U.S. Trade Court Strikes Down Trump-Era Tariffs

U.S President Donald Trump’s expansive “Liberation Day” tariffs have been declared unconstitutional by a U.S. federal trade court, which found that he had overreached himself in accordance with the 1977 International Emergency Economic Powers Act (IEEPA).

The U.S. Court of International Trade’s three-judge panel’s ruling, which was rendered on May 28, 2025, permanently prevents Trump’s tariffs on imports from nations including China, Canada, and Mexico from being enforced.

The court determined that Congress normally has the right to set tariffs on imports from almost every nation; the IEEPA does not give the president this power.

As the identified dangers, like trade deficits and drug trafficking, did not qualify as “unusual and extraordinary risks” as required under the IEEPA, the ruling stressed that the president’s use of emergency powers to support the tariffs was an overreach.

Financial markets have responded favorably to this court setback for Trump’s trade strategy. Futures for U.S. stocks increased, with the tech-heavy Nasdaq rising about 2%. International markets, particularly Asian indices, also saw increases.

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On the other hand, because the decision made gold less appealing as a safe-haven asset and strengthened the dollar, gold prices dropped to their lowest levels in more than a week.

Meanwhile, The White House has stated that it intends to challenge the verdict, calling it the product of “unelected judges.” Although this decision restricts the president’s authority to apply sweeping duties under the IEEPA, analysts point out that there may still be other legal options, such as Section 301 of the Trade Act of 1974.

The case, V.O.S. Selections, Inc. v. United States, marks a significant judicial check on presidential power in the realm of international trade, reinforcing the constitutional limits on executive action in trade policy.