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Aug. 14 (UPI) — A federal trade court threw out a legal challenge to President Trump’s executive order scrapping the so-called “de minimis” exemption loophole under which goods worth less than $800 could enter the United States duty free.

Three judges sitting in the U.S. Court of International Trade ruled Thursday that Trump had the legal authority to invoke the International Emergency Economic Powers Act to eliminate de minimis, in contrast to his April 2025 “liberation day” global tariffs which it ruled were unlawful, a decision the Supreme Court subsequently upheld.

“In reaching this conclusion, we find that the President’s power to ‘nullify [or] void . . . exercising any . . . privilege’ does not run afoul of separation of powers principles,” they wrote in their judgment.

The judges found the removal of the exemption did not constitute “an exercise of the power of the purse” and “is not an exercise of the power to legislate.”

In the global tariffs case, the Supreme Court came to the opposite conclusion, ruling that Trump could not act without approval from Congress.

Trump hailed Thursday’s ruling as a “big win” for his resolve to get rid of what he said was a “ridiculous giveaway… one of the most DESPICABLE loopholes in American Trade Policy” that he said was costing the U.S. Treasury more than $10 billion in revenue from tariffs that it would otherwise receive.

“For years, Foreign Shippers could send packages worth up to $800 into our Country, DUTY FREE, NO TARIFF, far less scrutiny. It became a giant loophole for TARIFF Cheats — and a Pipeline exploited by Fentanyl Traffickers, Counterfeiters, and other Criminals shipping dangerous and illegal products into America. The numbers were staggering. In 2024 alone, de minimis cost America an estimated 10.8 BILLION DOLLARS in foregone TARIFF Revenue, and an astonishing share of narcotics and counterfeit seizures came through the de minimis channel,” said Trump.

Detroit Axle, a Michigan-based auto-parts distributor, brought the de minimis case last year on grounds Trump had overstepped his authority under IEEPA. The firm’s legal counsel did not immediately comment on the ruling.

U.S. Customs and Border Protection netted more than a billion dollars in 2025 from the ending of de minimis and the court ruling clears the way for it to continue until it is permanently eliminated when Trump’s One Big Beautiful tax cut and spending bill kicks in next July.

Tariffs apply to Canadian wine, hockey sticks, cement, and other products, sparking fears of escalating trade tensions.

US President Donald Trump will impose new 50 percent tariffs on many Canadian goods, claiming “discriminatory treatment” by Ottawa against US alcohol, automobile and dairy products.

The tariffs, ordered by Trump on Monday, will take effect in 30 days and cover a range of items, including wine, hockey sticks, and cement, according to a White House fact sheet.

Trump, who saw many of his tariffs struck down by the Supreme Court earlier this year, is using an untested legal provision for the new duties: Section 338 of the Tariff Act of 1930.

The latest duties will not apply to energy, potash, and goods already impacted by sector-specific tariffs, the White House said.

Crucially, however, they will hit products covered under the US-Mexico-Canada free trade agreement (USMCA).

The tariff announcement quickly raised concerns of escalation among some businesses.

While Trump has slapped sweeping duties on US trading partners since returning to the presidency last year, the orders generally exempted goods entering his country under the North American free trade pact.

His latest actions threaten to further strain ties with the second-largest US trade partner and come just days after he threatened Canada with increased tariffs over a wave of wildfire smoke that descended on the US.

The White House, in announcing the new tariffs, said Canada was one of only two countries – along with China – to retaliate against Trump’s tariffs last year.

It also took aim at the fact that most Canadian provinces have stopped buying US alcohol, boycotting the products over Trump’s tariff threats and repeated calls for annexation of Canada as America’s “51st state”.

“Canada has taken US alcohol products off Canadian shelves, given better market access to dairy products from the European Union, and has put a cap on US vehicle exports to Canada from companies reshoring to the United States,” US Trade Representative Jamieson Greer charged in a statement.

The tariff announcement aims to “hold Canada accountable for its retaliation and discrimination”, he added.