Topline
U.S. stock futures surged in early trading on Thursday after a federal trade court struck down President Donald Trump’s sweeping “Liberation Day” tariffs and declared the president exceeded his authority by imposing them.
President Donald Trump during his "Liberation Day" trade announcement event at the White House on ... More
A three-judge panel at the Court of International Trade ruled Trump’s tariffs imposed on April 2 should be “set aside,” siding with business groups and Democratic-led states that asked the court to strike the tariffs down as unlawful.
The judges agreed with plaintiffs’ claims that Trump doesn’t have authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA), which gives presidents the power to impose some sanctions during national emergencies.
IEEPA does not explicitly mention anything about tariffs, which plaintiffs argued means that Trump doesn’t have authority to impose them under the law, and the trade court agreed, writing, “Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.”
The ruling halts Trump’s tariffs on nearly every country - minus the tariffs on Mexico, China and Canada that were imposed prior to April 2 - but the White House is likely to appeal the decision, and either an appeals court or the Supreme Court could quickly put the tariffs back in effect.
U.S. stock futures surged in early trading on Thursday, with the benchmark S&P 500 Futures rising 1.5% to 5,991.50 points, while Dow Futures climbed to 42,630.00 points—up 1.1% since Wednesday’s close. The tech-centric Nasdaq Futures had the biggest bump as it rose 1.9% to 21,785.25 points. Key Asian markets responded positively to the court ruling, with China’s Shanghai Composite Index and Hong Kong’s Hang Seng Index rising 0.7% and 1.35% respectively. Japan’s Nikkei 225 index and South Korea’s KOSPI indext both surged by nearly 1.9%.
Trump’s executive orders covering his “Liberation Day” tariffs “exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the three-judge panel wrote in their ruling.
Trump is all but certain to appeal the court’s ruling to the US Court of Appeals for the Federal Circuit. That court could put the tariffs back into effect, as Bloomberg noted in April that court has historically been deferential to presidents when it comes to tariffs. It’s likely the dispute will ultimately be decided by the Supreme Court, though it’s unclear how and when justices could rule on the issue. Trump could also try to impose his tariffs though other laws, but legal experts told Forbes prior to Wednesday’s ruling that other laws would require Trump to go through a lengthier process to impose any tariffs.