Explained: Donald Trump's Liberation Day Tariffs, Why They Were Blocked

A federal court has blocked US President Donald Trump's proposed tariffs under his 'Liberation Day' plan. The court said Trump exceeded his authority by trying to impose sweeping tariffs on countries with large trade surpluses against the US.

The Court of International Trade, based in Manhattan, declared that the emergency law cited by Trump did not permit the president to unilaterally impose tariffs on nearly every country. The court said that under the US Constitution, only Congress held the power to regulate international commerce.

The Trump administration immediately filed an appeal against the ruling.

What Were Donald Trump's 'Liberation Day' Tariffs?

On April 2, Donald Trump announced a new tariff regime named the "Liberation Day" plan. 

Framed as a declaration of economic independence, the policy aimed to address trade imbalances and protect national security. These tariffs were justified under the International Emergency Economic Powers Act (IEEPA), citing persistent trade deficits as a national emergency. He even cited threats from Mexican drug cartels to press his case.

Effective April 5, a 10 per cent tariff was imposed on all imports, excluding certain energy products and minerals not available domestically.

Starting April 9, elevated tariffs were applied to countries with significant trade surpluses with the US. The rates of some of them were:

• Cambodia: 49%
• Vietnam: 46%
• China: 34% (in addition to existing tariffs)
• India: 26%
• European Union: 20%

The $800 de minimis threshold for duty-free imports from China was removed effective May 2, with plans to extend the move to other countries.

Following market volatility and criticism from business leaders, Trump announced a 90-day pause on the higher reciprocal tariffs on April 9. This pause applied to all countries except China, whose minimum tariff rate was increased to 145 per cent, as per Reuters. The universal 10 per cent tariff remained in effect during this period.

Amid rising global tension, over 75 countries chose to negotiate instead of retaliate. Trump said the pause was a goodwill gesture to "recalibrate" global trade relationships, though China was excluded.

Eventually, on May 12, the Trump administration announced a 90-day mutual tariff freeze with China, allowing space for broader trade talks.