. However, the legal victory was short-lived: the administration secured an emergency administrative stay the following morning.

The Institutional Friction of Policy by Decree

The CIT’s ruling highlighted the profound institutional fragility of governing commercial trade through emergency executive declarations. The court determined that chronic bilateral trade deficits do not constitute an 'unusual and extraordinary foreign threat' justifying sweeping unilateral border taxes without congressional authorization. While the appellate stay keeps tariff collections operational for now, the litigation creates a massive cloud of judicial uncertainty over billions in deposited border duties.

Customs Escrow and Working Capital Freeze

For corporate importers, the legal whipsaw represents an operational nightmare. Companies must continue paying non-refundable duties under protest, tying up hundreds of millions in working capital while hoping for eventual judicial refund mandates. The CIT ruling demonstrates that trade policy by emergency decree rests on treacherous legal foundations, transforming customs compliance into a multi-year litigation lottery that paralyzes corporate investment.