Washington, 29 May

A federal court on Wednesday blocked US President Donald Trump from imposing sweeping tariffs on imports under an emergency-powers law, swiftly throwing into doubt Trump's signature set of economic policies that have rattled global financial markets, frustrated trade partners and raised broader fears about inflation intensifying and the economy slumping.

The ruling from a three-judge panel at the New York-based US Court of International Trade came after several lawsuits arguing Trump has exceeded his authority and left the country's trade policy dependent on his whims.

Trump has repeatedly said the tariffs would force manufacturers to bring back factory jobs to the US and generate enough revenue to reduce federal budget deficits.

He used the tariffs as a negotiating cudgel in hopes of forcing other nations to negotiate agreements that favoured the US, suggesting he would simply set the rates himself if the terms were unsatisfactory.

White House spokesperson Kush Desai said that trade deficits amount to a national emergency “that has decimated American communities, left our workers behind, and weakened our defense industrial base — facts that the court did not dispute".

The administration, he said, remains “committed to using every lever of executive power to address this crisis and restore American greatness".

But for now, Trump might not have the threat of import taxes to exact his will on the world economy as he had intended, since doing so would require congressional approval.

What remains unclear is whether the White House will respond to the ruling by pausing all of its emergency power tariffs in the interim.

Trump might still be able to temporarily launch import taxes of 15 per cent for 150 days on nations with which the US runs a substantial trade deficit.

The ruling notes that a president has this authority under Section 122 of the Trade Act of 1974.

The ruling amounted to a categorical rejection of the legal underpinnings of some of Trump's signature and most controversial actions of his four-month-old second term.

The administration swiftly filed notice of appeal -- and the Supreme Court will almost certainly be called upon to lend a final answer -- but it casts a sharp blow.

The case was heard by three judges: Timothy Reif, who was appointed by Trump; Jane Restani, named to the bench by former president Ronald Reagan; and Gary Katzman, an appointee of former president Barack Obama.

“The worldwide and retaliatory tariff orders exceed any authority granted to the president by IEEPA to regulate importation by means of tariffs,” the court wrote, referring to the 1977 International Emergency Economic Powers Act.

It was filed in the US Court of International Trade, a federal court that deals specifically with civil lawsuits involving international trade law.