
tl;dr
A U.S. court ruled that President Trump exceeded his authority under the International Emergency Economic Powers Act by imposing broad tariffs on trading partners, invalidating tariffs on China, Canada, and Mexico. The decision, prompted by lawsuits from small businesses and states, led to a rise in...
A U.S. court has invalidated President Trump’s tariff regime, ruling that it exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA). This decision nullifies tariffs imposed on China, Canada, and Mexico, calming equity markets and prompting a slight correction in Bitcoin’s price.
The ruling follows lawsuits brought by small businesses and a coalition of states, including Oregon and Arizona. The court emphasized that IEEPA’s provisions impose meaningful limits on presidential power, stating that an interpretation granting unlimited tariff authority would be unconstitutional. As a result, 10% baseline tariffs, a 25% levy on Canada and Mexico, and a 20% rate on Chinese imports have been struck down.
Following the ruling, U.S. equity futures rallied significantly, with Dow futures climbing nearly 1.2%, and S&P 500 and Nasdaq futures gaining about 1.7% and 2%, respectively. Bitcoin, however, experienced a slight decline of about 1%, retreating from its recent all-time high of $111,814 to around $110,800.
Kadan Stadelmann, CTO of Komodo Platform, interpreted the decision as a return to “law and order,” making investors more comfortable reallocating capital to equities. He noted that Bitcoin’s dip is likely a short-term correction before the cryptocurrency continues its longer-term bull run.
The court also rejected the administration’s justification for country-specific tariffs, finding that the threats claimed in the orders did not align with those circumstances. Trump had initially imposed tariffs citing an economic emergency related to drug trafficking and foreign coercion under IEEPA.
The government has been ordered to take administrative steps to implement the injunction within 10 calendar days. Meanwhile, Trump’s legal team has filed an appeal with the U.S. Court of Appeals for the Federal Circuit, signaling ongoing legal battles ahead.