Washington, D.C., May 29, 2025 — In a landmark decision, the U.S. Court of International Trade has ruled that former President Donald Trump exceeded his constitutional authority by imposing sweeping tariffs on imports from numerous countries. The court determined that the use of the International Emergency Economic Powers Act (IEEPA) to justify these tariffs was unlawful, as it bypassed Congress’s exclusive power to regulate international commerce.
The ruling has been met with a mix of relief and uncertainty across global markets. Financial markets responded positively, with the U.S. dollar and global equities experiencing modest gains. However, the decision has also introduced ambiguity regarding the future of U.S. trade policy, especially as the Trump administration has filed an appeal and is exploring alternative legal avenues to maintain its tariff regime.
The tariffs in question, which have cost companies over $34 billion, were a central component of Trump’s strategy to leverage trade negotiations. Despite the court’s decision, White House officials, including economic adviser Kevin Hassett and trade adviser Peter Navarro, have expressed confidence in finding other legal mechanisms to sustain the tariffs.
Legal experts suggest that the administration might resort to other statutory authorities, such as Section 122 of the Trade Act, which allows for temporary tariffs, or Section 301, which permits tariffs in response to unfair trade practices. These alternatives, however, come with their own legal constraints and potential challenges.
International reactions have been varied. Canadian Prime Minister Mark Carney welcomed the ruling, stating it aligns with Canada’s long-standing position that the U.S. tariffs were both unlawful and unjustified. Meanwhile, other trade partners are cautiously optimistic but remain vigilant as the legal proceedings continue.
The court’s decision also had immediate effects on commodity markets. Gold prices fell to their lowest in over a week, as the ruling diminished the metal’s appeal as a safe-haven asset. The U.S. dollar’s strength, bolstered by the court’s decision, further pressured gold prices.
As the legal battle unfolds, businesses and investors are closely monitoring developments. The outcome of the appeal and the administration’s next steps will significantly influence the trajectory of U.S. trade policy and its implications for the global economy.
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