Federal court rules Trump exceeded authority with global tariffs as appeals court allows measures to remain for now

On May 28, a federal court in Manhattan ruled that former President Donald J. Trump exceeded his authority when he imposed a 10 percent tariff on nearly all imported goods, including wine, from almost every country. The U.S. Court of International Trade, made up of three judges, blocked the tariffs, which Trump had enacted using emergency economic powers. These tariffs included the so-called “Liberation Day” tariffs announced on April 2 and earlier measures targeting China, Mexico, and Canada. The administration said these actions were meant to address issues such as fentanyl trafficking and persistent trade deficits.

Later that afternoon, a federal appeals court granted the Trump Administration’s request to temporarily pause the lower court’s decision. This means the tariffs will remain in place while the White House prepares its appeal. The legal battle could eventually reach the Supreme Court.

The case was brought by VOS Selections, a small wine importer based in New York. Victor Schwartz, who founded VOS in 1987 and now runs it with his daughter Chloe, said in a statement that the ruling was a victory for small businesses in the U.S. and abroad. Schwartz added that he is prepared to continue fighting the case all the way to the Supreme Court if necessary.

VOS Selections and four other small businesses are represented by the Liberty Justice Center. They challenged the administration’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs. The IEEPA, passed in 1977, gives presidents broad authority to regulate financial transactions during national emergencies but does not specifically mention tariffs. No previous president has used this law to impose tariffs.

The plaintiffs argue that there was no true emergency justifying such sweeping action. Trump has claimed that ongoing trade deficits with other countries amount to an emergency requiring immediate action. Traditionally, Congress enacts tariffs or the Executive Branch imposes them after an investigation by agencies like the U.S. Trade Representative.

During his first term, Trump imposed several targeted tariffs on European wines after such investigations. However, this latest round of global tariffs was broader and did not follow those procedures. In their May 28 order, the judges wrote that IEEPA “does not authorize any of the worldwide, retaliatory or trafficking tariff orders,” and that these actions “exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs.”

The Trump Administration responded strongly to the ruling. White House spokesperson Kush Desai said it is not up to “unelected judges” to decide how to handle national emergencies and reaffirmed Trump’s commitment to using executive power to address what he sees as crises facing America.

For now, wine importers like VOS Selections face continued uncertainty. Since January, they have struggled with unpredictable tariff rates and unclear timelines for how long these measures will last. Many importers say they cannot plan ahead or set prices for customers because they do not know what costs they will face.

The White House is currently negotiating with several countries over trade issues related to these tariffs. If agreements are not reached by July 9, wines from European Union countries could face even higher tariffs—potentially 20 percent or more.

If higher courts uphold the lower court’s decision, not only would these tariffs end, but businesses that paid them could be eligible for refunds. Until then, importers and distributors must wait for clarity as legal proceedings continue and international negotiations unfold.