Donald Trump's tariffs were declared illegal by a US trade court late on Wednesday, in a unanimous decision that found the president had wrongfully invoked emergency laws.
The Court of International Trade said the US Constitution stipulates that only Congress has the authority to regulate commerce with other countries, something the president cannot override with his emergency powers.
Trump and his officials had imposed the tariffs under the International Emergency Economic Powers Act, but this was challenged by a lawsuit brought by a conservative group that represented small businesses.
But the court imposed a permanent injunction on the blanket 10% tariff orders issued by Trump in January, plus the 20% tariff on imports from China as well as the 25% tariff on Canadian and Mexican imports not in compliance with the USMCA free-trade pact.
A few exceptions were not covered by the ruling, including the tariffs on steel, aluminum and automobiles.
"The court does not pass upon the wisdom or likely effectiveness of the President's use of tariffs as leverage," the panel said in its decision. "That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it."
The court gave the Trump administration 10 days to "effectuate" the order but did not specify how the tariffs should be unwound.
The Trump administration immediately appealed the decision, with the Justice Department issuing a filing with the US Court of Appeals and commentary suggesting the case could go to the Supreme Court, where six of the nine justices are Republican appointees.
Financial media reports also suggested there were several other avenues for the US to impose levies on imports.
Deutsche Bank analysts said if the court ruling remains, Trump has other means to pursue his tariff goals with one option being "to expand the use of other tariff instruments, like the Section 232 on national security grounds, which have been used for autos, steel and aluminium tariffs".