A U.S. federal court has ruled that President Donald Trump exceeded his authority by imposing sweeping tariffs on imports under the International Emergency Economic Powers Act (IEEPA).
The Court of International Trade in New York found that this 1977 law does not authorize the president to unilaterally impose tariffs on nearly every trading partner.
The ruling immediately suspended many of Trump’s tariffs, including the 10% tariffs on most countries and specific levies on China, Canada, and Mexico.
However, tariffs on steel, aluminum, and automobiles were not affected by this decision. The White House quickly appealed the ruling, and the long-term legal outcome remains uncertain.
Financial markets reacted positively to the court’s decision. U.S. futures surged, with the S&P 500 rising 1.5% and the Dow Jones Industrial Average gaining 1.2%. Oil prices increased by over $1 per barrel. The U.S. dollar strengthened against the yen and euro.
Global markets showed gains as well. Japan’s Nikkei 225 jumped 1.9%, South Korea’s Kospi rose 1.9%, and Hong Kong’s Hang Seng added 1.3%. European indexes also moved higher, with Germany’s DAX up 0.5% and France’s CAC 40 climbing 0.9%. Some Asian markets like Taiwan’s Taiex and India’s Sensex saw slight declines.
The court emphasized that Congress holds the sole power to regulate international trade, and the president’s use of emergency powers for broad tariffs was unconstitutional. The judges noted that the tariffs aimed at addressing trade imbalances do not qualify as emergency measures under IEEPA.
The ruling offers temporary relief to businesses and consumers affected by the tariffs, which have caused uncertainty and disrupted global trade. However, the Trump administration remains committed to its tariff strategy, arguing that trade deficits create a national emergency that justifies such actions.
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