(Vermont Business)—The United States Court of International Trade ruled Wednesday that the Trump Administration cannot use emergency powers to institute tariffs, saying that power lies with Congress alone. The court, in a unanimous decision, ordered the tariffs halted. On Thursday the U.S. Court of Appeals for the Federal Circuit granted the Trump administration’s request to temporarily pause the lower-court ruling that struck down most of the tariffs, thus reinstating them. The administration told the court that it might seek “emergency relief” from the Supreme Court.
After the initial ruling by the trade court, the White House in a statement said that an economic state of emergency exists now that allows the president to impose tariffs.
The plaintiffs in the case opposing the tariffs include Burlington-based Terry Precision Cycling, and four other small US businesses, as well as several states, including the State of Vermont.
Nik Holm, President, Terry Precision Cycling, sent VermontBiz this statement: “For over 40 years, Terry Cycling has been committed to making cycling more accessible for women. For us, that means designing and manufacturing technical apparel, saddles and accessories that prioritize comfort, safety, and style, and doing it with integrity. Throughout our history, we have proudly manufactured many of our products in the United States and we are unique in still having much of our production made here. Innovation comes from all parts of the globe, and so do the unique materials and product lines that shape our niche business.
“The recent decision by the U.S. Court of International Trade is a turning point. Not just for us, but for countless small manufacturers trying to compete while staying true to their values and needs of customers. The now-vacated tariffs disrupted our supply chains, added costs, and forced us into months of defensive planning. We had to source new raw materials, rework long-standing partnerships, and test production strategies that pulled us away from what matters most. It was a complete distraction, with no benefit to the rider, for us to spend time knocking ourselves off just to stay afloat.
“This ruling allows us to get back to what we do best: supporting women in cycling, investing in innovation, and planning for the future with confidence. It gives businesses like ours the space to operate without being penalized for sourcing smartly or manufacturing ethically.
“We’re grateful for the support of our board, the Flagg Bicycle Group, and Liberty Justice Center, and we are proud to have played a role in standing up for small businesses. This isn’t just a win for Terry. It’s a win for the cycling industry and the communities we serve.”
Case Summary
The United States Court of International Trade addressed two cases challenging the president’s imposition of tariffs under the International Emergency Economic Powers Act (IEEPA). The plaintiffs, including businesses and states, argued that the tariffs were an overreach of executive power. The court granted the plaintiffs’ motions for summary judgment, ruling that the tariffs exceeded the president’s authority under IEEPA and violated constitutional principles. The court vacated the tariff orders and permanently enjoined their enforcement, emphasizing Congress’s exclusive power over trade policy and the limitations on executive authority in imposing tariffs.
This ruling has significant implications for trade policy, executive authority, and business operations:
- Limits on Executive Power – The court reinforced that the President cannot impose broad tariffs without clear congressional authorization, reaffirming that trade policy is primarily within Congress’s jurisdiction.
- Impact on International Trade – The immediate nullification of these tariffs could lead to shifts in import costs, supply chains, and global trade relations. Companies affected by the tariffs may experience cost relief, while negotiations with trade partners might be recalibrated.
- Legal Precedent – This decision sets a strong precedent that future attempts to impose broad emergency tariffs under IEEPA may face judicial challenges. It clarifies the legal boundaries around emergency economic measures.
- Political & Economic Consequences – Depending on how the government responds (appeals, legislative actions, or policy shifts), this ruling may influence future trade strategies, international relations, and economic stability.
This ruling has significant effects on several industries, particularly those reliant on international trade:
- Retail & Consumer Goods – Companies that import large volumes of goods, such as electronics, apparel, and furniture retailers, may see lower costs as the tariffs are lifted, potentially leading to price reductions for consumers.
- Manufacturing – Manufacturers relying on imported raw materials or components may experience cost relief, enabling them to invest in production capacity or increase hiring.
- Agriculture & Food Processing – Farmers and food producers relying on imported fertilizers, packaging, or machinery may benefit from cost reductions, while exports could improve if retaliatory tariffs by other nations are eased.
- Automotive Industry – Car manufacturers and suppliers dependent on foreign parts might see cost savings, improving their competitiveness and profitability.
- Technology & Electronics – Tech companies, which often source components from overseas, may experience lower production costs, potentially leading to more competitive pricing and innovation.
- Energy & Natural Resources – The ruling specifically affects tariffs on Canadian energy resources, which could lower costs for energy companies and benefit industries reliant on affordable energy supplies.
Author:Timothy McQuiston