US Court Of International Trade Blocks Trump’s Sweeping Tariffs

COURTS
US Court Of International Trade Blocks Trump’s Sweeping Tariffs

A legal bombshell just rattled Trump’s trade agenda.

In a dramatic turn on Wednesday, the U.S. Court of International Trade ruled that President Donald Trump’s sweeping global tariffs were illegal, striking down one of the most aggressive planks of his second-term economic agenda. A three-judge panel concluded that Trump overreached his authority under the 1977 International Emergency Economic Powers Act (IEEPA), a law historically used for financial sanctions — not as a blank check for slapping tariffs on virtually every U.S. trading partner.

Markets cheered the decision, rallying sharply in after-hours trading. Sectors battered by the tariff wars, like manufacturing, retail, and import-heavy industries, surged as investors welcomed the prospect of lighter trade tensions and fewer supply chain shocks. After months of market whiplash driven by tariff threats, delays, and trade negotiation reversals, Wall Street was more than ready for a breather.

White House Digs In

The court’s ruling halts a wide range of Trump’s tariffs, including the so-called “reciprocal tariffs” on dozens of countries and targeted fentanyl-related levies on China, Mexico, and Canada. But not all tariffs are gone — duties imposed under other authorities, like Section 232 on steel and aluminum, remain untouched.

White House spokesman Kush Desai wasted no time hitting back, slamming the ruling as overreach by “unelected judges” and arguing that the U.S.’s large trade deficit constitutes a national emergency. But the judges were clear: the law doesn’t grant “unbounded tariff power,” and the trade deficit doesn’t meet the definition of an “unusual or extraordinary threat” that would trigger the emergency powers Trump invoked.

What’s Next?

While the court’s decision is a clear victory for small businesses, states, and importers who challenged the tariffs, the fight isn’t over. Trump can appeal the ruling, potentially taking it all the way to the U.S. Supreme Court — setting up a high-stakes showdown over the limits of presidential trade authority.

Beyond the legal drama, the ruling also casts uncertainty over Trump’s ongoing trade negotiations with key partners like China and the U.K., many of which were launched in the shadow of the now-suspended tariffs. And although some Republicans in Congress have been pushing legislation to expand presidential tariff powers, this legal defeat may cool the momentum for those efforts.

For now, though, Wall Street is taking the win. After months of tariff-fueled volatility, investors are eager to enjoy the market rally — at least until the next headline drops.

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