In a landmark ruling, the U.S. Court of International Trade has struck down most of President Donald Trump's blanket tariffs, declaring them unconstitutional. The court stated that the U.S. Constitution grants Congress, not the president, the authority to regulate international commerce, rejecting Trump's use of the International Emergency Economic Powers Act (IEEPA) to justify sweeping import duties.
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The permanent injunction applies to all tariffs imposed under IEEPA since January, though industry-specific levies on steel, aluminium, and automobiles remain unaffected, as they were issued under different statutes. The court ordered the Trump administration to revise the tariff orders within 10 days, prompting an immediate appeal.
Markets responded positively. The U.S. dollar strengthened sharply, and global stocks rallied following the announcement. However, the administration maintains that trade deficits are a national emergency and criticised the court's intervention, stating it is 'not for unelected judges to decide how to properly address a national emergency"'
Legal analysts say the ruling undermines Trump's tariff-centred trade strategy, which has disrupted global supply chains and burdened businesses. The decision stems from lawsuits filed by 12 U.S. states and small businesses, arguing the tariffs were economically harmful and unlawfully enacted. The court agreed, noting, 'if the challenged Tariff Orders are unlawful as to Plaintiffs they are unlawful as to all'.
Despite this setback, Goldman Sachs analysts noted that Trump retains legal pathways for imposing sector-specific and country-targeted tariffs. Nevertheless, the decision introduces significant uncertainty into ongoing trade negotiations with China, the European Union, and other partners.
Asian officials responded cautiously. South Korea estimated its effective tariff rate would fall under the ruling, while Hong Kong's financial secretary remarked that it might 'bring President Trump to reason'.
The ruling may ultimately reach the Supreme Court. If upheld, it would mark a major constitutional limit on presidential trade powers and force a reevaluation of executive authority in economic policymaking.
Source: www.reuters.com