May 29, 2025
On Wednesday, May 28, the U.S. Court of International Trade halted President Trump’s sweeping “Liberation Day” tariffs—ruling that the administration exceeded its legal authority under emergency powers. For global shippers, this decision hits pause on one of the most aggressive trade measures proposed in recent years.
What Happened
The Liberation Day tariffs were set to impose a 10% baseline duty on nearly all imports, with surcharges targeting countries with large U.S. trade surpluses—notably China, the EU, and Vietnam. The administration cited national security risks under the International Emergency Economic Powers Act (IEEPA), linking trade deficits to a state of emergency.
The court disagreed. In a major constitutional rebuke, judges ruled that trade deficits do not meet the threshold of an “extraordinary threat” under IEEPA—and that tariff authority rests with Congress.
The injunction blocks implementation and mandates that customs systems reflect the ruling within 10 days.
Legal Fight Isn’t Over
- The administration has filed an appeal, setting the stage for a potential Supreme Court review.
- Experts say the White House may explore a workaround using Section 122 of the 1974 Trade Act, allowing temporary tariffs tied to balance-of-payment concerns.
So while the current tariff threat is paused, the policy remains very much in motion.
Markets React with Relief
- Dow Jones surged 550+ points following the decision.
- U.S. dollar strengthened, signaling investor confidence in trade stability.
Shippers now have a short window of predictability, but it may not last long.
What Shippers Should Do Now
This ruling won’t be the last word on tariffs this year. For supply chain teams:
- Stay vigilant: Legal and trade policy moves will remain unpredictable.
- Revisit landed cost models and supplier exposure.
- Consider contractual flexibility if tariffs return under different legal grounds.
The Bottom Line
The court’s ruling reinforces that tariff authority lies with Congress—not the White House. But with appeals underway, and November approaching, U.S. trade policy remains in flux.
The BlueCargo team will be in Chicago this June at Reuters Supply Chain USA 2025.
If you're attending, meet us there to talk freight auditing, tariff risk, and how to turn uncertainty into operational advantage.
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