A U.S. international trade tribunal has ruled against the reciprocal tariffs imposed by the Trump administration, determining that such measures exceed the powers granted to the President under existing economic laws.

The three-judge panel concluded that while the United States retains the ability to increase tariffs on imports, the authority to do so lies within the purview of Congress.

The court highlighted that President Trump overstepped his bounds by invoking the International Emergency Economic Powers Act (IEEPA) of 1977 to justify unlimited tariffs on nearly all imported products.

The court stated that the IEEPA allows the President to implement necessary economic sanctions in the event of an extraordinary and unusual threat, but it does not grant unlimited authority to impose tariffs.

This ruling specifically impacted tariffs on imports from Canada, Mexico, and China, which have been criticized for inadequate measures against fentanyl trafficking, as well as a broad tariff increase initiated on April 2 that affected nearly all goods entering the U.S.

The judges emphasized in their ruling that any interpretation of the law that grants unlimited tariff authority to the President would be unconstitutional.

According to the court, such an interpretation would represent a significant encroachment on legislative powers, undermining the constitutional separation of powers.

In a concurring opinion, an unnamed judge noted that permitting the executive branch an unchecked authority over tariffs would lead to a substantial shift of legislative power to the executive, which contravenes the U.S. Constitution.

A spokesperson for the White House criticized the decision, referring to the judges as "unelected" officials who lack the authority to dictate the management of a national emergency.

The spokesperson, Kush Desai, reiterated Trump's commitment to prioritizing American interests and utilizing executive power to address economic challenges.

In response to the ruling, the Trump administration signaled its intention to appeal, as confirmed by a court document.

The legal challenge arose from two separate lawsuits filed recently, one by a coalition of twelve U.S. states—including Arizona, Oregon, New York, and Minnesota—and another by various American businesses.

They contended that Trump improperly used emergency provisions to impose tariffs that constitutionally belong to the legislative branch.

Since his return to office, Trump has utilized tariffs as a principal tool in his trade policy, aiming to encourage domestic reindustrialization while leveraging pressure on other nations.

On April 2, Trump announced the imposition of what he termed 'reciprocal' tariffs, affecting all countries, although he later paused the implementation of tariffs exceeding 10% in response to falling financial markets, allowing for potential negotiations.

Following a retaliatory move by Beijing, which raised its own tariffs in response to those from Washington, the two largest economies engaged in escalating tit-for-tat tariff increases.

These tariffs surged to 125% on U.S. products and 145% on Chinese goods, well above the prior levels before April 2. However, by mid-May, the two nations reached an agreement to revert the tariffs to 10% on American goods and 30% on Chinese products.

On the same day of the ruling, Trump publicly criticized the European Union, alleging a lack of willingness to negotiate a commercial agreement with the United States and threatening to impose 50% tariffs on goods from the 27-member bloc, though he subsequently announced a pause on the tariffs until July 9.