A federal court has declared President Trump’s “Liberation Day” tariffs illegal, stating that he does not have “unbounded authority” to impose across-the-board import taxes on the entire world. The decision could upend the administration’s goal of using tariffs as a negotiating tool to close America’s trade deficit. Lawyers for Mr. Trump said they would appeal the trade court’s decision.

The Court of International Trade — a relatively obscure, Article III panel based in New York — has all the powers of a federal district court in issuing orders. Like the Supreme Court, the Trade Court has nine active members, six appointed by Democratic presidents and three appointed by Mr. Trump himself. Senior judges will sometimes take part in the process, however. 

The decision to declare the Trump tariffs illegal was simply signed “by the panel” and was released on Wednesday night. Arguments were made in front of Judge Gary Katzmann, an Obama appointee, Judge Timothy Reif, a Trump appointee, and senior Judge Jane Restani, a Reagan appointee. 

In their decision, the judges write that Mr. Trump’s invocation of the International Emergency Economic Powers Act was an overstep, thus nullifying his tariffs from early April that helped send markets spiraling and bond yields soaring. 

The jurists write that taxation and trade are primarily the purview of Congress, and thus the executive may not use tariff powers in the way that Mr. Trump has. 

In a statement to the Sun, the White House deputy press secretary, Kush Desai, says the court decision will not deter the president.

“Foreign countries’ nonreciprocal treatment of the United States has fueled America’s historic and persistent trade deficits,” Mr. Desai says. “It is not for unelected judges to decide how to properly address a national emergency. President Trump pledged to put America First, and the Administration is committed to using every lever of executive power to address this crisis and restore American Greatness.”

The court writes that because Mr. Trump imposed some of the tariffs without “any identifiable limits,” he is essentially stepping on Congress’s Article I authorities, and ignoring legislative actions in the last 100 years that have expressly been made to limit the executive’s broad powers in declaring national emergencies and imposing trade barriers outside times of war. 

“An unlimited delegation of tariff authority would constitute an improper abdication of legislative power to another branch of government,” the court writes. “Regardless of whether the court views the President’s actions through the nondelegation doctrine, through the major questions doctrine, or simply with separation of powers in mind, any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”

The court further writes that past precedent giving the executive the power to “regulate” imports does not apply with respect to Mr. Trump’s national emergency declaration and imposition of tariffs under IEEPA because it would constitute an “unconstitutional delegation of power.”

The jurists cite Federalist 51 — co-authored by Alexander Hamilton and President Madison — in declaring that Mr. Trump’s import taxes threaten the “separate and distinct exercise of the different powers of government,” which are “essential to the preservation of liberty.”

The court furthers tears down Mr. Trump’s assertion that America’s trade deficit with other nations represents a legitimate rationale for imposing tariffs. They say that Congress has not given the executive branch unlimited power to address those kinds of balance of payment issues. 

“Worldwide and Retaliatory Tariffs do not comply with the limitations Congress imposed upon the President’s power to respond to balance-of-payments deficits,” the judges write. “The President’s assertion of tariff-making authority in the instant case, unbounded as it is by any limitation in duration or scope, exceeds any tariff authority delegated to the President under IEEPA.”

The court’s decision comes in response to two lawsuits — one brought by a coterie of Democratic state attorneys general, and one by a group of small businesses that will be harmed by the import taxes. 

Justice department lawyers, in a filing on Wednesday evening, said they planned to appeal the trade court’s decision to the federal circuit of the United States Court of Appeals.