In a landmark decision, the United States Court of International Trade has invalidated the bulk of tariffs imposed by former President Donald Trump, declaring that his administration overstepped legal boundaries. The ruling represents a significant check on presidential authority in the realm of international commerce and has already had an impact on financial markets.

Court Declares Tariffs Unconstitutional

On Wednesday, a three-judge panel from the US Court of International Trade issued a sweeping decision that invalidates most of the tariffs introduced by President Trump since January of his term. These tariffs, applied broadly to numerous trading partners, were initially justified as measures to protect the US economy.

However, the court determined that these measures violated constitutional provisions. Specifically, the Constitution grants Congress—rather than the executive branch—exclusive authority over the regulation of international trade. According to the judges, that authority cannot be overridden by the president, even under the pretense of national emergency or economic safeguarding.

Legal Basis of the Ruling

The panel stated that while the President does have powers to impose tariffs under certain emergency conditions, such authority is not unlimited. The decision reads:

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage… That use is impermissible not because it is unwise or ineffective, but because federal law does not allow it.”

This judgment underscores a vital distinction in US governance: policy decisions must not breach constitutional limits, regardless of their intended benefits or political appeal.

Tariffs Introduced During Trump’s Presidency

During his presidency, Donald Trump frequently used tariffs as a tool to pressure US trading partners, renegotiate trade agreements, and promote domestic industry. Some of the most controversial tariffs included:

  • Duties on steel and aluminum imports.

  • Tariffs on Chinese goods during the US-China trade war.

  • Broad-based tariffs on goods from the European Union and other key allies.

These measures were often justified by invoking Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports that threaten national security. However, critics argued that the scope of the tariffs far exceeded the bounds of this law.

Reaction from the Financial Markets

The court’s decision sparked immediate reactions from the financial sector. Investors, relieved by the prospect of reduced trade tensions and improved international commerce, responded positively. The US dollar gained strength against several major currencies, including the euro, yen, and Swiss franc.

Analysts noted that lifting these tariffs would likely ease inflationary pressures and reduce costs for American manufacturers and consumers alike. Importers, who had long criticized the tariffs for increasing the price of raw materials and goods, welcomed the court’s move as a step toward restoring predictability in global trade.

A Blow to Trump’s Trade Strategy

The ruling presents a substantial challenge to the former president’s trade legacy. Trump’s approach to trade was characterized by unilateral actions, economic nationalism, and the belief that aggressive tariffs could force better terms in international negotiations.

While some sectors—such as domestic steel producers—benefited from the tariffs, others suffered due to retaliatory measures and increased production costs. The broader economic effects of the tariff policy have been hotly debated, with many economists asserting that it hurt more American businesses than it helped.

Implications for Future Presidents

This decision also sets a critical precedent that may limit the ability of future presidents to unilaterally impose broad tariffs without congressional approval. Legal experts suggest that the ruling reaffirms Congress’s primary role in crafting trade policy and could influence how future administrations address trade-related issues.

Moreover, the decision could prompt lawmakers to reconsider and potentially reform legislation such as Section 232, which has been a focal point of executive action in trade matters.