US court ruling hailed by Democratic states, small businesses as victory over Trump tariffs

The US Court of International Trade struck down President Trump's emergency tariffs, emphasizing constitutional limits on executive power. This landmark decision not only suspends broad tariffs on China, Canada, and Mexico but also sparks optimism in global markets, with Asian indices and Indian stocks rallying and the US dollar strengthening.

Sources:
NDTVTimes of IndiaLivemint+3
Updated 26m ago
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Sources: Times of IndiaMMoneycontrol+1
A U.S. Court of International Trade in Manhattan ruled that President Donald Trump overstepped his legal authority by imposing tariffs under emergency powers, siding with Democratic states and small businesses. The court emphasized that Congress holds exclusive authority over international commerce, which cannot be overridden by the executive branch.

The ruling came from a three-judge panel after lawsuits argued that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs was unlawful. The court stated, "The court does not pass upon the wisdom or likely effectiveness of the Presidents use of tariffs as leverage. That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it."

The lawsuits were brought by the Liberty Justice Center on behalf of five small businesses and by 13 Democratic-led states. Oregon Attorney General Dan Rayfield called the tariffs "unlawful, reckless and economically devastating."

The ruling suspends the majority of Trump’s tariffs, including global flat tariffs, elevated rates on China, and levies related to drug trafficking and immigration on China, Canada, and Mexico.

Market reactions were positive: Asian stock indices rose, with Japan’s Nikkei climbing 1.7%, and the U.S. dollar surged. Analysts view the ruling as a sentiment boost rather than a structural shift in trade policy.

This decision marks a significant legal check on presidential trade powers, reinforcing constitutional limits and potentially reshaping U.S. trade policy moving forward.

Key quotes and stats:
- "Congress retains exclusive authority over international commerce."
- "Trumps tariffs unlawful, reckless and economically devastating." - Oregon Attorney General Dan Rayfield
- Nikkei rose 1.7% to 38,347.05, highest since May 13.
- US dollar surged, yen down 0.7% to 145.86 against the greenback.
Sources: Times of IndiaMMoneycontrol
A U.S. Court of International Trade ruled that President Trump exceeded his legal authority by imposing tariffs under emergency powers, siding with Democratic states and small businesses. The ruling suspends most tariffs, citing Congress’s exclusive trade authority, and sparked positive global market reactions.
Section 1 background
The Headline

US court blocks Trump tariffs; markets rally globally

Trump’s tariffs unlawful, reckless and economically devastating.
Oregon Attorney General Dan Rayfield
1
Key Facts
  • The Manhattan-based US Court of International Trade ruled that President Trump overstepped constitutional authority by imposing tariffs under emergency powers, emphasizing that Congress holds exclusive authority over international trade.Times of IndiaMoneycontrolM3
  • The court blocked the vast majority of Trump’s tariffs, including the global flat tariff, elevated rates on China, and fentanyl-related tariffs on China, Canada, and Mexico.MoneycontrolM2
  • Democratic-led states and small businesses hailed the ruling as a legal and economic victory against unlawful tariffs imposed under emergency powers.Moneycontrol1
  • Global markets reacted positively with Asian stock indices rising, Japan’s Nikkei hitting a more than two-week high, and Indian markets opening higher.Livemint3
  • The US dollar surged sharply following the court decision, pushing the yen down 0.7% to 145.86 against the greenback, while chip-related stocks like Nvidia rallied on strong earnings.Livemint
Key Stats at a Glance
Nikkei share average rise
1.7%
Livemint
Nikkei index level
38,347.05 points
Livemint
Advantest share price rise
3.7%
Livemint
Tokyo Electron share price rise
3.3%
Livemint
Yen decline against US dollar
0.7%
Livemint
Yen exchange rate against US dollar
145.86 points
Livemint
Gift Nifty trading level
24,813 points
Livemint
Premium over Nifty futures previous close
50 points
Livemint
Nvidia Q1 revenue
$44.1 billion
Livemint
Nvidia revenue growth QoQ
12%
Livemint
Nvidia revenue growth YoY
69%
Livemint

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Section 2 background
Background Context

Legal challenges question Trump’s emergency tariff powers

Key Facts
  • Trump administration imposed broad tariffs under the International Emergency Economic Powers Act (IEEPA), citing a national emergency to justify the measures.MoneycontrolNDTV2
  • Multiple lawsuits challenged the tariffs, arguing that Trump exceeded his legal authority and caused economic disruption by using emergency powers to shape US trade policy.Times of India
  • The court clarified that its ruling does not assess the wisdom or effectiveness of the tariffs, but rather the legality under federal law, which does not permit the president to impose tariffs unilaterally under emergency powers.Moneycontrol1
Key Stats at a Glance
Number of lawsuits challenging tariffs
7 lawsuits
Times of India
Years of US trade deficit
49 years
Times of India
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