TLDR
- US Court of International Trade struck down Trump’s global tariffs imposed in April, ruling the President exceeded his authority under economic emergency powers
- Court decision triggered immediate market rally with S&P 500 futures up 100 points and European indices gaining
- Arthur Hayes called the ruling a “buy everything” moment while Bitcoin fell 1% to $110,800 as traders rotated to equities
- Trump administration plans to appeal the decision, with government given 10 days to implement the permanent injunction
- Ruling could force refunds of up to $10 billion in tariffs collected since April, including $3.5 billion to China
A federal court delivered a major blow to President Trump’s trade policy on Wednesday, ruling that his sweeping tariff regime imposed in April exceeded presidential authority. The decision sent shockwaves through financial markets and sparked debate about executive power in trade policy.
The U.S. Court of International Trade struck down the global tariffs, which included a 10% baseline rate on most trading partners and higher rates for specific countries. The three-judge panel ruled that Trump overstepped his authority when he invoked the International Emergency Economic Powers Act to justify the trade measures.
“We instead read IEEPA’s provisions to impose meaningful limits on any such authority it confers,” the court wrote in its decision. The judges declared that any interpretation allowing unlimited tariff authority would be unconstitutional.
The ruling specifically targets Trump’s use of IEEPA, a 1977 law that grants presidents power to regulate international commerce during declared national emergencies. Trump had claimed an economic emergency tied to drug trafficking and foreign coercion to justify tariffs of up to 125% on hundreds of imported goods.
The court rejected the administration’s justification for country-specific tariffs on China, Canada, and Mexico. It found these measures “fail because they do not deal with the threats set forth in those orders.”
Market Response and Bitcoin Impact
Financial markets responded immediately to the news, with equity futures surging across the board. S&P 500 futures jumped 100 points, while Dow futures climbed 520 points or nearly 1.2%. European indices including the EU Stoxx 50, FTSE 100, and DAX Index all posted gains.
Bitcoin experienced a different reaction, falling 1% to $110,800 as traders rotated capital toward equities. The cryptocurrency had reached a new all-time high of $111,814 last week before the court decision.
Kadan Stadelmann from Komodo Platform told media outlets the decision “signaled a return to law and order.” He explained that investors felt more comfortable reallocating capital to equities following the ruling.
Apple stock surged 3.5% in after-market trading, reflecting broader optimism about reduced trade tensions. The rally occurred despite U.S. Treasury yields climbing above 4.50%, showing continued economic pressures in fixed-income markets.
Financial Implications and Next Steps
The court’s decision could have major financial consequences, potentially requiring refunds of all tariffs collected since April 2. Based on 2024 import levels, this could amount to approximately $10 billion in refunds.
China alone could receive around $3.5 billion in refunds, highlighting the scale of the potential financial impact. The European Union, which had been rushing to negotiate a trade agreement to avoid 50% tariffs, now finds itself in a stronger bargaining position.
Former BitMEX CEO Arthur Hayes called the ruling a “buy everything” moment, suggesting major market gains ahead. His optimism reflects broader investor sentiment about reduced trade uncertainty.
Buy everything round dos. pic.twitter.com/VDPxGFYczX
— Arthur Hayes (@CryptoHayes) May 29, 2025
Legal Battle Continues
The Trump administration has already announced plans to appeal the decision to the U.S. Court of Appeals for the Federal Circuit. This ensures the legal battle will continue, maintaining some uncertainty around trade policy.
The court gave the government 10 calendar days to implement the permanent injunction. This tight timeline adds pressure on the administration while appeal proceedings move forward.
Economist Peter Schiff, who had previously called Trump’s tariffs illegal, reiterated his position following the ruling. He emphasized that “the power to tax lies with Congress, not one man, and tariffs must originate in the House.”
The Federal Reserve had previously stated it would take a cautious approach to interest rate decisions while waiting for clarity on trade tariff matters. The court ruling may provide the clarity central bankers were seeking.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
