A U.S. federal court delivered a major setback to former President Donald Trump’s trade agenda on Thursday, blocking most of his sweeping tariffs from taking effect. The decision sent global financial markets higher, even as the White House moved swiftly to appeal the ruling and condemned it as an overreach by “unelected judges.”
The three-judge panel from the U.S. Court of International Trade ruled that Trump had exceeded his presidential authority by imposing extensive tariffs under the International Emergency Economic Powers Act (IEEPA). The court determined that the law, which allows a president to respond to “unusual and extraordinary threats,” does not confer unlimited tariff power.
Blow to Trump’s Global Trade War
The ruling marks a significant obstacle for Trump’s efforts to overhaul U.S. trade relations through aggressive tariffs targeting major economies including China, Canada, Mexico, and the European Union. Trump had argued that America’s trade deficits and the influx of illegal drugs amounted to a national emergency warranting sweeping import duties.
Since taking office, Trump’s tariffs — often announced with little warning — rattled financial markets and stoked global trade tensions. Thursday’s court decision, however, invalidates many of the levies imposed since January, including those set on key U.S. trading partners under emergency powers.
Markets Rally After Court’s Decision
Global markets responded positively to the court’s ruling. Asian indices climbed sharply, with Japan’s trade envoy Ryosei Akazawa noting that Tokyo would carefully review the decision as it prepared for a new round of talks in Washington. European and U.S. futures also pointed to early gains as investors anticipated a potential easing in trade hostilities.
White House Condemns ‘Judicial Coup’
The White House quickly denounced the ruling, with a spokesperson accusing the judiciary of interfering in executive matters. “President Trump pledged to put America first, and the administration remains committed to restoring American greatness,” spokesman Kush Desai said.
Top Trump adviser Stephen Miller took to social media to decry what he called a “judicial coup,” claiming the courts were attempting to undermine presidential authority.
The Justice Department promptly filed an appeal, signaling that the administration would continue to fight for its trade measures.
Legal Limits on Presidential Tariff Powers
The court emphasized that any interpretation of the IEEPA granting “unbounded authority” to impose tariffs would be unconstitutional. The ruling was in response to two lawsuits brought by businesses and state governments challenging Trump’s unilateral trade actions.
“The court does not read IEEPA to confer such unbounded authority,” the panel wrote in its unsigned opinion. It gave the administration 10 days to initiate the process of halting the affected tariffs.
Representative Gregory W. Meeks, the top Democrat on the House Foreign Affairs Committee, hailed the decision as a check on executive overreach. “Trump’s declaration of a bogus national emergency to justify his global trade war was an absurd and unlawful use of IEEPA,” Meeks said.
Economic Impact and Outlook
While Trump has touted early trade deals with Britain and China as victories for his tough stance, analysts caution that the broader tariffs risk driving up costs for American consumers. Economists warn that higher import duties could fuel inflation and force the Federal Reserve to keep interest rates elevated, potentially cooling economic growth.
As the legal battle over Trump’s tariffs continues, markets and policymakers alike will be watching closely for the next chapter in the long-running trade conflict.
