US: What the Judicial Block on Trump’s Tariffs Signifies

The decision by the U.S. Court of International Trade has caused turmoil in global markets, ruling that the majority of former President Donald Trump’s global tariffs were illegal. The court issued a unanimous decision (May 28, 2025), siding with states led by Democrats and small businesses that accused Trump of misusing an emergency law to justify most of his tariffs. The court gave the government ten days to comply but did not specify steps to repeal the tariffs, according to Bloomberg. This ruling affects Trump’s global uniform tariffs, increased rates on China, and tariffs related to fentanyl from China, Canada, and Mexico. However, tariffs imposed under different authorities, such as Section 232 and Section 301 measures, including those on steel, aluminum, and automobiles, remain unaffected. The Justice Department has appealed the case to the Federal Circuit Court. Ultimately, the Supreme Court may have the final say in this high-stakes case impacting trillions of dollars in global trade. For now, the decision permanently blocks the tariffs unless the appellate court allows Trump to reinstate them during legal proceedings. Futures contracts for U.S. stock indexes rose due to the decision, with Nasdaq 100 futures increasing up to 2.1%. The dollar strengthened while gold fell. This ruling marks one of the largest judicial defeats for Trump amid a wave of lawsuits challenging executive orders testing presidential power limits. Other cases challenge Trump’s mass federal employee firings, birthright citizenship restrictions, and efforts to cut congress-approved federal spending. Judges rejected the government’s argument that Trump had authority to impose unilateral tariffs based on a law designed for financial transactions during national emergencies. The ruling was a summary judgment, granting a definitive win for plaintiffs without the need for a trial. Trump invoked the International Emergency Economic Powers Act to justify sweeping global tariffs, citing U.S. trade deficits and drug trafficking at borders as national emergencies allowing him to use the law. Judges noted that government lawyers admitted during hearings the intent was to ‘pressure’ other nations into better deals. Global markets have seen significant fluctuations since Trump announced reciprocal fees via an executive order on April 2, 2025. Trillions in market value have been lost and regained amid delays, reversals, and announcements about potential trade deals, especially with China. In response, White House spokesperson Kous Desai stated it is not the role of unelected judges to decide how to properly handle a national emergency. The court’s decision highlights ongoing debates over presidential powers and their economic implications.