On Wednesday, May 28, the U.S. Court of International Trade unexpectedly halted President Donald Trump’s plans to impose most of his tariffs, creating additional ambiguity in the global economic environment.

President Trump’s tariffs have unsettled international commerce, and the often erratic implementation of his “Liberation Day” tariffs has caused price increases, fierce political conflicts, and high-stakes discussions with both allies and rivals.

A trio of judges at the federal trade court found that the president exceeded his authority by imposing tariffs through emergency powers. The U.S. Constitution allocates the power to regulate tariffs to Congress, but the Trump administration asserted this power, citing the decline of manufacturing jobs, fentanyl trafficking, and trade deficits as urgent national issues.

The court evaluated if the International Emergency Economic Powers Act of 1977 (IEEPA) permits the president to levy unlimited tariffs on products from almost every nation. The judges invalidated many of Trump’s tariffs, which are central to his economic strategy. The New York Times notes that no president has ever sought to implement tariffs under the IEEPA before.

The ruling indicates that the president “has declared several national emergencies and imposed various tariffs in response,” as well as undertaking “a number of pauses and modifications.” The judges concluded that allowing the president unfettered tariff powers is unconstitutional and that Congress cannot indefinitely delegate these powers to the executive branch. Consequently, they determined that the “IEEPA does not empower any of the Worldwide, Retaliatory, or Trafficking Tariff Orders.”

This case was brought forward by several states that have incurred import duties since the implementation of the tariffs.

The three-judge panel consists of a judge appointed by President Trump, along with judges appointed by Ronald Reagan and Barack Obama, according to the Associated Press.

What is the next step?

Since assuming office 129 days ago, President Trump has often faced obstruction from federal judges regarding his novel presidential powers. This recent defeat could significantly affect the Liberation Day tariffs. The White House has 10 days to adhere to the decision, as reported by The New York Times.

Nevertheless, this does not automatically imply the end of Trump’s tariffs. Future tariffs, such as the recently suggested smartphone tariffs on iPhones, may still be established by Congress. It is also highly probable that the White House will contest this ruling in the Supreme Court, which has previously overturned various federal court rulings that blocked the president’s executive orders and actions.

President Trump appointed three conservative justices who form a majority on the Supreme Court, although these justices have sometimes ruled contrary to his interests.

Republicans in Congress continue to show significant loyalty to the president. They could restore the Trump tariffs under their jurisdiction, effectively acting as a rubber stamp for the Trump administration.

“It is not for unelected judges to determine how to adequately respond to a national emergency,” stated White House spokesperson Kush Desai in a remark reported by Axios. “President Trump committed to prioritizing America, and the Administration is dedicated to employing every aspect of executive power to tackle this crisis and restore American Greatness.”