On May 28, 2025, the U.S. Court of International Trade ruled that President Donald Trump exceeded his authority by imposing sweeping tariffs under the International Emergency Economic Powers Act (IEEPA). The court’s decision invalidated the “Liberation Day” tariffs, which had imposed broad duties on imports from multiple countries. The ruling emphasized that the Constitution grants Congress, not the president, the exclusive power to regulate international commerce.
Following the court’s decision, financial markets responded positively. U.S. stock futures rose, with the S&P 500 futures up 1%, Dow Jones Industrial Average futures gaining 0.4%, and Nasdaq futures climbing 1.5%. The technology sector, particularly chipmakers like Nvidia, led the rally, buoyed by strong earnings reports.
However, the optimism was tempered when, on May 29, a federal appeals court temporarily stayed the lower court’s ruling, allowing the tariffs to remain in effect pending further review. This development introduced uncertainty into the markets, with gains moderating as investors assessed the implications of the ongoing legal proceedings.
International reactions varied. China welcomed the initial ruling and called for the removal of all unilateral tariffs, while the United Kingdom adopted a cautious approach, awaiting further developments.
Legal experts noted that the court’s decision could reshape the administration’s trade strategy, potentially limiting the use of emergency powers to impose tariffs. The administration has indicated plans to appeal the ruling, and the outcome of this legal battle may have significant implications for U.S. trade policy moving forward.
As the situation evolves, investors and policymakers alike are closely monitoring the legal proceedings and their potential impact on the global economy.
