Tariff Turbulence: What the Latest U.S. Court Ruling Means for Fashion Sourcing

On May 28, headlines broke across major outlets as a federal court ruled that a large portion of former President Trump’s tariffs were unlawfully imposed—sparking immediate interest and concern across multiple industries, including fashion, about what this could mean for future sourcing strategies.

The ruling, issued by the U.S. Court of International Trade (USCIT), said that most of the tariffs based on broad national emergency claims were not legally allowed.

In a landmark decision, the court found that President Trump had exceeded his legal authority, invalidating four of his executive orders.

The outcome could mark a pivotal shift in how trade policy—and particularly the use of emergency powers to justify tariffs—is governed in the United States.

In a historic ruling, the court declared that four of President Trump's executive actions were unconstitutional because he had overreached his lawful authority.

Here’s what’s important to know and what happened:

USCIT’s Tariff Ruling Rolldown

Handed down on May 28 by a three-judge panel at the U.S. Court of International Trade (USCIT) in New York, the court ruled against key aspects of former President Trump’s recent tariff expansions.

As reported by Time Magazine, Trump had invoked the International Emergency Economic Powers Act of 1977 (IEEPA) to justify a wave of tariffs—marking the first time this emergency authority had been used in a trade context.

These included his widely criticized April 2 “Liberation Day” tariffs, which targeted dozens of countries with so-called "reciprocal" duties due to their trade surpluses with the U.S., as well as earlier tariffs on Canada, Mexico and China, introduced under the pretext of curbing fentanyl imports.

Several states challenged the legality of these actions, asserting that Trump had overstepped his authority under IEEPA.

• What the Court Ordered (as of May 28):

  • Trump was given 10 days to comply with the decision and enforce the injunction.

  • Four executive orders were deemed invalid and ordered to be repealed.

    
    

• What Remained (Temporarily):

  • Tariffs on steel, aluminum, and automobiles (25%) remained intact but were placed under review by the U.S. Commerce Department.

  
  

• Why Some Tariffs Were Still Permitted:

  • The ruling reaffirmed that the President can still impose certain tariffs under Section 232 of the Trade Expansion Act of 1962, provided the Commerce Department finds that such imports threaten U.S. national security.

Tariff Updates Are in Constant Flux

It’s important to recognize that these rulings are not the end of the story.

As of May 30th, for example, an appeal was filed to reinstate the very tariffs that the USCIT had just struck down.

During a recent segment on Yahoo News, Alexis Keenan, Finance Legal Reporter for Yahoo Finance, explained that:

"This is the appellate court stepping in here and reinstating these tariffs and saying it needs some time to look at the motions, look at briefings, look at the issues. So the appeals court seeming here to put this pause into effect, and they're asking the administration to give briefings to the court no later than June 9th."

This reflects a broader reality we're seeing: a legal and regulatory ping-pong effect, where decisions are being made, overturned, appealed, and challenged again in real time.

This constant back-and-forth creates uncertainty not only for government policy but also for businesses—especially in industries like fashion.

And while it may feel exhausting to keep up, staying informed is crucial.

How New Tariff Decisions Could Reshape Fashion Sourcing

If—and when—the rollback of these tariffs is decided, following the ongoing appeals process, the decision has the potential to encourage more standardized, transparent, and legally grounded trade regulations by challenging the broad, unchecked use of emergency powers for imposing tariffs.

But we’re not there yet. So, with no final ruling in place, uncertainty remains the status quo, and these are the realities the fashion industry may be forced to navigate in the near term:

• Short-Term Uncertainty on Trade Agreements

  Brands may face a temporary "wait-and-see" period as the U.S. government decides how to respond, appeal, or adjust trade policy. This pause could delay key sourcing decisions, especially for brands planning fall/winter production runs.
  
  

• Reopened Sourcing Routes from China, Mexico, and Canada (Possibly)

  If the injunction is enforced and reciprocal tariffs are lifted, cost structures for materials and finished goods from previously penalized countries may improve. Brands that had paused supplier relationships in these regions might reassess their sourcing maps.
  
  

• Mixed Reactions from Suppliers Abroad

  Some international suppliers might become more competitive again (especially in China), but others—who benefited from the diversion of U.S. sourcing—could face reduced demand, potentially impacting their pricing strategies or production timelines.
  
  

• Exchange Rate Volatility and Political Response

  Any shift in tariff enforcement can affect exchange rates and provoke political responses from trade partners. Brands sourcing across regions should track currency trends closely and plan for potential cost swings.
  
  

The Bigger Picture

These recent movements in trade policies highlight, once again, a well known truth: sourcing today operates in a volatile trade environment where political shifts can instantly reshape cost structures and supply dynamics.

As Jeanine Ballone, World Collective’s CEO and expert in supply chain product development, puts it:

“Trade policies may shift, but uncertainty is here to stay. This reversal highlights what we’ve known all along—the global sourcing system is reactionary, fragile, and overdue for a serious upgrade.”

The most resilient brands don’t treat trade as a fixed backdrop—they treat it as a moving variable. That means building regional flexibility, monitoring policy developments closely, and having systems in place that can shift with the market.

This is how modern sourcing stays competitive.

Explore our digital textile sourcing marketplace—built to help brands stay agile, traceable, and informed in a trade landscape that’s constantly evolving.

Written by Maria Eugênia Lima, Content & Marketing Intern at World Collective