The Trump administration's sweeping tariffs, known as 'Liberation Day' tariffs and implemented under the International Emergency Economic Powers Act (IEEPA), have been declared unlawful by two federal courts. On May 28, 2025, the U.S. Court of International Trade ruled that President Donald Trump exceeded his statutory authority by imposing broad tariffs, finding that trade imbalances and economic concerns do not constitute the 'unusual and extraordinary threat' required by IEEPA. The following day, U.S. District Judge Rudolph Contreras in Washington, D.C., issued a similar ruling, specifically blocking the administration from collecting tariffs from two small businesses, Learning Resources Inc. and hand2mind. Despite these rulings, the tariffs—including a 30% tariff on imports from China, 25% on many goods from Mexico and Canada, and 10% on other trading partners—remain in effect after the U.S. Court of Appeals for the Federal Circuit issued a temporary pause while the Trump administration appeals. The administration has also asked the D.C. Circuit to pause the district court's order, arguing that removing the tariffs would jeopardize ongoing trade negotiations and threaten U.S. national security. Senior officials, including Secretary of State Marco Rubio and U.S. Trade Representative Jamieson Lee Greer, have supported this position in court filings. Small businesses, particularly those reliant on Chinese manufacturing, have faced significant financial strain due to the tariffs. Learning Resources Inc. reported its import tax bill could rise from $2.3 million to over $100 million if the 145% tariff rate is enforced. Many small businesses have called for the suspension of tariffs during the appeals process, citing immediate harm and economic uncertainty. The legal battle has prompted legislative responses, such as the proposed Trade Review Act of 2025, sponsored by Senators Maria Cantwell and Chuck Grassley, which seeks to limit presidential tariff powers by requiring congressional approval for tariffs lasting beyond 60 days. The outcome of the appeals and potential Supreme Court involvement will determine the future scope of executive authority over tariffs.