News Today: Federal court halts Trump tariffs citing constitutional limits

In a significant legal rebuke, a US federal court has blocked sweeping tariffs imposed by former President Donald Trump, challenging one of the core tenets of his economic policy. The ruling, delivered by the Court of International Trade in Manhattan, asserts that the US Constitution vests Congress with exclusive authority over international commerce, and this cannot be overridden by presidential action—even under emergency laws.

The case focused on Trump’s use of the International Emergency Economic Powers Act (IEEPA), a 1977 law cited to justify imposing tariffs on countries like China, Mexico, and Canada, under the guise of national emergency. The court ruled that the “Worldwide and Retaliatory Tariff Orders” exceeded any authority granted by IEEPA and did not directly address the threats cited.

The lawsuit was filed by the Liberty Justice Center on behalf of five small businesses that import goods from countries impacted by the tariffs. It represents the first major court victory in a series of seven ongoing legal challenges, including suits from 13 US states and trade groups.

Despite the ruling, the Trump administration swiftly filed an appeal, signaling that the legal battle over trade powers is far from over. White House Deputy Press Secretary Kush Desai defended the administration’s stance, stating:

“President Trump pledged to put America First… the Administration is committed to using every lever of executive power.”

Market Reactions

The ruling sparked immediate shifts in global financial markets:

• Japan’s Nikkei 225 rose by 1.5%

• Australia’s ASX 200 also climbed modestly

• US stock futures jumped, indicating optimism

• The US dollar strengthened against safe-haven currencies like the Japanese yen and Swiss franc

Market analysts noted that clarity on trade policies could support more stable economic planning for global investors and businesses.